Two years after launching an audacious plan to stem the loss of affordable housing by buying up foreclosed properties, a Northwest Side community group is declaring victory.
Communities United, formerly known as the Albany Park Neighborhood Council before it expanded its turf, expects to close later this month on the purchase of its 19th small apartment building.
When rehab work on the buildings is completed within the next year, the group will have helped preserve 44 affordable apartment units for low-income families.
That’s a small victory, to be sure, in the face of a wave of gentrification and displacement that is sweeping through Albany Park. But Communities United hopes it’s just a start.
“Maybe to some people 19 buildings doesn’t sound like a lot, but to us that’s almost 50 families,” said Diane Limas, the group’s president. “The real victory is that these properties are going to stay affordable.”
When I first reported on Communities United’s efforts in December of 2014, I honestly wasn’t very optimistic about its chances, despite my respect for the group’s organizing abilities and Limas’ determination.
The audacity of their plan was thinking they could win cooperation from the Federal Housing Finance Administration to allow for the purchase of some of Fannie Mae’s foreclosed properties at a discounted price.
At the time, the group calculated 40 percent of the foreclosed properties in Albany Park were owned by Fannie Mae, the unhappy residue of the mortgage foreclosure crisis. Communities United’s theory was that Fannie Mae had helped create the foreclosure problems facing the community, and it ought to be willing to be part of the solution.
Federal agencies have rules, however, and FHFA’s rules require it to receive maximum value for the properties on which it foreclosed.
But with assistance from local members of Congress and other elected officials, as well as its non-profit development partner, Chicago Metropolitan Housing Development Corp., the community organization painstakingly persuaded Fannie Mae to work out the details to make the transactions possible.
That included obtaining the properties at a 20 percent to 35 percent price reduction, Limas said.
The federal agency chalked up the lower price to a “cost avoidance strategy” based on the savings it would achieve by selling the properties more quickly and avoiding possible legal roadblocks, said Nick Jefferson, a Communities United organizer.
Nine of the most recently purchased properties were also obtained with the help of state tax credits issued by the Illinois Housing Development Authority. That transaction required the involvement of the Cook County Land Bank.
The reduced purchase price and tax credits allow the non-profit to offer rents at $300-$400 per month less than the area’s market rate apartments.
Rafael Leon, executive director of Chicago Metropolitan Housing Development Corp., admits he also was “very skeptical” in the beginning about Communities United getting cooperation from Fannie Mae.
“They were not the easiest entity to work with,” he said of the federal agency. “I think it took a lot of pressure from the elected officials.”
As frustrating as it often was to deal with Fannie Mae, Limas said the effort to buy the properties would not have succeeded without the agency’s support.
Communities United’s influence flows from the strength of its grassroots organizing efforts.
From its start in Albany Park, the group has branched out into Belmont-Cragin, North Park, Irving Park and West Ridge. The 19 properties purchased from Fannie Mae are located in those neighborhoods.
Now that Communities United has shown what’s possible, Limas said she would like to see the program expanded and wants major commercial banks holding foreclosed properties to also sell at discounted prices.
If it was most anybody else, I’d say that’s never going to happen. But with these folks, you never want to count them out.