City Council committee OKs loan fund to preserve single-room-occupancy buildings
Chicago’s remaining single-room-occupancy buildings, also known as SROs, offer a way to help some of Chicago’s most vulnerable residents, one city official said.
In 2014, Chicago was home to 81 single-room-occupancy buildings. Now, there are only 40 SROs that, as one official put it, “are helping folks get off the street.”
Now, the City Council’s Committee on Housing and Real Estate has taken a small but important step in an attempt to stop the bleeding.
Despite concerns it was too little, too late, alderpersons on Wednesday signed off on Mayor Lori Lightfoot’s plan to create a “Single Room Occupancy Preservation Loan Program” seeded by a $5 million sinking fund administered by the Chicago Investment Corporation.
To qualify for city loans, SRO developers first must obtain private loans covering at least half the amount they need. Construction financing would then “convert to a permanent, long-term mortgage,” with proceeds from the $5 million fund used to “cut the monthly mortgage payment in half,” officials said.
Assistant Housing Commissioner Esther Sorrell said the city “learned a lot from the pandemic” after relying heavily on SROs to “house a very vulnerable population.”
“In return, those owners relayed to us the issues that they were having with the city and the support that they needed in order to remain operational,” Sorrell said.
“We’ve lost 40 SRO buildings over the last few years. We don’t want to erode that number any more.”
Noting that “many” SRO owners keep rents “at a level that is attainable for people on very, very low income,” Sorrell said: “We want to be able to preserve that so they could continue offering a lower rent while we also continue to work on creating and rehabbing properties with other funds that we have in the department.”
Uptown Ald. James Cappleman (46th) said he would “reluctantly support” the $5 million loan fund, which will go before the full City Council next week.
But he voiced deep concern about using city loans to “assist SROs 250-square-feet in size” when city money could be used to “rehab studios and one-bedroom apartments for the very same cost.”
“I want a pilot project for my ward to do this very same thing. But I want it for studio and one-bedroom apartments, which would cost virtually the same and would allow people experiencing extreme poverty to remain in their home should they enter into a relationship or should they require someone to stay with them while they’re recovering from an illness,” Cappleman said.
“People living in SRO’s don’t have those kinds of options. And I believe those with a very, very low income deserve better. So I will reluctantly support it. but I’m not happy about it.”
Cappleman said he understands SROs are “for people who are at high-risk of becoming homeless.” But, he argued, many of those residents receive a Supplemental Security Income check, known as SSI, “or no income at all.”
“This ordinance still has that group of people paying 60% of their income for rent. … Those rents in these SROs are around $500 or $600 a month. And their SSI check is $840 a month. So it’s not realistic,” he said.
Housing Committee Chairman Harry Osterman (48th) said the ordinance was devised after housing advocates and SRO residents “demanded it.” Loans are desperately needed to make certain SRO residents don’t live “in squalor,” Osterman said.
“We’ve lost half of the SROs in our city since 2014. There are not a lot of new SROs being built. These are places that are helping folks get off the street, out of tents and living in homelessness. It’s important for all of us to really do what we can to help support them,” Osterman said.
“It’s a small amount of money. It should be more. But if we’re able to lift up and support some of the renovations that are needed to make these a little bit nicer for the residents who live there, it’s gonna be helpful to them and their quality of life.”
West Side Ald. Emma Mitts (37th) applauded the Department of Housing for, as she put it, “deciding, for the first time, that SROs matter.” She called it the “step above homelessness.”
“These owners cannot maintain [their buildings] because government wasn’t giving them any funding. The city wasn’t doing anything. And these buildings are sitting there deteriorating,” Mitts said.
“I really want to, at least, help provide some assistance to them. They’re struggling. But also, people in the building are struggling. I always say, if we can’t help the least [fortunate], who are we going to help? Yes, we can always do more. And I’m sure, as we continue to work on this issue, we will get there because we have to start. I’m grateful for you starting.”