Chicago City Council committee approves loan fund to preserve single-occupancy buildings
In 2014, Chicago was home to 81 single-room apartment buildings. Now there are only 40 SROs which, as one official put it, “help people get off the streets”.
On Wednesday, the city council’s housing and property commission took a small but important step in an attempt to stop the bleeding.
Despite concerns it was too little, too late, aldermen approved Mayor Lori Lightfoot’s plan to create a ‘single room occupancy preservation loan scheme’ fueled by a sinking fund of $5 million administered by the Chicago Investment Corporation.
To qualify for city loans, SRO developers must first obtain private loans covering at least half of the amount they need. The construction financing would then be “converted into a long-term permanent mortgage”, with proceeds from the $5 million fund being used to “cut the monthly mortgage payment in half”, officials said.
Deputy Housing Commissioner Esther Sorrell said the city “learned a lot from the pandemic” after relying heavily on ORS to “house a very vulnerable population.”
“In return, these owners let us know about the issues they were having with the city and the support they needed to stay operational,” Sorrell said.
“We have lost 40 SRO buildings over the past few years. We don’t want to erode that number any further.
Noting that “many” ORS landlords are keeping rents “at a level accessible to people on very, very low incomes,” Sorrell said: “We want to be able to preserve that so they can continue to offer lower rent while we also continue to work on the creation and rehabilitation of properties with other funds that we have in the department.
Ald town center. James Cappleman (46th) said he would “reluctantly back” the $5m loan fund.
But he expressed deep concern over the use of city loans to ‘help 250 square foot ORS’ when city money could be used to ‘rehabilitate studios and one bedroom apartments for the same cost.
“I want a pilot project for my parish to do the exact same thing. But I want it for studios and one-bedroom apartments, which would cost almost the same and allow people in extreme poverty to stay in their homes if they are getting married or if they need someone to stay with them during their recovery. of a disease,” Cappleman said.
“People living in ORS don’t have those kinds of options. And I believe that those who have a very, very low income deserve better. So I will support it reluctantly. but I’m not happy with that.
Cappleman said he understands ORS is “for people at high risk of becoming homeless.” But, he argued, many of those residents receive a Supplemental Security Income check, known as SSI, “or no income at all.”
“This ordinance still has this group of people who pay 60% of their income for rent. … These rents in these SROs are around $500 or $600 a month. And their SSI check is $840 a month. So it’s not realistic,” he said.
Housing committee chairman Harry Osterman (48th) said the ordinance was crafted after housing advocates and SRO residents “demanded it”. Loans are desperately needed so that some SRO residents don’t live “in misery”, Osterman said.
“We have lost half of the ORS in our city since 2014. There are not many new ORS being built. They are places that help people get off the streets, out of tents and into homelessness. It’s important for all of us to really do what we can to help support them,” Osterman said.
“It’s a small amount of money. It should be more. But if we are able to lift and support some of the renovations needed to make them a little nicer for the residents who live there, it will help them and their quality of life.
West Side Ald. Emma Mitts (37th) applauded the Department of Housing for, as she put it, ‘deciding, for the first time, that ORS matters’. She called it “the step above homelessness”.
“These owners cannot maintain [their buildings] because the government gave them no funding. The city did nothing. And those buildings are deteriorating,” Mitts said.
“I really want to, at least, help provide assistance to them. They fight. But also, the people in the building are struggling. I always say, if we can’t help the least [fortunate], who are we going to help? Yes, we can always do more. And I’m sure that as we continue to work on this issue, we will get there because we have to start. I appreciate you starting.