FIGHTING FOR AFFORDABLE HOUSING

October 2, 1991

Chicago Tribune

PLANNED U.S. CUTS RAISING FEARS FOR AFFORDABLE HOUSING PROGRAM

Patrick T. Reardon, Urban affairs writer.

It was a sunny but cold morning late last month when more than 100 people gathered outside a dilapidated three-story apartment building at 849 W. Sunnyside Ave. in the gritty North Side neighborhood of Uptown.

They were there to celebrate. The building, after being empty for more than a decade, was to be renovated into 12 large apartments for low- and moderate-income families by Voice of the People, a local non-profit development group.

``This building,`` said Ald. Helen Shiller (46th), ``represents the beginning of a series of activities on this block, and the beginning of theend of the abandonment of these properties.``

But there was a bittersweet edge to the celebration.

Changes in federal housing laws have made such groundbreakings rare in recent years. And there are strong fears among affordable housing activists of a further cutback that could turn them into an endangered species.

On Wednesday, representatives from Chicago and cities across the nation are set to meet with U.S. Rep. Daniel Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee, in an effort to block that cutback.

In jeopardy is the low-income housing tax credit program, set to expire at the end of 1991. Twice before it has been extended for a year.

This time, however, ``there is real fear`` that the program may get caught in a congressional crossfire over the federal deficit and fail to win extension, said Douglas Guthrie, director of the National Equity Fund.

Although the program has widespread congressional support-81 senators and 268 House members have signed resolutions in its favor-it needs the backing of Rostenkowski if it is to survive, Guthrie said.

Stephen Schlickman, Chicago`s Washington lobbyist, said the tax credit ``is the city`s No. 1 tax priority`` in Congress because of its importance to affordable housing efforts.

``It is,`` Guthrie said, ``virtually the only deep financing mechanism left from the federal government.``

Since 1986, the tax credit has helped finance an estimated 316,128 units of low-income rental housing nationally, according to the National Association of Home Builders. And of all new or renovated low-income multifamily rental
units in the United States, 94 percent are produced with the program`s help, according to the National Council of State Housing Agencies.

In Chicago, tax credits were involved in nearly three of every four low-income units that also received city loans, said Steve Gladden, deputy housing commissioner.

For two decades, the city has been losing low-income apartments at an alarming rate because of demolition and abandonment, said George Stone, a former city housing official and now a consultant with the Chicago Rehab Network.

``We`re not keeping pace, and we`ll just fall further behind`` if the credits are eliminated, he said.

Stone estimated that the tax credits are responsible for 20 percent to 30 percent of the financing of affordable housing projects under way. Without the credits, the city`s housing funds would be stretched more thinly, and even fewer projects would be possible.

The National Equity Fund, the largest of its kind in the nation, operates as a middleman in the tax-credit program. Corporations give the fund money in exchange for the tax credits, and the fund then distributes the money to affordable housing projects in the form of equity.

For example, the fund has provided nearly $1.1 million in equity funding for the Voice of the People renovation project that involves renovating the building at 849 W. Sunnyside Ave. and one at 4130 N. Kenmore Ave.
Copyright 1991 Chicago Tribune Company