Affordable housing advocates have reason to crow over SRO renovation

Advocates of preserving single room occupancy housing in Chicago chalked up a big win Monday with the reopening of the restored Carling Hotel on the Near North Side.

The 155-unit residential hotel in the 1500 block of North LaSalle Street was gutted and transformed into 80 efficiency-style apartments dedicated as affordable housing.

Saving the Carling was one of the first big tests of the city’s SRO preservation ordinance that was pushed through the City Council with backing from Mayor Rahm Emanuel in 2014.

But completing the $27 million project required a large commitment of public funding that affordable housing advocates say has been harder to find since the Emanuel administration put its muscle behind preserving the Carling and its sister property, the 165-room Marshall Hotel in the 1200 block of North LaSalle.

Without that funding, other SRO buildings could soon be swept up by market-rate developers, the same problem that led to passage of the preservation ordinance, advocates warn.

The Carling and Marshall hotels were regarded as particular plums for developers because of their choice location near downtown.

When the longtime owners of the properties, the Dolins family, gave official notice to the city in January 2015 of their intent to sell, affordable housing advocates feared the worst.

But after some 50 years in the SRO business, the Dolins family proved to be particularly committed to keeping the buildings affordable and worked patiently with the city and new owner, New Jersey-based Michaels Development Company, as it lined up financing.

On Monday, many showed up to celebrate the reopening of the Carling, where the rehabbed units now have private bathrooms and kitchenettes instead of the shared facilities on which tenants previously relied.

Nobody was more excited about the Carling’s rebirth than Calvin Coolidge Glaze Jr., a retired doorman who lived in the building for 25 years before moving out during the restoration project.

Glaze was appreciative about being allowed to return to his home — and about getting the chance to stand in front of an audience with Mayor Rahm Emanuel and Ald. Walter Burnett (27th) at his rear.

“They promised what they said they were going to do, and then it worked,” said an exuberant Glaze.

Only a handful of Glaze’s former neighbors have moved back in. Some of the prior tenants didn’t qualify for the rent subsidies.

Many chose not to return after collecting permanent relocation benefits of between $8,000 and $24,000 and moving elsewhere, said Greg Olson, regional vice president of Michaels Development.

Burnett, who sponsored the SRO preservation ordinance, praised the mayor for “putting his money where his mouth is” on the Carling renovation.

That began with the city first buying the hotel for $10 million to protect it from other potential purchasers, and then transferring it to Michaels Development for $3.8 million.

The city also committed $2.7 million from its Low Income Housing Trust Fund for rental assistance, which will allow 26 rooms to be made available for tenants earning up to 30 percent of the area median income.

In addition, various tax credit programs were tapped to provide $16.8 million in equity for the project, including $11.5 million from the Illinois Housing Development Authority.

Arranging such financing can be very time-consuming, which can be a problem when SRO owners are eager to sell.

Housing advocates say that requires a commitment from the city to work with property owners and not-for-profit affordable housing developers to identify government financing.

The preservation ordinance requires the owner of an SRO to work with not-for-profit developers for six months before offering it for sale to market-rate developers. That sometimes isn’t enough time.

Burnett said he thinks the SRO preservation ordinance is working better than he expected, citing three buildings in his ward that have been saved, not including the Marshall, where the rehab is still in progress.

Others are concerned that an initial flurry of preservation activity has stalled without more city funding.