Room for Argument | Neighborhood News | Chicago Reader

News & Politics » Neighborhood News

Room for Argument

Subsidized housing, Uptown-style: there's too much, there's too little, and you don't have to be poor to live there.

by

comment

By Nadia Oehlsen

We'd been looking into each other's apartments for four years. Most of the members of the extended Lao and Cambodian families in the building across the street left for work or school around 8 AM or began commercial sewing at home just after calisthenics at dawn. On weekends they often had small parties or piled, dressed up and carrying food, into newly washed cars and vans.

Their three-story building--4700 N. Beacon, at the corner of Leland--was run-down but charming, with large circular rooms on the southeast corner where the luckiest tenants sewed, played with their kids, and enjoyed the cross ventilation. Outside, in the overlapping universes of Uptown and Sheridan Park, prostitutes, gangbangers, and drug dealers worked among children and parents waiting for school buses, young professionals walking their dogs, kids making up complicated jump-rope games, families buying elotes and ice cream, guys searching the grass for cigarette butts, people pushing shopping carts full of cans, pods of teenagers being loud but generally legal, and people with cell phones surveying potential investments.

For months a broken window in the building's southwest door allowed drug dealers and aggressive missionaries easy access. None of the residents seemed to have anything to do with the illegal trades on their corner or in their stairwell, except one guy whose associates appeared under his first-floor window day and night, yelling his name.

Then last summer everyone moved out. The building stood empty, the windows and doors blocked by metal security covers, until a month ago, when rehab workers started showing up.

This being Uptown/Sheridan Park, I was surprised to learn the apartments weren't being turned into more $150,000-plus condos, the kind that have proliferated in this neighborhood over the past few years. Instead the building is being rehabbed by the Chicago Metropolitan Housing Development Corporation (CMHDC), a nonprofit offshoot of the CHA founded in 1982. The 12 large two- and four-bedroom apartments will have central air and heat, new appliances, and washers and dryers in each unit. Nine of them are to be rented to people who qualify, according to U.S. Department of Housing and Urban Development standards, as low and very low income, and one of the families that moved out might qualify to move back into the building (CMHDC says the other former tenants either didn't respond to invitations to apply or said they weren't interested). The remaining three units will rent for whatever the Uptown market will bear.

Of course this being Uptown/Sheridan Park, CMHDC's request to the Illinois Housing Development Authority for a $1.2 million loan to help rehab the building, which IHDA approved last month, sparked the usual neighborhood complaints that the 46th Ward has too much subsidized housing as well as complaints that the 46th Ward doesn't have enough affordable housing--accompanied by the usual charges of classism, racism, displacement, secrecy, deception, and meanness. Each side also lined up behind rival surveys of housing stock in the census tract that includes the building, and each clucked that the other side's survey results were skewed.

Neither side disputes that Chicago has lost affordable rental housing to the demolition of CHA high-rises and the skyrocketing cost of housing brought on by the real estate boom of the past few years. But the Beacon building squabble highlights the lack of clear definitions in the long-running Uptown/Sheridan Park housing debate: What housing counts as affordable? What incomes count as low?

CMHDC, like many other nonprofit and government groups that fund or provide low-income housing, uses HUD's classifications when it comes to defining income levels. In Chicago the levels are based on what households make relative to the median income for the six-county metropolitan area: incomes from 51 percent to 80 percent of the median qualify as low, 31 percent to 50 percent as very low, and 30 percent or less as extremely low. Given that the wealthy collar counties have helped push the 2000 median income for a family of four to a whopping $67,900, a family earning up to $50,200 a year qualifies as low income, as does an individual making up to $35,150. "Many times people are in shock with that," says Rafael Leon, executive director of CMHDC. And it's probably not the income range many Uptown housing advocates think of when they call for more affordable housing in the neighborhood.

Representatives of the Organization of the NorthEast didn't offer a definition of what they considered affordable when they made a statement to the IHDA board in March supporting the loan to CMHDC. But they indicated that they saw the Beacon building plan as affordable. "This is exactly the type of development we need in Uptown: safe, decent, mixed-income affordable housing owned and operated by an experienced and proven housing development corporation," the statement said. "4700 N. Beacon has the potential to catalyze further mixed-income development in an area that sorely needs quality rental housing--not because every other building is run down, but because, in fact, 100 percent of all the housing developed in our community over the last three years has converted once-affordable rental buildings into high-priced homes and condominiums."

