Supporters of a proposed 49th ward rental improvement fund, who say it would improve rental stock and preserve its affordability, may be one step closer to their goal after Alderman Joe Moore introduced an ordinance at Wednesday’s City Council meeting.
Moore’s ordinance commended the Department of Community Development for its support of an eligibility study. The study is the first step towards realizing the proposed improvement fund. Betsy Vandercook, Moore’s chief of staff, said formal support could help the groups proposing the RIF find funding for the study. “Joe is always open to any new initiatives or experiments for expanding affordable housing,” Vandercook said.
Rogers Park-based organizations Lakeside Community Development Corporation and Northside P.O.W.E.R. developed the RIF proposal. The proposed fund would provide grants for multifamily rental property repair and rehabilitation. Grants could be used by landlords to bring a building up to code or for other improvements including brickwork, roofing, gutters and downspouts, windows and doors, porches, plumbing, heating and electrical systems.
Recipients of the grants would be required to keep rents affordable for 10 years.
Grants would be available on a per-unit basis and the amount of the grant would depend on the rent limits for the unit. Rent limits would be calculated as a percentage of the area median income, a value determined by the Department of Community Development. Based on the March 2009 AMI, the proposal listed an example rent limit for a two bedroom unit where the tenant pays all utilities as $404 at 30 percent of the AMI, $743 at 50 percent of the AMI, and $914 at 60 percent of the AMI.
The maximum grant for a single unit would be $17,500. For multiple units, up to a total of $350,000 could be granted to a property.
The rental improvement fund would get money through tax increment financing. Vandercook said the proposed TIF district was “very unusual” because it would be the first district in Chicago to cover an entire ward. The TIF could generate more than $54 million according to estimates published by Northside P.O.W.E.R.
Eligibility studies, conducted by city-approved consultants, are required before the city can create a new TIF district. The multi-stage study can cost hundreds of thousands of dollars said Rev. Marilyn Pagán-Banks, executive director of Good News Community Kitchen and Northside P.O.W.E.R.
Pagán-Banks said the idea of the rental improvement fund came out of concern over the loss of affordable housing in Rogers Park. A wave of condominium conversions that happened in the mid-2000s “really hurt the rental stock in the community,” Pagán-Banks said , and affordable rentals were particularly hard-hit. While the economic downturn has stopped the wave of condo conversions, the affordable rental housing stock that was lost is still gone, Pagán-Banks said.
The loss of affordable housing can affect other aspects of the community such as education, Pagán-Banks said, citing Gale, a Rogers Park school she said was “severely underenrolled.” A decrease in a school’s enrollment can result in a decrease in funding, she said.
Cindy Bush, director of organizing at Northside P.O.W.E.R., is trying to meet with as many Rogers Park business owners and residents as possible to build broad-based support for the RIF’s eligibility study. “Just about everyone we’ve talked to is on board with the notion of maintaining affordable rental housing in Rogers Park,” Bush said.
This does not mean that the proposal is an easy sell. “The biggest reservation that I have heard is around the concept of TIF.” Supporters of the RIF try to distinguish its TIF district from existing ones. “We view the RIF as a reformed TIF,” Bush said.
Unlike traditional TIF districts, which calculate a tax revenue base line that remains static over the TIF district’s 23 years, the proposed TIF district would have a base line that could rise with the cost of living up to 1 percent per year. This would allow taxing bodies to get additional revenue as their costs rise.
The RIF proposal indicates funds would be “use-it-or-lose-it.” If unused funds reached a certain level, the RIF would receive no additional funds from the tax increment.
Pagán-Banks said that lack of transparency and community direction and involvement were two prime criticisms of TIFs. The RIF proposal calls for the creation of a community-based board to make decisions about the fund. It also calls for transparency through open meetings and the publication of financial statements.
Pagán-Banks also expects some concern from business in the ward as funds from the proposed TIF district would only finance improvements to rental housing and not commercial development. Still, Pagán-Banks said, affordable housing allows people to stay in the neighborhood, which is “good for everyone.”
While the process to create the RIF started last year it is still in its early stages, Vandercook said. Supporters of the proposal will work to fund the eligibility study and continue to develop community backing, Pagán-Banks said. “If the community doesn’t support it, it’s not going to happen.”
A public meeting to discuss the RIF is scheduled for April 18 at 3 p.m. at Rogers Park Presbyterian Church, 7059 North Greenview Ave.