Nonprofit landlord adds to holdings while keeping rents low
Preservation of Affordable Housing is tapping subsidies to make deals workable and assure tenants they can afford to stay.
In these hyper-partisan days, it’s easy to draw lines in the sand. One that gets drawn, especially in a time of suffering and people being unable to make ends meet, is this: Tenants are good, landlords are bad.
There are plenty of examples of abusive landlords without compassion or an ability to manage their property. With evictions on hold because of the pandemic, the city’s Housing Department has been getting complaints about landlords who have illegally locked out tenants.
But landlords — the good ones — have problems, too, starting with their own bills to pay. Times can be hard for those with good intentions. That includes nonprofit landlords who try to provide housing for groups most in need of it.
So it’s worth noting positive developments last week on the housing front, starting with two pieces of news involving the national group Preservation of Affordable Housing, which has been active in Chicago since 2009 and now has about 1,900 units in the city.
The Chicago Housing Authority last week approved subsidies that will help POAH acquire and preserve 56 apartments for low-income seniors in Rogers Park. The group is acquiring Levy House at 1221 W. Sherwin Ave. from the Council for Jewish Elderly. Many in the community were concerned that Levy House, close to Lake Michigan, would become market-rate housing.
Bill Eager, senior vice president for POAH’s Midwest region, said the sale was for $8.1 million. He said keeping rents affordable wouldn’t be possible without the CHA’s involvement. The agency has provided vouchers to subsidize rents for tenants who are CHA-eligible, as well as a loan of up to $3 million.
Eager said the money will allow POAH to rehab the property. Because of the subsidies, the owner collects more money, but tenants’ out-of-pocket cost should be about the same, less in some cases, he said.
The CHA originally wanted to buy the building itself but had second thoughts, Eager said. He called its funding decision “exemplary,” saying that without it, “we wouldn’t be in this position.”
In another deal, POAH has locked in funding sources to allow it to proceed with renovations at the 91-year-old South Chicago YMCA, 3039 E. 91st St., which includes 101 units for senior housing. It was a hub of local life, but its recreational space has been closed since 2017. Along with the community group Claretian Associates, POAH acquired the property last year for $10.8 million during the YMCA’s divestiture of sites that include housing.
The project has qualified for a $1 million loan from the Illinois Housing Development Authority and a $4.65 million loan from the Chicago Department of Housing. It also gets low-income housing tax credits and tax-exempt bonds, and it’s supported by federal Section 8 rental subsidies. Such a patchwork of money is necessary to keep rents affordable.
With the funding, POAH and Claretian Associates can guarantee affordability for 40 years. Eager said the planned $11 million in improvements include a transformation of the recreational space into a 40,000-square-foot community center for health screenings, employment and housing services, counseling, a gym and other activities. The center also will serve as the new offices for Claretian.
Eager said exterior work can start soon and apartment renovations should begin in 2021, with the process incorporating safety concerns raised by the pandemic. He said some tenants may have to be briefly relocated to a hospitality suite or to a hotel for a short-term stay. He said he’s looking for financial help that would allow a reopening of the YMCA’s pool. Canopy Architecture and the general contractor Skender are involved in the job.
There’s something else on the housing beat. Last week, the City Council approved Mayor Lori Lightfoot’s plan for $3 million in grants and low-interest loans for 40 affordable-housing projects that together account for 3,400 units. The money can be used to cover lost rent or costs attributable to COVID-19. Ald. Ray Lopez (15th) called it a developer bailout, but it also stabilizes low-income housing that could fail in the economic crisis.
Eager said POAH’s rent collections are down 10% to 15%. Even before evictions were halted, POAH agreed to stop them and committed to talking with tenants in trouble and working out deferred payments when necessary, he said.
The city, he said, is trying to be flexible with its help for landlords committed to affordable housing. “They’re trying to keep people housed without hurting landlords who also have bills to pay,” he said.
“I really hope one of the things that comes out of this is the broad realization of the need for decent affordable housing.”
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