$5M loan fund created to help owners of South Shore condos, co-ops pay for maintenance and repairs
Assistant Housing Commissioner Will Edwards said the goal is to “enable long-time homeowners, many of them older on fixed incomes, to remain in affordable housing and remain in their homes and age in place.”
Since the day she took office in 1999, Ald. Leslie Hairston (5th) has been trying to find a way to help condominium and co-op owners defray the cost of maintenance and repairs.
On Tuesday, Hairston’s 23-year-long crusade finally hit pay dirt, thanks to an innovative pilot program concentrated in South Shore that could ultimately be a model for preserving vulnerable aging buildings citywide.
A City Council committee authorized the Chicago Department of Housing to dole out $5 million worth of grants to owner-occupants of condominium and co-op buildings and “low-interest, long-term loan/grant products” to homeowner associations.
The loans and grants would be issued by the Chicago Community Loan Fund in conjunction with the city’s Troubled Buildings Initiative. The fund is bankrolled by steep fees paid by developers to avoid building affordable units in their residential projects.
Assistant Housing Commissioner Will Edwards said the fund was created to “rehabilitate and stabilize distressed co-op and condo buildings” beginning in South Shore — and, ultimately, citywide.
Grants and loans of to $50,000 per unit would be made available, but only in buildings where:
• A majority of residents are owner-occupants and at least half of the units are appraised as “affordable.”
• At least 25% of the residents have lived in the building for at least 10 years or the building has so many code violations, it is viewed as “distressed.”
• Residents earn no more than 120% of the area median income. That’s roughly $88,000 for an individual and $125,000 for a family of four.
“The goal is to enable long-time homeowners, many of them older on fixed incomes, to remain in affordable housing and remain in their homes and age in place,” Edwards told the Housing Committee.
“Shared ownership buildings” often cannot afford major repairs, Edwards said. They often have “occupancy issues” and difficulty accessing credit or raising assessment fees high enough to bankroll those maintenance projects.
“In many cases, these additional fees are well beyond the ability of the current occupancy to pay. Especially when they’re on fixed incomes. These fixed income seniors who pay mortgages just can’t quite honestly afford the exorbitant special assessments. This is really a play to preserve home ownership,” Edwards said.
“Thirty-plus-year-old buildings with water, façade and concrete damage use reserves for emergency patchwork repairs, code violations. In many cases, we’re seeing these buildings pop up on our Troubled Building Initiatives. And this is one of the tools we’re hoping to use to address this problem.”
Getting banks on board is the long-term goal and the “heavy lift,” Edwards said.
“This is really a drop in the bucket. This is our attempt to see if we can solve some of these problems by supporting it and creating a concept or example that we can have banks work with us on,” he said.
Housing Committee Chairman Harry Osterman (48th) questioned how willing banks would be to work with the city to help distressed condos and co-ops “given their poor history of lending in communities on the South and West sides.”
Hairston acknowledged her quest to confront the problem posed by deferred maintenance and city-mandated life safety repairs has dragged on 20 years.
“In the areas between 67th, 71st, South Jeffery and South Shore Drive, people were coming in, making the improvements and buying the buildings and condos and challenging people to stay in their units,” Hairston said.
“Over the course of years, I’ve had condos that were unable to keep up with the city’s life safety evaluation or anything else because the assessments in order to do these programs were so high, most of these people could not afford it and have had to have buildings condemned.”
Plenty of programs are available, but are not “geared toward, condos, co-ops or people on fixed incomes,” Hairston said.
“The cost of maintaining a building goes up. But if you’re on a fixed income, [your income] doesn’t. These are people that have been in the community for 50 years or more,” the alderperson said.
“This is just but one piece of the puzzle. This is not something that is comprehensive to the whole community. We are addressing a specific issue that my constituents have told me that they need help in.”
In a press release issued by the city on the day the loan program was introduced, South Shore was described as one of Chicago’s “most densely-populated” communities with residents lured by the neighborhood’s proximity to Lake Michigan, Hyde Park, the University of Chicago and the Museum of Science and Industry. It’s also close to the site of the Obama Presidential Center in Jackson Park.
“However, a significant number of African American homeowners in the area residing in condominiums are at risk of conversion to high-cost units due to owners’ inability to pay for deferred maintenance or secure loans with longer terms than the traditional five to seven years,” the release stated.