Mayor Richard Daley’s administration would make more than $75 million available to help working middle-class residents buy homes in Chicago, including mortgage and down payment assistance, under a proposal to be introduced Wednesday to the City Council.
City Hall sources said Tuesday the action signals a shift from the city’s housing policies of the 1980s, which were aimed almost exclusively at assisting low-income families. They said the proposal Daley plans to announce targets families earning between $25,000 and nearly $72,000.
The price of condominiums can range up to $75,000 under a new feature, and single-family homes can range as high as $141,000 and $191,000 in specially targeted and impoverished areas on the South and West Sides, where the city will try to attract middle-class homeowners.
Administration officials and aldermen stressed Tuesday that the proposed policy is not designed to gentrify neighborhoods. Most of the two- and three-income families who would qualify for the programs will earn between $25,000 and $50,000. The homes also would generally cost in the $100,000 range.
“There are a lot of things, some of them controverisal, that are going on regarding housing,” said Ald. Ambrosio Medrano (25th), chairman of the council’s Housing Committee. He and Ald. Arenda Troutman (20th) are scheduled to formally introduce Daley’s measure.
“This program the mayor will announce is going to help neighborhoods,” Medrano said, “because if a neighborhood is going to survive, it has to have mixed incomes. You don’t want just rich or poor. You want working people to have a chance at a new home. In my ward, in Pilsen, working families who stayed during the tough times should be given the chance to buy a home now that things have improved. What’s wrong with that?”
The new policy comes as the council considers other controversial housing measures. Aldermen are expected to consider a proposed ordinance to limit the size of “for sale” signs in an attempt to curb rapid property change in some neighborhoods.
Northwest Side aldermen also are being told by the administration that City Hall will no longer resist federal court decrees calling for scattered-site public housing in their Bungalow Belt.
The Daley housing plan has features that would be financed by the sale of bonds and the use of existing federal housing dollars. They include:
– Down payment assistance. The city would commit up to $50 million to help working families pay part of their down payments and closing costs. Typically, officials said, families could receive $5,000 for their down payments.
– Foreclosure protection. Using a $900,000 federal grant, homeowners in the Roseland, West Englewood, Chicago Lawn and Gage Park neighborhoods would be given low-interest bridge loans should they fall behind in their mortgage payments.
– Condominiums. The New Homes for Chicago program, created to assist in the purchase of single-family homes, would be expanded to include condominiums with a purchase price of up to $75,000. Developers could receive subsidies of up to $15,000 per unit to construct the condominiums.
– Lots for Less. A program would be created under which the city would discount up to $20,000 on the cost of a vacant city lot for the construction of single-family homes or multi-unit developments.
Throughout briefings Tuesday involving aldermen, housing developers and advocates, city officials emphasized the limits of the proposal. These include provisos mandating that a home buyer’s income not exceed 115 percent of the area median income, that the home buyer must reside in the home, and that participants must be first-time home buyers or not have owned a home in the last three years.
In addition, 20 percent of the funds would be reserved for home purchases in targeted low-income areas, although none of the purchasers in those areas would be required to be first-time buyers.
The income cap for a two-income family would be $51,300 a year in non-targeted areas and $61,560 in targeted areas. A three-income family could earn up to $58,995 to buy a home in a non-targeted area and $71,820 in certain low-income neighborhoods.
“What the mayor is going to be doing on Wednesday is to articulate a mixed-income philosophy,” said Housing Commissioner Marina Carrott. “The best way to serve the city is to address housing needs across a wide range of incomes. He’s giving us the tools with this ordinance to implement that strategy.”