Opposing ONE and the IHDA loan were members of the Sheridan Park Neighbors Association, who argued before the IHDA board that their neighborhood already had plenty of affordable and subsidized housing and that subsidized housing too often brought crime with it. They brought along crime statistics and addresses to show that many perpetrators lived in local subsidized apartments, and they said they were wary of CMHDC because it was so closely tied to the CHA, which hadn't done a good job of managing the 112 scattered-site apartments it had built in the tract in the mid-90s. Michael McElroy, president of SPNA, says he's skeptical that CMHDC can maintain a safe apartment building with the proposed income mix without a full-time manager at the site, given that the corner has for years been favored by drug dealers and prostitutes. "The issue is how is CMHDC going to ensure that this building doesn't become susceptible to the environment that it's being placed in?" he says. "I'm not saying that dealers will move in and start doing illicit activities. What we're saying is there are buildings in our neighborhood--and they're private buildings as well as buildings that receive subsidies--that have problems with prostitution, with drug activity."

To make the case that the neighborhood had enough affordable housing, SPNA members spent several weeks counting and classifying the housing in the census tract that includes 4700 N. Beacon, which covers the area south of Lawrence, east of Clark, north of Montrose, and west of Broadway. They used previous neighborhood studies, visual counts, census data, Freedom of Information Act requests, and phone calls to landlords and government bodies that subsidize rental units in the tract. Their numbers show a loss of rental housing--affordable or not--in the tract, and a big gain of condominium units, though many of them have been built on long-vacant lots. A 1994 SPNA survey of the same tract counted 3,760 rental units; in early 2000 there were 3,449. The group logged 266 condos in 1994 and 761 this year. "Many of those rental units that were lost were substandard housing and were replaced not just with condos," says Terry Elliott, a member of the Magnolia-Malden Neighbors block club who helped do the survey. "Between 1994 and today we've had at least 237 subsidized units built. So we lost substandard housing, we gained a lot of condos--and we also gained a lot of subsidized units."

Their report to IHDA classifies 64.5 percent of the tract's housing as affordable and 31.4 percent as subsidized. It states, "Despite assertions by some that the community has lost most of its private sector affordable housing units, the numbers confirm there are thousands of housing units in the community that are currently priced within government affordability guidelines."

In deciding what qualified as affordable, SPNA used the formula the Cook County assessor's office uses to determine whether a building owner can qualify for its Class 9 program, under which owners who renovate multifamily buildings in low- and moderate-income census tracts can get their property-tax assessments cut in half if the rent, electricity, and gas costs of at least half of their units are affordable to low-income tenants. Like CMHDC, the assessor's office bases its formula on the HUD median income for the metropolitan area--in this case, 55 percent of the median.

Alderman Helen Shiller, a staunch proponent of affordable housing in the 46th Ward, insists that there's a lot less of it than the SPNA figures show. In March 1999 she did a survey that counted housing units in roughly the same census tract (she counted 3,447 total housing units; SPNA counted 4,267). "Out of frustration at misinformation being passed on--especially by Sheridan Park Neighbors--on the numbers of subsidized units in this particular census tract, I did formally what informally I knew," she says. "I drove slowly down every street, identifying every building and writing down on a piece of paper exactly how many units were in that building and characterizing it."

Shiller's study didn't specifically classify any of the housing stock as affordable, she says, because a definition is so hard to pin down. "It's not something that's static. It is moved with the market and with these other things that have happened relative to the market--the CHA policies and other public-housing policies, how much federal money we have to put into programs that the city carries out, etc." But, she says, if she ever did try to calculate what qualified as affordable, she certainly wouldn't use HUD's median income figure. "What does that mean? It doesn't mean anything. It has nothing to do with what people can really afford. The HUD guidelines have nothing to do with the city--they have to do with the metropolitan area."

Shiller's survey divided the housing into 14 categories: 7 of them subsidized rental apartments, and 7 of them market-rate rentals or owner-occupied apartments. It shows that only 14 percent of the tract's housing was subsidized in 1999, and Shiller says that percentage hasn't gone up since. "I'm well aware of any time there's any kind of public funding on anything," she says. "[SPNA is] grasping for some way to talk about how we have more poor people than we should have, even though there's been something like tens of thousands of people displaced from this community in the period of time I've lived here. And they're creating a straw man by using HUD's figures--because they're HUD it makes it seem like we're talking about subsidized units when we're not." (Neither she nor SPNA included Section 8 rentals when counting subsidized housing, because the apartments' rents remain the same whether or not the tenant has a Section 8 certificate.)

