When Elaine Townsend was looking for an apartment last year, she saw an old building being rehabbed near where she lived in Chicago’s West Humboldt Park neighborhood. She thought the building seemed like it would be a nice place, much better than the apartment she was renting for herself and her 16-year-old daughter.
But Townsend didn’t realize the building was going to be condominiums for sale, not apartments for rent.
When she obtained some information on the building, she found the property was being rehabbed by Uptown Habitat for Humanity, a non-profit organization that, in the last four years, has developed 82 housing units for low- and moderate-income home buyers. The Uptown group is part of the Habitat for Humanity international organization, which has gained widespread recognition, its most well-known volunteer being former President Jimmy Carter.
“I just wanted a better place to live,” said Townsend, explaining that it never occurred to her that she might be able to afford her own condo. But, despite a modest income, Townsend has been able to afford it. She’s lucky and she knows it.
Experts say there are few home-owning opportunities for people with low to moderate incomes. And even though there have been plenty of new homes built since 1995 in the city, not many are in the so-called affordable category.
Added to that, housing experts say, is an even bigger need for affordable rental housing. Thousands of rental housing units have been lost and not replaced, they say, with many rental buildings having been converted into condos, leaving those with low to moderate incomes with few housing options.
But the story of Elaine Townsend isn’t just about luck. It also shows the kind of creativity needed to pull together an affordable housing project, for sale or for rent. And it demonstrates the persistence required by people looking for a new home.
Chicago Rehab Network, a local housing coalition comprising 43 community development organizations, has been instrumental in pulling together resources and bridging the yawning gap between the promise of affordable housing and the reality–often in a behind-the-scenes way. John Mitchell, executive director of Uptown Habitat for Humanity credits some of his group’s success to the rehab network. The network, he says, can focus on things his group doesn’t have time for.
For instance, the Chicago Rehab Network provides technical assistance to neighborhood developers. This means it helps with everything from financing to hiring contractors. The network also lobbies for public policy changes that support affordable housing.
Currently, it is pushing for property tax relief for low- to moderate-income homeowners. The fear is that low-income homeowners could lose their property to high tax bills, especially in up-and-coming neighborhoods.
Above all, the 20-year-old rehab network’s mission is to create and preserve affordable housing.
“It’s not easy,” said the group’s executive director, Kevin Jackson.
For starters, nobody knows the true size of the affordable housing shortage. According to the American Housing Survey by the Center for Budget and Policy Priorities, the Chicago area in 1995 had a gap between supply and need of 130,000 affordable housing units. This was an 11 percent increase from 1990.
Based on current U.S. Census data, urban planners use the rule of thumb that there are two families who need affordable housing for every affordable unit. But even planners admit they don’t know the full scale of the problem.
In order to understand the affordable housing market, Chicago-based Metropolitan Planning Council is conducting a rental housing survey. Funded by a number of government agencies, including the Chicago Department of Housing, the survey will estimate the supply of affordable rental units in the six-county metro area.
The survey, scheduled to be complete in July, will also chart vacancies and building conditions in order to gauge the affordable-housing environment.
“The whole construction of housing has been down, except at the high end,” said Pat Wright, an urban planner and associate director of the Voorhees Neighborhood Center at the University of Illinois at Chicago. “We are all sort of guessing. So this survey will help us know what to do.”
Recently, the City of Chicago adopted a new five-year affordable housing plan. Developed with the help of groups like the Chicago Rehab Network, the plan takes a strategic approach to the problem of affordable housing.
“This plan attempts to get away from a singular focus on units and dollars, and to focus on outcomes,” said Julia M. Stasch, commissioner of the Chicago Department of Housing.
Stasch said the plan sets priorities for types of affordable housing, such as rental units for large families. It also includes an education campaign for tenants and landlords on their rights and responsibilities.
The Department of Housing expects to spend almost $1.3 billion over the next five years to achieve its goals. These funds come from a variety of sources including federal block grants and tax-exempt bonds.
