By Fran Spielman, Chicago Sun-Times reporter
The City Council on Wednesday took a small, but still important step toward solving Chicago’s low-income housing crisis — by preserving the city’s dwindling supply of single-room-occupancy buildings.
The plan, hammered out by Mayor Rahm Emanuel’s office, makes it more costly for the owners to convert those SRO buildings — what has become the housing of last resort for low-income Chicagoan — to market-rate housing.
“In a lot of these SRO’s, there are a lot of veterans. Also in a lot of these SRO’s are a lot of students who go to a lot of our colleges throughout the city. There’s also a lot of disabled people and a lot of senior citizens who didn’t work and get a pension, but need an affordable place to stay,” said Ald. Walter Burnett (27th), chief sponsor.
Burnett applauded the mayor for crafting a compromise that will preserve those SRO’s that can be saved and, “if they are torn down, that a pot of money is gonna be in place to help produce more housing to replace them.”
Emanuel noted that “a lot of people doubted that we would use the moratorium” on the sale of SRO’s imposed earlier this year. They thought it was more of a stalling action. Instead, the mayor said he honored his promise to craft a reasoned compromise.
“This is all a piece of an overall fabric to make sure those who are less fortunate,” have an affordable place to live, the mayor said, agreeing with aldermen who hope Wednesday’s vote will set the stage for approval of a Chicago-only increase in the minimum wage.
The ordinance approved Wednesday has been watered down to appease building owners and give them greater flexibility.
In spite of those changes, SRO owners have argued that the financial burden they are being forced to bear is still too great.
That’s because it would prevent them from immediately selling their properties and require them to contribute to an SRO preservation fund — at a rate of $20,000 per unit — to avoid any strings attached by the city.
Owners dead-set on selling would specifically be required to spend at least six months searching for a buyer who is committed to maintaining affordable housing for the next fifteen years.
If the deal falls through, the clock would start again on a four-month period where the SRO owners could sell to any buyer. If there’s still no deal, the SRO owner would be required to try again to find a buyer committed to maintain affordable housing.
In addition, SRO owners would be required to provide displaced tenants who have lived in the building for at least 32 straight days with one-time relocation assistance.
The compensation would range from $2,000 to $8,600 for most and up to $10,600 for those tenants forced to move because of unsafe conditions.
“It’s unfair for SRO owners to be singled out with special burdens for what is a community-wide [problem]…This would have a better result if we were to start by figuring out how to fund these kinds of housing choices in a general way,” Lawrence Adelson, an attorney representing an SRO owner, told the City Council’s Housing Committee earlier this week.
Adelson didn’t miss a beat when Ald. Bob Fioretti (2nd), a mayoral challenger, asked why the ordinance that has Emanuel’s formidable support could be “constitutionally impaired” under both state and federal law.
“First of all, you delay the sale. Those same sale and displacement allowance conditions also apply to your buyer in the event that your buyer continues to be an SRO. And that’s likely to depress the price,” Adelson said.
Julie Dworkin, director of policy for the Chicago Coalition for the Homeless, countered that aldermen have struck the appropriate balance between upholding the rights of SRO owners to do what they want with their properties and the pressing need to preserve the dwindling supply of SRO units.
In 1973, Chicago had 53,000 units of SRO housing, Dworkin said. Today, it’s down to just 6,000.
A survey of SRO buildings conducted by the coalition last year showed that two-thirds of SRO residents are older than 50. Nearly half suffer from mental or physical disabilities. And roughly 25 percent are military veterans, Dworkin said.
“Nearly half of those we surveyed reported that they would be homeless if they lost their current housing. Another 15 percent said they did not know where they would go,” she said.
Dworkin noted that “Chicago’s Plan 2.0 to end homelessness” unveiled by the mayor in 2012 projected that Chicago needs at least 3,500 units of affordable housing for single adults just to meet the needs of those already experiencing homeless and that fewer than 200 units have been created since then.
She further noted that Chicago’s network of emergency shelters has been operating over-capacity this summer and fall with an average of 70 families-a-night sleeping at an overflow facility.
Meanwhile, more than 17,000 homeless households are waiting to be placed in permanent housing.
“Our city has an obligation to not move backwards when it comes to affordable housing resources,” Dworkin said.
“We’ve heard the concerns of owners. We understand that they have provided this source of affordable housing without city support for years. [But], with this ordinance, the city will now be establishing dedicated funds to support owners and buyers who want to keep the buildings affordable….[It] will go a long way toward preserving this housing. It will ensure that owners are supported in maintaining their buildings and fairly compensated if they wish to sell them.”