$5M loan fund created to help South Shore condo owners and co-ops pay for maintenance and repairs

Since the day she took office in 1999, Ald. Leslie Hairston (5th) is trying to find a way to help condo and co-op owners with maintenance and repair costs.

On Tuesday, Hairston’s 23-year crusade finally hit the ground running, thanks to an innovative pilot program focused on the South Shore that could ultimately be a model for preserving vulnerable aging buildings across the city.

A City Council committee authorized the Chicago Department of Housing to distribute $5 million in grants to homeowners of condominiums and cooperative buildings and “low-interest, long-term loan/grant products” homeowners associations.

The loans and grants would be issued by the Chicago Community Loan Fund in conjunction with the city’s Troubled Buildings Initiative. The fund is financed by high fees paid by developers to avoid building affordable units in their residential projects.

Deputy Housing Commissioner Will Edwards said the fund was created to “rehabilitate and stabilize struggling co-op and condo buildings” starting with the South Shore – and ultimately across the city.

Grants and loans of up to $50,000 per unit would be available, but only in buildings where:

• The majority of residents are homeowners and at least half of the units are rated as “affordable”.

• At least 25% of residents have lived in the building for at least 10 years or the building has so many code violations that it is considered “distressed”.

• Residents do not earn more than 120% of the region’s median income. That’s about $88,000 for an individual and $125,000 for a family of four.

“The goal is to allow long-time homeowners, many of whom are older on fixed incomes, to stay in affordable housing and stay in their homes and age in place,” Edwards told the Housing Committee.

“Condominiums” often cannot afford major repairs, Edwards said. They often have “tenancy issues” and difficulty accessing credit or raising appraisal fees high enough to fund these maintenance projects.

“In many cases, these additional costs are far beyond the current occupier’s ability to pay. Especially when they have fixed incomes. These seniors on fixed incomes paying mortgages honestly cannot afford the exorbitant special assessments. It’s really a game of preserving ownership of the house,” Edwards said.

“Buildings over thirty years old with water, facade and concrete damage use reserves for emergency repairs, code violations. In many cases, we see these buildings appear in our struggling building initiatives. And this is one of the tools that we hope to use to solve this problem.

Bank involvement is the long-term goal and the “heavy one,” Edwards said.

“It’s really a drop in the ocean. It’s our attempt to see if we can solve some of these issues by supporting it and creating a concept or an example that we can get the banks to work on with us,” he said.

Housing committee chairman Harry Osterman (48th) questioned how willing banks would be to work with the city to help struggling condos and co-ops ‘given their poor history of lending in communities south and west sides.

Hairston acknowledged that his quest to confront the problem posed by deferred maintenance and city-mandated safety repairs has dragged on for 20 years.

“In the areas between 67th, 71st, South Jeffery and South Shore Drive, people were coming in, making improvements and buying buildings and condos and enticing people to stay in their units,” Hairston said.

“Over the years I’ve had condos that couldn’t keep up with the city’s people safety rating or whatever because the ratings to do these programs were so high that most of these people couldn’t afford it and had to have the buildings condemned.

Many programs are available, but aren’t “for condos, co-ops, or people on fixed incomes,” Hairston said.

“The cost of maintaining a building is increasing. But if you have a fixed income, [your income] doesn’t. These are people who have been in the community for 50 years or more,” the alderman said.

“It’s just one piece of the puzzle. It’s not something for the whole community. We’re addressing a specific issue that my constituents have told me they need help with.

In a press release issued by the city the day the loan program was introduced, South Shore was described as one of Chicago’s “most densely populated” communities with residents drawn to the neighborhood’s proximity to the Lake Michigan, Hyde Park, the University of Chicago and the Museum of Science and Industry. It is also close to the site of the Obama Presidential Center in Jackson Park.

“However, a significant number of African American owners in the area residing in condominiums are at risk of being converted into high-cost units due to owners’ inability to pay for deferred maintenance or obtain longer-term loans. term than the traditional five to seven years,” the statement said.

Comments are closed.