City housing officials expect to meet their goals for the production of affordable housing this year, but say it is going to cost more than expected.
These conclusions emerged from the housing department's first quarterly report for 2008, presented by Commissioner Ellen Sahli at a meeting of the city's housing committee yesterday.
The report documents the department's progress toward meeting the goals of the last year of a five-year plan that began in 2004. But the mortgage crisis continues to exert a drag on efforts to create affordable housing.
Overall, the department is "right on track" to meet its annual goal of over 15,000 units by year's end, Sahli says. Last year, the department fell short of its production goal
by approximately 2,300 units.
But rising construction costs and decreasing revenues due to the housing slump have made it more difficult for the city to meet its goals. With three quarters remaining, the city has already spent 11 percent more than originally projected for the five-year plan, according to the department report.
Also key is a drop in demand for low-income housing tax credits, a primary method of drawing investors to affordable housing projects.
"We've had a significant loss of equity as a result of tax credit pricing," said Sahli.
According to the report, the department of housing spent over $18 million to preserve and create 3,800 units of multifamily affordable rental housing in the first quarter. That figure includes existing properties operated under rent subsidy programs.
The Chicago Rehab Network, a coalition of nonprofit developers who analyze the department's quarterly reports, say the total of new multi-family units developed was 335.
There were 446 new single-family homes developed in the first quarter, at a cost of $48 million, city figures show.
But some question where the benefit is going.
Kevin Jackson, executive director of the Rehab Network, presented data indicating that over 60 percent of the single family homes created went to households earning 80 percent or more of the area's median income, which is $59,600 for a family of four.
"We need to acknowledge that we have a single family production line that is consistently serving a higher income population," said Jackson. "You want to create housing programs that are in concert with people's incomes in the local community."
The Rehab Network wants the city to look into redeveloping foreclosed housing stock into affordable housing.
Foreclosure filings in Chicago in April of this year totaled 1,549, a 17 percent increase over March, according to the group's report.
"There's a growing community of people that are struggling to find housing that's affordable, " said Jackson. "At the same time, there's an increasing supply of foreclosed homes that with the right approach, could become a resource that could support both owner and rental housing. The stock that is in foreclosure could, if rehabbed and reused, represent a significant cost-saving for the city."
On the other hand, Jackson said, without action by the city, the number of units going into foreclosure could exceed the housing department's gains.
Sahli acknowledged that while the city's effort to deal with pre-foreclosure issues are strong - 1,000 people were served in the first quarter through the city's Borrower Outreach Days
, she said - efforts to deal with housing left empty by foreclosure are hindered by a lack of resources.
"How are we going to pay for this? That's the key here," said Sahli.
Help could come in the form of federal relief.
Sahli said recent congressional legislation could make funds available for the development of abandoned and foreclosed properties through the community development block grant program.
"We have to do this in a way that we have the right mix of resources and services to ensure that we have a real solution and not just a Band-Aid," said Sahli.