Chicago's housing jam

July 26, 2019

BY ALBY GALLUN

The greystone in West Woodlawn was in bad shape when Kendrick Durer got his first look at it in 2016.

With its boarded-up windows and copper piping ripped out by scavengers, the property on South St. Lawrence Avenue needed a major rehab. Some of the distressed buildings nearby didn't look much better, remnants of a housing crisis that swept the South Side nearly a decade earlier.

But Durer saw an opportunity to buy an inexpensive two-flat in a neighborhood poised to rebound—and to move back into the city from suburban Villa Park. So he took a chance, buying it through Renew Woodlawn, a homeownership initiative that provides subsidies and low-cost financing for property acquisitions in the neighborhood.

"I'm glad I made this move because I've seen nothing but good things in this area," he says.

John R. Boehm

Kendrick Durer saw an investment opportunity and moved back to the city from suburban Villa Park.

Durer's story is encouraging for Chicago, but it underscores one of the many challenges facing new Mayor Lori Lightfoot and the need for creative solutions as she tries to craft an affordable housing policy that works in poor communities like West Woodlawn as well as gentrifying neighborhoods like Logan Square.

The two scenarios represent two extremes of Chicago's many-faceted housing problem: West Woodlawn's housing stock suffers from too little investment, with many decaying buildings in danger of being lost absent the intervention of programs like Renew Woodlawn. Places like Logan Square, meanwhile, suffer from too much investment, with landlords fixing up properties, jacking up rents and pushing out working-class tenants.

Both trends have contributed to a major affordable housing gap, squeezing many low- to middle-income families still struggling despite a booming economy. The deterioration of the housing stock is both symptom and cause of a broader problem afflicting the city: population loss, especially among African American residents on the South and West sides.

Is it a "crisis"? Not when you compare Chicago to places like the San Francisco Bay Area, where Google has pledged to spend $1 billion to ease a severe housing crunch. But it's crisis enough for families being forced out of their longtime homes in hot neighborhoods because they can no longer afford the rent, or for families trying to maintain viable and safe streets in the city's poorer neighborhoods, or for planners and employers worried about the longer-term effects on maintaining a stable workforce.

Over the border, some of Chicago's suburbs face their own housing pressures as homeowners suffer the double-whammy of collapsed property values and rocketing property taxes.

Lightfoot moved into City Hall with an ambitious housing agenda, including proposals to increase funding to combat homelessness, change the city's zoning and permitting processes and promote homeownership. It is seen as a pivot, at least in emphasis, from the Rahm Emanuel years, when the priority clearly was putting a shine on downtown.

Signaling her desire to address racial inequities through housing policy, Lightfoot hired Marisa Novara of the Metropolitan Planning Council—where she spearheaded a major report, "The Cost of Segregation"—to run Chicago's recently reborn Department of Housing. In his final months as mayor, Emanuel resurrected the department, which was eliminated in a 2008 cost-cutting by then-Mayor Richard M. Daley.

"The opportunity really is that we haven't had a housing commissioner for 10 years," Novara says. "So there's, I would say, probably some deferred maintenance on how we adjust and prioritize the issues of affordable housing."

John R. Boehm

Preserving the city's current housing stock is one way to maintain affordable units. Homes on South St. Lawrence Avenue show the deterioration and disinvestment that contributes to housing loss on the South Side.

Lightfoot's election lifted the hopes of many in the affordable housing world, encouraged by campaign rhetoric that conveyed a sense of urgency.

Affordable housing also played a big role in the bitter debate this year over proposed subsidies for the massive Lincoln Yards development on the Near North Side, which will include 600 affordable units—a victory for housing advocates. And a more liberal political climate in the City Council—highlighted by a vocal socialist caucus that has made housing a priority—could provide new solutions and more money to address the problem.

On the national level, President Donald Trump and some Democrats vying to challenge him in 2020 also have highlighted the issue. In June, the president formed a commission to recommend ways to cut regulations that make it harder to build housing, an idea that some housing advocates support. Democratic presidential candidates have endorsed tax credits and other incentives.

"This issue has come to the fore in a way that it hasn't in the past," says Stacie Young, director of the Preservation Compact, a Chicago nonprofit dedicated to affordable housing.

By the numbers? Demand for affordable housing in Cook County exceeded supply by 180,385 units in 2017, slightly higher than its average over the prior five years, according to the Institute for Housing Studies at DePaul University.

Yet the housing issue is about much more than supply and demand. It’s a big part of Chicago’s baggage, reflecting and reinforcing the city’s broader racial and socioeconomic divisions—which were exacerbated over the decades by government-endorsed “redlining” and notorious public housing projects like Cabrini-Green, disparaged as “warehouses of the poor.” It’s a key lever of social policy: Just as the housing issue was used to segregate the city decades ago, many politicians and nonprofit leaders believe it should be used to promote socioeconomic diversity today—to prevent wealthy white neighborhoods from becoming even whiter.

Lightfoot, for instance, has said she wants to tighten the city’s Affordable Requirements Ordinance, or ARO, so that more developers include affordable units in high-end residential projects. She also quickly took steps to rein in “aldermanic privilege,” which she and other critics blame for allowing some City Council members to keep affordable housing, and therefore certain types of people, out of their wards.

"We have a chance to address some of the wrongs of our past and build diverse, inclusive communities," says Kristin Faust, president of Neighborhood Housing Services, a Chicago nonprofit and partner in Renew Woodlawn.

Housing also can play a big role in rebuilding entire communities, like West Woodlawn, attracting people and eventually the businesses that drive a neighborhood's comeback.

"Investing in housing can be the lead investment to incite and encourage related investments," says Kevin Jackson, executive director of the Chicago Rehab Network, a nonprofit. It "provides a stability that can be built off of."

The government, assisted by an army of nonprofits, already has myriad tools to boost affordability, whether it's through the ARO, low-income housing tax credits, housing vouchers or low-cost financing for homeowners. Simply putting more money into existing solutions could go a long way toward narrowing the affordability gap, some advocates say. They welcomed a recently approved state capital bill, which included $200 million to fund affordable housing through the Illinois Housing Development Authority.

But new ideas also are gaining currency. Some advocates contend that reducing single-family zoning in cities would increase the supply of affordable housing by opening up more urban land to multifamily development. In December, the Minneapolis City Council voted to eliminate single-family zoning.

Lightfoot, meanwhile, wants to loosen city regulations to allow basement apartments, coach houses and "granny flats," a change that could bring more low-cost housing to high-cost neighborhoods. In Springfield, proposed property tax breaks for residential landlords could encourage more investment in affordable housing. And in the private sector, Skender, a Chicago contractor, recently opened a factory in South Lawndale where it's building modular housing, an attempt to bring down construction costs for affordable developers.

Support for rent control also is growing in Illinois and other states; some have already passed measures to limit rent hikes. Landlords, who argue rent control would distort the market and limit the creation of affordable housing, managed to stymie a bill to lift Illinois' rent-control ban in the spring legislative session, but the bill's backers haven't given up.