ALDERMEN CHIP AWAY AT AFFORDABLE HOUSING SHORTAGE
Chicago aldermen on Tuesday took a small-but-symbolic step to chip away at a 116,000-unit shortage of affordable housing units driving the city’s precipitous population decline.
One month after a buzz saw of aldermanic opposition stalled the proposal, the City Council’s Housing Committee easily approved Mayor Lori Lightfoot’s plan to renew 30-year affordable covenants every time a home administered by the Chicago Community Land Trust changes hands.
The trust was created by Mayor Richard M. Daley in 2005 to confront an affordable housing crisis that has gotten infinitely worse since then.
According to its website, the non-profit trust’s overriding goal is to “preserve the long-term affordability of homes created through city programs” and thereby “maintain a permanent pool of homeownership opportunities for working families.”
At the time, the “deed restriction” for maintaining affordability was set at four years. That was subsequently revised to a 30-year covenant that would “renew with each sale.”
“Unfortunately, the renewal upon resale was mistakenly not included in the deed restriction when the document was created. The board recently agreed to reestablish the 30-year renewable term and formally voted to initiate the process to make that happen,” Jennie Fronczak, the trust’s executive director, said Tuesday.
“This was motivated by, and consistent with, the founding idea that, when city resources or initiatives are deployed to create a new affordable home, it should add to the city’s inventory of affordable homes for the long term and help low- and moderate-income Chicagoans stay in the communities they call home.”
Citing recent studies and the latest data from the U.S. Census Bureau, Fronczak said Chicago has 330,000 low-income households — but only 217,000 affordable housing units.
“There is no silver bullet” to solve that gap, Fronczak said. “Many public and private tools are needed, including the array of programs and initiatives we depend on today,” she added.
“The Chicago Community Land Trust, the Affordable Requirements Ordinance and this renewable term ordinance are important parts of that tool kit.”
Humboldt Park Ald. Roberto Maldonado (26th) noted “nobody is being forced” to buy homes through the Community Land Trust and that those who choose to participate have a “significant advantage” — a 50% property tax break.
“I just can’t imagine the relief that it would be for thousands upon thousands of my residents,” he said.
“Should they choose to … join the Community Land Trust program, they will be able to stay there for as long as they want and they could possibly pass on that property to their kids,” Maldonado added.
“There would be a new generation staying in this community they worked so hard to build and make it so attractive. So attractive that, if you don’t have the means and the resources, you’re being displaced and pushed out of here. That is the criminal consequence of gentrification.”
He added, “This is one little step. One little tool that could help us prevent so many existing homeowners and future homeowners from being displaced and gentrified from communities like mine.”
Ald. Daniel La Spata (1st) acknowledged that 30 years “can feel like forever when you’re young. … It feels like this housing is gonna be affordable forever.”
But then he thinks about “retiring from whatever I’m doing 30 years ago and watching the switch on affordability be turned off for countless units” across the city and across his own ward.
“I picture housing affordability being turned off on Fullerton, on Western, on North Avenue. The opportunity to change that — to create longer-term generational affordability in my community — that’s a legacy that I am proud to leave behind and a legacy to start in this moment,” La Spata said.
“We’re not in this moment filling a 116,000-unit gap. That’s gonna take a lot of tools, many of which I know this committee is committed to working on and I’m excited about that. But this is one tool in an expanding toolbox.”
Lightfoot campaigned on a promise to impose a graduated real estate transfer tax to “create a dedicated revenue stream” to reduce homelessness by 45% and begin to chip away at Chicago’s affordable housing shortage.
But the $838 million shortfall she claims to have inherited altered her game plan. The mayor initially proposed raising the transfer tax on homes sold for over $500,000, instead of $1 million, but using some of the windfall to reduce the shortfall.
The revised proposal went nowhere in Springfield. After the coronavirus pandemic hit and had a chilling effect on downtown development, top mayoral aides acknowledged it was not the time for any increase in the transfer tax.