Alderman proposes rent and mortgage relief

Chicagoans who have seen paychecks shrink or disappear during the coronavirus pandemic would have a year to pay rent that accumulates during the statewide stay-at-home order, under a relief package proposed Monday.

“That several month period when folks are really at bottom in terms of income — giving them a little bit of breathing room knowing that they’re not gonna get evicted when the stay-at-home order [expires]. That they’ll have a little bit of time within which to pay that money,” said rookie Ald. Matt Martin (47^th).

“If you’re in the service industry, if you’re in hospitality and you’ve seen your income go, maybe in some situations close to zero, we need to provide that relief to folks. But we also need to make sure that we’re providing it to landlords as well.”

Martin plans to introduce the rent relief ordinance — along with a companion resolution seeking mortgage relief at the state level — at Wednesday’s virtual City Council meeting. He has already lined up 19 co-sponsors and support from the Progressive and Latino Caucuses.

The two-pronged package is patterned after what happened in the state of California.

In late March, roughly 200 national and state-chartered banks, credit unions and loan servicers in California offered up to 90 days of mortgage relief. The Los Angeles City Council followed by offering renters up to 12 months to pay rent that accumulates during that state’s stay-at-home order.

Martin’s resolution asks Gov. J.B. Pritzker to urge banks of all sizes, as well as credit unions, to provide up to 90 days of “mortgage forbearance” to property owners squeezed by the pandemic.

The alderman noted that the federal stimulus package directed Fannie Mae and Freddie Mac — which together guarantee roughly half of all mortgages across the nation — to provide up to 12 months or mortgage relief to borrowers impacted by the virus.

More than 86,000 people applied for 2,000 city rental assistance grants. The $2 million set aside for rent relief by Mayor Lori Lightfoot was gobbled up quickly, with just 2% of applicants getting help.

No wonder the mayor is “very worried about a new wave of mortgage foreclosures” stemming from the economic pain caused by the coronavirus. She’s lobbying hard to make sure the next federal stimulus program prevents it.

Martin called the city assistance a “tremendous start.” But only a start.

“This is an issue in terms of housing security that’s not going away. So we need to identify every tool in our tool box at the city level while making sure that we’re advocating for comparable aggressive decision-making by a state and federal partners,” he said.

“It’s specifically for folks who have lost income due to COVID. It’s not just for anybody. If someone, say, in my position, has had steady employment, steady income during the stay-at-home order, it doesn’t relieve my obligation to pay rent.”

Later Monday, at an unrelated City Hall news conference, Lightfoot threw cold water on Martin’s plan to solve what she called “a complicated problem.”

“Renters, to be sure, are hit. But, so are the landlords. The landlords are struggling to meet their mortgages. Ultimately, where we need to be is to have the banks that hold these mortgages provide some kind of relief all the way down the line,” the mayor said.

“You can’t just solve one part of the problem and ignore the other pieces of it. ... I know a lot of landlords that maybe have one or two buildings. If a renter doesn’t pay rent for a year, what happens to those people who have to pay their mortgage? They rely upon those rents as part of the revenue stream they need to pay their mortgages.”

Lightfoot closed with a parting shot at Martin.

“If you really want to solve problems, you work collaboratively. You work constructively with your colleagues,” she said. Just putting out a press release in response to headlines, Lightfoot added, “really tells me a lot about the seriousness of purpose.”