Brown: Owner backs off promise of rental subsidies

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Asbury Plaza resident Ron Simmons is among low-income tenants concerned about an effort by owners of the Near North Side apartment building to end its contract to provide Section 8 apartments. | Mark Brown / Sun-Times

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Owners of a Near North Side high-rise built with government financing on the promise of setting aside 20 percent of the apartments for federal rent subsidies are trying to break their commitment five years early.

Affected residents of Asbury Plaza, 750 N. Dearborn, are concerned they will be displaced as a result, despite assurances from ownership that it is committed to keeping the apartments affordable and that nobody will be forced to move.

Officials at the Illinois Housing Development Authority, which provided the original mortgage for the development, have advised Asbury Plaza it can’t back out of the deal without the agency’s permission — and so far have refused to give it.

The case has set off a flurry of saber-rattling from all parties with everyone threatening legal action.

OPINION

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IHDA issued a statement Friday indicating the agency is “actively seeking to achieve a compromise.”

I’m interested because the matter sheds light on one more way poor people are at risk of being squeezed out of Chicago’s prime neighborhoods.

Asbury Plaza opened in 1981 with a 40-year commitment to make 77 of the building’s 384 apartments available to tenants receiving Section 8 housing-assistance payments. Section 8 recipients pay one-third of their income toward rent, with the federal government making up the difference.

That agreement is scheduled to expire in 2021.

But officials at The Habitat Company, which manages the property for Asbury Plaza Venture LLLP, contend they are within their legal rights to opt out now because they paid off their mortgage last year.

IHDA has strongly disagreed, as have lawyers at the Sargent Shriver National Center on Poverty Law and Legal Assistance Foundation, who have taken up the cause of the 132 affected residents, nearly three-fourths of whom are African-American.

At the Shriver Center’s urging, IHDA ordered Habitat to rescind a letter it sent residents in late April warning them it was terminating its Section 8 housing-assistance payment contract effective June 1, 2016.

Allowing Asbury Plaza to end its contract to provide Section 8 housing “would result in the loss of much-needed affordable housing in the area of the development and would prematurely disrupt the residency of the tenants,” Mary Kenney, IHDA’s executive director, said in a letter to Habitat’s president, Matthew Fiascone.

Instead of pulling back, Habitat doubled down, bringing in lawyer Michael Shakman to argue its cause.

In an interview, Fiascone said tenants will be eligible for federal housing-assistance vouchers that will permit those who desire to stay at Asbury Plaza to remain indefinitely or to relocate if they prefer.

In addition, he said owners have voluntarily committed to creating a $500,000 subsidy pool of their own to make sure all 77 apartments are available for affordable housing through the previous 2021 commitment date.

Daniel Levin, Habitat’s chairman, is also a general partner in Asbury Plaza Venture Ltd. Partnership, which developed and owns the property.

Ron Simmons, 60, has lived 21 years at Asbury Plaza and said he is among many who don’t trust what he calls Habitat’s “vague” promises.

Simmons, who walks with crutches, receives Section 8 rental subsidies because he is disabled. He said he suffers from post-polio syndrome, the result of a childhood bout with polio.

Simmons figures the owners are in a hurry to get rid of low-income tenants to make the building attractive to more affluent renters.

“This Near North Side is changing, and it’s changing drastically. There’s not going to be a lot of people of color or low income living here,” Simmons said.

Simmons questions why the company would terminate its Section 8 contract if it is truly committed to keeping the apartments affordable.

Fiascone told me that’s because the owners would be allowed to collect higher rents from the federal government under new subsidy programs than the old program under which residents now qualify.

Kenney said IHDA’s “primary concern is to fully safeguard the existing tenants and the ongoing affordability of these units for the community.”

So is mine.

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