$5 million loan fund established to help South Shore condo owners and co-ops pay for maintenance and repairs
Since taking office in 1999, Ald. Leslie Hairston (5th) has been trying to find a way to help condo and co-op owners defray the costs of maintenance and repairs.
On Tuesday, Hairston’s 23-year crusade finally came to fruition thanks to an innovative pilot program centered on 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 provide $5 million in grants to owner-occupiers of condominiums and cooperative buildings, as well as “low-interest, long-term loan/grants products” to homeowners’ associations.
The loans and grants would be provided by the Chicago Community Loan Fund in partnership 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 set up to “rehabilitate and stabilize distressed cooperative and condominium buildings,” beginning in South Shore — and ultimately citywide.
Grants and loans of up to $50,000 per unit would be made available, but only in buildings where:
• A majority of the residents are owner-occupiers and at least half of the units are rated as “affordable”.
• At least 25% of the occupants have lived in the building for at least 10 years or the building has so many non-compliances that it is considered ‘distressed’.
• Residents earn no more than 120% of the area’s median income. That’s about $88,000 for a single person and $125,000 for a family of four.
“The goal is to allow long-time homeowners, many of whom are elderly people on fixed incomes, to remain in affordable housing and stay in place in their homes and in old age,” Edwards told the Housing Committee.
“Shared property buildings” often can’t afford major repairs, Edwards said. They often have “occupancy issues” and difficulty accessing credit or charging appraisal fees high enough to fund these maintenance projects.
“In many cases, these additional fees go far beyond the capabilities of the current occupancy. Especially if they have a fixed income. These fixed-income, mortgage-paying seniors just can’t quite honestly afford the exorbitant special investments. This really is a home preservation game,” Edwards said.
“Buildings over 30 years old with water, facade and concrete damage use reserves for emergency patch repairs, code violations. In many cases, we see these buildings popping up in our problem-solving initiatives. And this is one of the tools we hope to use to address this issue.”
Getting banks on board is the long-term goal and the “heavy lift,” Edwards said.
“It really is a drop in the ocean. This is our attempt to see if we can solve some of these problems by supporting them and creating a concept or example for banks to work with us on,” he said.
Housing committee chairman Harry Osterman, 48, asked how willing the banks were to work with the city to help struggling condos and co-ops “given their poor history of lending in communities on the South and West Sides.”
Hairston acknowledged that their quest to solve the problem of delayed maintenance and city-mandated life-saving repairs has dragged on for over 20 years.
“In the areas between 67th, 71st, South Jeffery and South Shore Drives, people would come in and make the improvements and buy the buildings and condos and tell people to stay in their units,” Hairston said.
“Over the years I’ve had condos that didn’t measure up to the city’s life safety rating or anything else because the ratings for those programs were so high that most of those people couldn’t afford it and had to have buildings demolished.”
Many programs are available but are not “aimed at condominiums, co-ops or people on a fixed income,” Hairston said.
“The maintenance costs of a building are increasing. But if you have a steady income, [your income] Not. These are people who have been in the community for 50 years or more,” the councilman said.
“That’s just one piece of the puzzle. This is not something that is comprehensive for the entire community. We’re addressing a specific issue that my constituents have told me they need help with.”
A city press release on the day the loan program launched described South Shore as one of Chicago’s “most densely populated” communities, with residents drawn by the neighborhood’s proximity to Lake Michigan, Hyde Park, the University of Chicago, and the museum for science and industry. It is also near the Obama Presidential Center in Jackson Park.
“However, a significant number of African-American homeowners in the area who live in condos are at risk of being converted into expensive units because owners are unable to pay for deferred maintenance or loans with longer terms than the traditional five.” secure for up to seven years. “, says the press release.