Chicago will spend $10 million next year to create 200 residential units for homeless youth and 520 more for low-income families in gentrifying neighborhoods, top mayoral aides said Tuesday.
Mayor Lori Lightfoot campaigned on a promise to raise the real estate transfer tax on high-end home sales and use the $100 million in annual revenue to reduce homelessness and chip away at Chicago’s 120,000-unit shortage of affordable units.
Compared to that lofty promise to create a “dedicated revenue stream,” a $10 million commitment in the mayor’s 2020 budget sounds like a drop in the bucket.
But it’s apparently the best the mayor can do as she struggles to close an $838 million budget gap. If the Illinois General Assembly authorizes the graduated real estate transfer tax, most of that money will be used to close the gap, avoiding a dreaded property tax increase.
“What we’re focused on with this announcement is what we can do for this year,” said Housing Commissioner Marisa Novara.
“What we can do for this year is the $5 million to address youth homelessness and $5 million for our lowest-income renters. I would stress [that] this is a down payment from an administration that very much intends to build from here. This is being pushed by a mayor who is compelled by a fundamental belief in housing people with dignity.”
The “Bring Chicago Home” Coalition was not appeased.
In a statement, the coalition noted Chicago ranks “near the bottom of major U.S. cities” in spending to reduce homelessness and Lightfoot’s $10 million would “do nothing to alter that dismal status.”
“Despite campaigning on a promise to dramatically increase funding for Chicagoans experiencing homelessness, Mayor Lori Lightfoot’s inaugural budget … would perpetuate a severe shortage of aid for the more than 86,000 city residents who lack housing,” the statement said.
“As Chicago’s massive homeless population braces for another winter, this is no time to leave them out in the cold financially.”
With homeless students becoming an issue at the bargaining table in the teachers strike, half the money would be used to house more than 200 young people experiencing homelessness or “housing instability” through a $5 million contribution to the so-called Flexible Housing Pool.
The remaining $5 million would be a corporate fund contribution to the city’s Low-Income Housing Trust Fund.
That money would be used to create 520 rental units in gentrifying Chicago neighborhoods for low-income renters earning no more than 30 percent of the average median income. That’s roughly $25,000-a-year for a family of four.
“The Low-Income Trust Fund … administers rental subsidies to landlords and the subsidy lives with the unit. If someone leaves the unit, the subsidy stays with the unit,” Novara said.
“It reaches our households that are the hardest to house because they need the deepest levels of subsidy.”
Asked where those 520 new affordable units would be built, Novara talked about the Housing Department’s history of collaborating with the trust fund “to achieve deeper levels of affordability” in specific projects.
“Our goal with this new pot of funds would be to collaborate with the trust fund in this way helping to identify opportunities in gentrifying areas and in areas where, for instance, [Affordable Requirements Ordinance] units are being generated,” she said.
“These are some of the things we intend to partner with the trust fund on to make sure we’re helping them with their goal of getting more trust fund units in parts of the city where they’re not well represented right now.”
More than 16,450 Chicago Public Schools students were homeless last year, half concentrated in 10 wards on the South and West sides, underscoring the need for a “dedicated revenue stream” to combat the problem.
Last month, homeless advocates and their City Council allies shined the light on student homelessness to keep the heat on Lightfoot to honor her campaign promise.
Ald. Walter Burnett (27th), who grew up at Cabrini-Green, noted on that day that the real estate transfer tax has become a catch-all solution for several problems, including pensions and replacing lead water pipes. But, he argued, homeless advocates were first in line.
“We came up with the idea. … Give us a piece of it. ... Make homelessness a priority,” Burnett said.
Burnett acknowledged the estimated $838 million shortfall is the largest in recent Chicago history. Still, he’s demanding a chunk of any transfer tax revenue.
How big?
“As big as we can get,” he said.