Elliott counters that the SPNA findings are accurate and were compiled in good faith. He also says he'd be happy to consider other ways to categorize housing in future studies. "We would welcome the opportunity to sit down with ONE, Helen Shiller, HUD, all these different funding agencies and talk about a mutually agreed way of classifying the buildings in the neighborhood. We all need to sit down and determine that we're all on the same page, that we all are using the same definition." But, he adds, "by anybody's measure and a common-sense measure--especially compared to other neighborhoods--we have many times over the amount of subsidized and low-income and affordable housing."

Shiller responds, "If you want to figure out for every category of every kind of person that exists what might be affordable, sure. But otherwise, who are you to say whether something's affordable to somebody or not? You don't know their life."

ONE has been preparing to conduct its own study of the housing stock in Uptown and Edgewater, where many of its 67 member organizations are based, a venture that will take several months. And they're planning to discuss what housing they'll classify as affordable, along with what they might recommend as the ideal mix of incomes for the neighborhoods. "We're in the process of defining that for ourselves and the community as a whole," says Tom Walsh, cochair of ONE's land-use and housing-strategy team. "But we do know without a question of a doubt that this is becoming an unaffordable neighborhood for working-class people. Over the last three years there has been nothing but unbalanced development in the community, where developments happen that are strictly for upper-income folks."

The Beacon building represents a change in CMHDC's policy on the income levels of tenants. "In the past it has all been very low income," says the organization's Rafael Leon. "My position has been that we need to integrate development, so rather than having all very low income, it's better if we have some market rate, some low income, and some very low income." As a consequence, the incomes of the building's new tenants might well be higher than the incomes of the old.

Of the nine non-market-rate apartments in the building, four will be set aside for individuals or families who make up to 50 percent of HUD's median-income figures (paying $400 for a two-bedroom and $550 for a four-bedroom), and five will be reserved for people who make between 51 percent and 80 percent of it (paying $800 for a two-bedroom and $900 for a four-bedroom). However, Section 8 certificates could help tenants who don't meet the minimum income requirements qualify, and former CHA tenants will be considered as candidates for three of the units. The rents for the two-bedroom market-rate apartments will start at $950, the four-bedrooms at $1,450.

There's an irony at the center of this fight. If IHDA had refused to give the loan to CMHDC, CMHDC would have paid for most of the project by tapping the $2 million it gets every year from HUD as part of a 1992 bond-refinancing agreement. That money can be used only to finance rehabs that will house people who make a maximum of 50 percent of HUD's area median income--which would have meant that all nine of the non-market-rate apartments in the building would have had to house people with very low incomes. By lobbying for the loan, ONE and Shiller were pushing for higher rents in the building, and by opposing the loan, SPNA members were pushing for lower rents.

SPNA member David Rowe says his group understood that, but adds, "If IHDA's mission as an organization is to provide quality affordable housing, they fail if they fund this project." Walsh says ONE members also understood what they were supporting--but they believed CMHDC knew best how to finance its own developments. "They're going to be able to do more this year," he says. "Their pot is not as empty as it would have been if IHDA did not come in." He adds that ONE members also thought that showing community support for the loan could help attract future affordable-housing developments to the neighborhood.

SPNA members say the community would benefit more from fostering economic diversity among home owners. Rowe says his group would gladly have supported the Beacon building project if it had been subsidized condos, because even though the residents would have been low income, they would have had a higher stake in the community. And he argues that such a project would have empowered low-income people more, by giving them a real opportunity to own homes. "In areas like Woodlawn and South Shore they have affordable home ownership programs, and people are praising them, saying that's great that people can get out of the cycle of just renting if they don't make a lot of money. It's shunned in our area. I don't understand it. Why in the 46th Ward is affordable home ownership not promoted?"

Leon says that CMHDC considered converting 4700 N. Beacon into condos, but the project's high cost--$750,000 to purchase and an expected $1.2 million to rehab the badly deteriorated building--made that idea infeasible. "You'd have to sell for around $200,000 per unit just to break even," he says. "That's not affordable to a very low income family."

Shiller says she's working on creating affordable condos in the ward, but she insists that rental housing is still needed because so many of the new condos on the market are not new construction but conversions, which have helped drive up the cost of rentals in the neighborhood. "By lowering the amount of units available on the rental market," she says, "we create more of a need--which raises the market level, which means it's less affordable to other people. To have a healthy community and one in which everyone has the opportunity to contribute in terms of building and being considered an equal partner, you need to have diversity. You need to have diversity economically, as well as in every other way. We will have a very serious problem if we end up with people who are just very poor and people who have a lot more money."

Art accompanying story in printed newspaper (not available in this archive): photo/Chip Williams.

Add a comment