May 2008

In this issue

Housing Plan Should Build Local CDCs

HOT STUFF: Trib Covers Vacant Properties Ordinance

Over 200,000 Section 8 Applications Received

Federal Preservation Policy

Housing Policy Platform and Production Report Available

Rental Markets, Foreclosures and the Credit Crunch

ACORN Housing receives major grant

Foreclosures in Chicago

Property Tax Savings and HAP Contracts

Hellos and Goodbyes!

List of City Owned Property


Housing Plan Should Build Local CDCs

By Kevin Jackson

At the final public hearing on the City's 5-year Housing Plan, CRN talked about how community development corporations can expand their partnership with the City to reach its housing goals. Community development corporations are institutions that work to improve the quality of life for people within a place-based framework. CDCs have in common a mission to improve a distinct place using a variety of tools and methods. Some CDCs work in a defined geography - some work for a defined constituency. All have fundamental characteristics that add value to community development.

Our nonprofit status allows us to maintain accountability to community. Our missions extend beyond the legal requirement to a fundamental respect for the inclusion residents and the development of civic engagement and leadership. Our nonprofit status also guides how we use financing and other monies and makes us stewards of the highest regards of public and private dollars. Our methods of community development vary and are dynamic over time based on the needs of the community we serve. These methods range from housing development, to commercial and job development, to social services, leadership development, and organizing.

Because our investment extends beyond dollars - to relationships with residents, elected officials, faith based leaders, and others - we are in it for the long haul. Our field has waxed and waned over 40 years, but in the main, our field is strong and the values that drive it are lasting. As institutions, our resilience and tenacity has lasted through previous recessions and we will last through this one as well.

This added value comes directly from our approach to development - one that is community-directed, based in real needs with a clear vantage point of existing assets, centered on diversity, with a strong respect for the market and how it functions. This all translates into high standards of accountability in our programs, real estate development, and property management functions.

There is excess capacity among CDCs - we could rehab, develop, and manage more housing for Chicagoans if more financing and subsidy were to be made available. We already know the challenges to working in difficult markets - that is our history. We know of substandard and at-risk housing - improving and securing it is our history. We know how to gather community support and overcome opposition -that is our history. And most importantly, we know how to create sustainable affordable housing that can generate broad economic benefits - if the resources are available to do so.

In the next five years, we ask that the City prioritize its limited resources to nonprofit community development corporations. Regarding the foreclosure crisis, the time is right to work with us to create a plan for reuse of the homes as affordable housing. The current strategy is on increased foreclosure counseling - at best this is assisting 4 out of 10 delinquent homeowners. We believe that an opportunity exists for the city to enable a process to acquire foreclosed homes, transfer them to nonprofit CDCs in bulk, and provide the working capital and subsidy needed to remove the harm from the neighborhood that results from abandoned homes. CDCs are best suited to determine if a home should be rental, lease to purchase, or sold as a for sale unit. We have managed scattered site units and doing so more efficiently is possible and necessary to address this crisis. An investment of this sort will create tax revenue, create jobs, and strengthen local institutions which already have deep roots in our communities.

Prioritizing nonprofit CDCs for community development would be a safe, accountable, and efficient use of public resources and a long term investment in these institutions which serve Chicago neighborhoods, and generate a healthy, sustainable return for Chicago's residents.

For 25 years, the Chicago Rehab Network (CRN) has worked to further the development and preservation of safe affordable housing in Chicago, and throughout the state of Illinois.

  • HOT STUFF: Trib Covers Vacant Properties Ordinance
  • Chicago Tribune logo

    Daley administration proposal would raise fees for vacant properties: Higher costs would stifle renovation, group says

    Tribune staff report

    The Daley administration wants to tighten standards for the city's growing legion of vacant homes, but a Chicago affordable-housing preservation leader said the plan would make rehabilitation "difficult and unlikely."

    City Hall wants to increase the registration fee on Chicago's 5,000 to 8,000 vacant properties from $100 a year to $250 every six months. After a property is vacant for more than six months, an owner would have to replace plywood covering windows and doors with rust-free steel panels or provide an alarm system, said Richard Monocchio, acting Department of Buildings commissioner.

    The ordinance "increases the costs for all parties, creates a disincentive for reusing the properties and puts them at risk of ultimate demolition," Kevin Jackson, executive director of the Chicago Rehab Network, told the City Council Committee on Buildings.

    Ald. Bernard Stone (50th) said the changes "will put more property back on the [tax] rolls." © 2008, Chicago Tribune May 1, 2008

    Click here to get our complete testimony.
  • Over 200,000 Section 8 Applications Received
  • Hearings table

    The deadline for a chance to get into CHA's housing lottery for a chance at one of 40,000 Section 8 vouchers is May 15. Some 250,000 applications were distributed the first day alone . For more information or to register visit www.rentbetter.org.

  • Federal Preservation Policy
  • Us Capitol

    Harvard confirms: We cannot afford to neglect rental At the release of the latest study by the Harvard Joint Center for Housing Studies, Bill Apgar of Harvard and Bruce Katz of the Brookings Institute affirmed the need for a more balanced housing policy that does not, as it has in recent years, neglect pressing rental housing needs in favor of homeownership. Belief in homeownership as a cure all persists despite overwhelming evidence to the contrary and even in the face of an urgent rental crisis. The now-national mortgage crisis has affected the rental market on several levels. Not only has an influx of former homeowners into the rental market put upward pressure on prices, but studies show that nearly one in every five foreclosures involves an absentee owner of 1-2 unit apartments and puts renters at risk of losing the roof over their homes.

