Chicago Tribune: Chicago aldermen pass SRO preservation law

Editor’s Note: Led by ONE Northside, CCH partnered on Chicago For All to advocate for the SRO preservation ordinance.

By Mary Ellen Podmolik, Chicago Tribune reporter

Owners of single-room-occupancy hotels in Chicago will not be able to so easily evict residents and convert their properties to market-rate apartments, under an ordinance approved Wednesday by the Chicago City Council.

By a vote of 47-2, aldermen approved the Single-Room Occupancy Preservation Ordinance to help veterans, students and city residents down on their luck who might otherwise find themselves homeless.

Mayor Rahm Emanuel called the ordinance, crafted by City Hall, aldermen and housing advocates, a “down payment” on the city’s five-year plan to preserve 41,000 units of affordable housing in the city.

“If you come to the city of Chicago, you live in the city of Chicago, you don’t live below Lower Wacker,” Emanuel said at a news conference with housing groups. “You have a roof. You have a place, your home, and not on Lower Wacker.”

More changes may be coming. The city, housing groups and developers continue to work on potential revisions to the city’s 10-year-old Affordable Requirements Ordinance, which gives residential developers whose projects fall under the law the option of either including affordable units in their buildings or paying an in-lieu fee. There have been discussions for months of raising that fee.

“It’s all about enhancing the ARO,” said Ald. Walter Burnett Jr., 27th, a member of the ARO task force. “It’s all about making it better. It’s all about getting more affordable housing.”

“We have to stop the bleeding,” said Ed Shurna, executive director of the Chicago Coalition for the Homeless, after the meeting. “We have to stop demolishing housing that’s affordable, we have to do more than that. We have to build housing that is affordable.”

The SRO preservation law requires building owners who want to sell their properties to take one of three routes to dispose of them. They can negotiate in good faith for at least 180 days to try to find a buyer who would maintain the building’s affordable status for 15 years. If that falls through, the owner has 120 days to sell the building to any buyer, and if no sale occurs, the owner must again try to sell the building to an owner who would maintain it as affordable.

Or, an owner can bypass that entire process by depositing into an SRO preservation fund a sum that amounts to $20,000 for each unit in the building.

Displaced tenants who lived in a building for at least 32 consecutive days would receive $2,000 to $8,600 in one-time relocation assistance, depending on the circumstances. A tenant who has to move because of unsafe building conditions would be entitled to $10,600 in relocation assistance.

The law also includes restrictions mandating how many units are reserved for people of different financial means.

Building owners do not consider the law much of a compromise.

“The numbers simply don’t work. Over time, it could be catastrophic,” said Eric Rubenstein, an owner of three SROs and executive director of the Single Room Housing Assistance Corp., which represents 75 properties.

The final version of the ordinance, however, offers more options for owners than earlier drafts and was repeatedly called a compromise during Wednesday’s council meeting. The law does not apply to building owners who had sought city permits before June 25 for demolition or conversion to market-rate housing.

The tweaked proposal also gives owners a year to formally close on the sale of a building. Also, the proposal more specifically states that preservation fees collected under the ordinance could be tapped to offer forgivable loans and other potential financing sources to rehab existing SROs or grants to prospective buyers who want to maintain the buildings as affordable housing.

Housing advocates estimate that Chicago has lost more than 2,200 rooms of housing for very low- and low-income residents during the past three years.

In July, the Chicago City Council passed a six-month moratorium on the issuance of any building permits tied to the conversion or demolition of SRO buildings while aldermen devised rules governing redevelopment of the buildings.

“Some of the pushback that we get around the city, including in my ward, about affordable housing, people generally just don’t like the idea of government-subsidized housing, and I think that conversation is fundamentally flawed,” said Ald. Ameya Pawar, 47th.

“If you own a home, you get a mortgage tax deduction. That is a government subsidy.”