While local governments scramble for money to create affordable housing, there also is a push to privatize part of the market. In other words, needy people, some displaced by the demolition of public housing units, now must seek private apartments or houses. Government assistance sometimes comes in the form of a housing voucher that helps pay part of the rent.
Urban planner Wright believes, however, that something is missing. She thinks community development corporations, such as members of the Chicago Rehab Network, shouldn’t be ignored when it comes to increasing the amount of nice, affordable housing.
“The community development corporations need the spotlight put on them again as successful models for really providing families with housing and social services,” she said.
Lawndale Christian Development Corp. of Chicago provides a good example. The community developer buys abandoned and dilapidated buildings in the North Lawndale area. The buildings are rehabbed and then sold to people in the neighborhood.
So far, the group has rehabbed 35 single-family homes and 100 units of rental housing. Some of the single-family homes have sold for as little as $105,000.
The Chicago Rehab Network helped train the staff at Lawndale Christian Development Corp.
“Most of the people I brought on staff had no experience in housing but they were attracted to our mission,” said Richard Townsell, executive director of the corporation. “The Rehab Network helped our staff get the skills they needed to put together applications for financing.”
Chicago Rehab Network members say their mission extends well beyond “bricks and mortar.”
Bickerdike Redevelopment Corp., for example, has developed nearly 800 units of housing in Chicago’s West Town and Humboldt Park neighborhoods. About 130 of those units are single-family homes or owner-occupied flats. The remainder is rental housing owned and managed by Bickerdike.
Raul Morales said he was fortunate to get one of the Bickerdike apartments. For three years he has lived with his wife and mother-in-law in a first-floor, two-bedroom apartment. He says his family needed a ground-level apartment because his mother-in-law can’t go up stairs. His monthly rent is $419.
“It’s a beautiful building,” said Morales, who works for a company that prepares airline food.
Joy Aruguete, executive director of Bickerdike and board president of the Chicago Rehab Network, says community development corporations understand the needs and wishes of residents.
For instance, Bickerdike planned to redevelop a group of buildings near Logan Square. At a community meeting, residents objected. They wanted more distressed properties rehabbed first. As a result, Bickerdike heeded the neighborhood’s wishes.
For community developers, the tough part is building nice places that at least break even. To help, the Chicago Rehab Network manages a revolving loan pool to provide a source of low-interest money to network members. Local banks have loan officers on the network’s loan committee. And the network relies on banks to give assistance, financial and advisory, to network members.
For example, ABN/AMRO LaSalle Banks provides operating funds to the network.
The involvement of local banks has led to creation of programs that, in some cases, have helped lower down payments and closing costs, the big hurdles for homeownership.
For example, First National Bank of Chicago has a pilot program to help lend money to moderate-income people who want to buy small multi-family buildings. The bank has agreed to stretch underwriting standards as long as the owner of the property lives in the building.
Ed Jacob, bank vice president, says the program, which may become permanent, resulted from conversations with members of the Chicago Rehab Network.
Despite strides being made, affordable housing experts say demand still far outstrips supply. And constructing an affordable building hasn’t gotten any easier.
“The process takes so long,” said Aruguete of Bickerdike Development. “Putting together five layers of financing is a challenge. It could take 18 months from the time of the first meeting with the community to the start of construction. It’s very hard to bring the community through that. They get excited right away and want it done now.”
“We want successful homeowners,” said Mitchell of Uptown Habitat for Humanity, which built Townsend’s condo. “We focus on educating the homeowner about taxes, property maintenance and personal finance. Our goal is to create homeowners, not to foreclose.”
For Townsend, her role as a homeowner is a hands-on experience. The actual construction work at Habitat communities is done, in large part, by the home buyers themselves and volunteers.
The use of volunteers helps keep down the price of the homes–which abled Townsend to buy a condo in the building.
As part of the deal, she figures she will have contributed about 300 hours of her time to help finish the building. She also will give 100 hours of community service to help others like her in the neighborhood.
Townsend’s monthly mortgage payment will be $466. Her down payment, just $750.
“I go to the building every week. I paint, hammer and cut wood,” said Townsend, who hopes to move into the building this spring.