    The U.S. House of Representatives yesterday passed the most comprehensive response yet to the American mortgage crisis. The American Housing Rescue and Foreclosure Prevention Act (H.R. 3221) responds directly to the current crisis facing middle class Americans while providing the tools to prevent a repeat of these problems. The legislation combines a number of bipartisan bills including measures to modernize the FHA and reform the GSEs, which will provide crucial liquidity to our mortgage markets now, and also strengthen regulation and oversight for the future. In addition, the housing package will help families facing foreclosure keep their homes, help other families avoid foreclosures in the future, and help the recovery of communities harmed by empty homes caught in the foreclosure process. Meanwhile, the affordable housing sector has the opportunity to voice the importance of addressing the rental crisis. Efforts to encourage home purchases and cushion losses for businesses without addressing the urgent need for affordable housing could prove to be shortsighted and ineffective. The Center on Budget and Policy Priorities argues, for instance, that much of what the Senate has proposed in its recently passed Housing Stimulus Bill, namely tax credits aimed at stimulating the homebuyer market, "would do little or nothing to address the foreclosure crisis."

    Here are some other significant developments:

    • Reform of the GSEs Fannie Mae and Freddie Mac. Proposed bills would restructure the GSEs and have funds from GSEs put into a National Low Income Housing Trust Fund. The fund would serve as a source of revenue for the production, rehabilitation, and preservation of low-income, primarily rental housing.
    • Reform of the LIHTC, as drawn out in the Tax Assistance Act, a bill sponsored by Chairman of Ways and Means Charlie Rangel (D-NY). In addition to simplifying the LIHTC program, this bill would temporarily increase the per capita allocation by 20 cents, up from $2.00.

    Rep. Maxine Waters' (D-CA) Neighborhood Revitalization Act is one of the few proposals that would specifically target resources to the most vulnerable people and places. This bill was originally a part of Rep. Barney Frank's FHA bill. When opponents voiced concern that the measure would be little less than a "taxpayer bailout," it was reintroduced as a stand-alone bill, HR 5818, by Rep. Waters. With this bill, up to $15 billion loans and grants would be distributed in proportion to local concentrations of foreclosed properties. The funds would go towards the purchase, rehabilitation, and resale or operation of homeownership and rental housing. At least 50% of the grant money must be targeted to house families at or below 50% of Area Median Income.

    Rep. Frank (D-MA) has been preparing a revenue neutral Housing Preservation Omnibus bill which will include several proposals from the Preservation Working Group, of which CRN is a member. Among the provisions are measures aimed at maintaining housing at risk of conversion to market rates, restoring housing at risk of loss due to deterioration, protecting and empowering residents facing conversion and providing better data to facilitate preservation transactions.

  • Housing Policy Platform and Production Report Available
  • As the city of Chicago plots its future housing course through the 5-Year Housing Plan, the Chicago Rehab Network has called on elected officials to commit to measures that will preserve neighborhoods, expand interaction and public leadership and commit badly needed resources to help buttress residents hit by the current economic downturn. CRN has participated in public meetings and served on the city advisory commitee. Check out our housing platform.

    We also released our 2008 "Housing Fact Sheet" alongside a report on the production of affordable housing in the city from 2004-2008. Both documents are available at www.chicagorehab.org .

  • Rental Markets, Foreclosures and the Credit Crunch
  • Preservation Compact logo

    ULI Chicago recently hosted forum that featured the Harvard University Joint Center for Housing Studies report on "America's Rental Housing: The Key To a Balanced National Policy," which was unveiled with support from The John D. and Catherine T. MacArthur Foundation. Over 400 people came to Chase Bank Auditorium for this April 30 session that also served to showcase the work of The Preservation Compact. The Compact seeks to preserve 75,000 units of existing affordable rental housing that would otherwise be lost by the year 2020.

    Click here to get info about the report and the forum.
  • ACORN Housing receives major grant
  • ACORN Housing logo

    ACORN Housing was recently awarded a $7.8 million national grant. The funding will allow for dramatic expansion of forecloosure prevention counseling work across the country, the group said. because of the funding, between April and December 2007, ACORN Housing said it was able to help nearly 25,000 families in danger of foreclosure stay in their homes. Homeowners who are in danger of foreclosure can call the ACORN Housing hotline at 1- 888-409-3557 or visit www.acornhousing.org. The grant to support the foreclosure counseling intervention efforts was provided by funds from the National Foreclosure Mitigation Counseling Program. Approved by Congress in the FY08 Consolidated Appropriations Bill, the National Foreclosure Mitigation Counseling Program is administered through a competitive application process by NeighborWorks® America, within guidelines defined by congressional legislation.

  • Foreclosures in Chicago
  • Visit www.chicagorehab.org and click the policy link to see our new foreclosure page. We are reviewing innovative best practices nationally and will have a synopsis available soon.

  • Property Tax Savings and HAP Contracts
  • Recent amendments to Cook County's Class S program can benefit nonprofit owned affordable housing. If you own a building with a HAP contract, you can qualify for Class S when you renew your contract. Prior to the amendment, only for profit owners going through a Mark to Market renewal were eliglble for Class S. For more information, click here.


  • Hellos and Goodbyes!
  • The Chicago Rehab Network congratulates Sharon Legenza in her new job as executive director of Housing Action Illinois. We also bid a fond farewell to Marty Wiles, who is leaving city service.

  • List of City Owned Property
  • Central Region City Owned Land North Region City Owned Land South Region City Owned Land West Region City Owned Land

    Rachel Johnston rachel@chicagorehab.org
    Chicago Rehab Network http://www.chicagorehab.org

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