CREATING INNOVATIVE HOMEOWNERSHIP PROGRAMS

April 7, 2001

Chicago Defender

New housing plan for moderate income residents

Strausberg, Chinta

New housing plan for moderate income residents

Mayor Daley's new affordable housing plan unveiled Tuesday caught the eye and interest of several Black aldermen, who have asked the developer to come to their wards so their residents won't be priced out of the community.

His new program, dubbed the Purchase Price Assistance Plan, helps those with moderate incomes buy homes in market-rate developments like the one at 4541-43 N. Malden St. located in Ald. Helen Shiller's (46th) Ward.

She created the plan to keep longtime residents in her ward. Without the program, she said gentrification would drive them away.

Joining Daley at a press conference were Alds. Arenda Troutman (20th), Shiller, Ted Matlak (32nd), Emma Mitts (37th), Eugene C. Schulter (47th), Housing Commissioner Jack Markowski, Dan Chambers, president, Chambers Construction and Development, Kathy Bates, Rogers Park Community Development Council and others.

The two eight-flat development was built by Chambers, who said he was comfortable enough to set aside 10 percent of the units for moderate-income residents.

Admitting he'll take a loss for doing that, Chambers said it would be worth the sacrifice to help provide housing for those who live in the community but would have had to move due to regentrification and escalating rental and homeownership costs.

Daley said the plan helps moderate-income people buy homes in developments like the one on Malden Street, "which would otherwise be outside their financial reach.

"When we're reviewing plans for a development of condos or single-family homes, the city will encourage developers to make a few units affordable for people making less than 120 percent of the median income.

"Right now, that means a family of four would have to make less than $81,480 to be eligible for assistance.

The buyer would go to a private lender to get the maximum mortgage he qualifies for based on his income and assets," Daley said.

"Then, the city would provide a subsidy of up to $40,000 to cover the difference between the purchase price and the amount of financing the buyer can put together on his own."

Daley said the assistance would be in the form of an interest-free, deferred loan.

However, he explained: "If the property is sold or refinanced within 10 years, the city can recoup some or all of the subsidy.

"That's a safeguard to keep the buyer from immediately selling the property and pocketing the subsidy."

He said the Purchase Price Assistance program is similar to the New Homes for Chicago program began in 1990 but with one big difference.

"New Homes for Chicago normally subsidizes all the homes in a development.

The Purchase Price Assistance program subsidizes some of the units in a development in an effort to attract moderate income families into upscale developments in rapidly improving neighborhoods."

"People are paying $300,000 to live in Woodlawn and Washington Park, but with this program, we'll be able to stabilize people who live in my community but who would be forced to move due to gentrification," Troutman said.

Article Copyright Sengstacke Enterprises, Inc.