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More housing assistance funds on deck; council targets Woodlawn gentrification, short-term rentals and tenants’ rights

by Sean Hemmersmeier

More housing assistance funds on deck; council targets Woodlawn gentrification, short-term rentals and tenants’ rights

Chicago Mayor Lori Lightfoot announced an expanded housing assistance grant program today, as well as a new online portal for those who have been negatively impacted by the economic fallout from the coronavirus pandemic.

“COVID-19 has laid bare and exacerbated the issue of housing insecurity, a core symptom of the crushing poverty and economic hardship that remains the reality for far too many Chicagoans,” said Lightfoot in a statement announcing the funds. “This … will ensure that our residents have the support they need to stay in their homes, stay safe and stay afloat during these uncertain times.” 

The $33 million of relief for renters and property owners comes from the federal CARES Act as well as local donors. Half of the funds will go to households earning under 15% of the area median income, with eligible applicants receiving up to six months of rental support. The new portal has an intake form with four questions designed to route those in need to the right program for help. Residents can also apply for help in person through August 10 at one of six community centers.

Property owners are also eligible for help; the housing department’s mortgage assistance program will give up to $3,300 directly to lenders to cover past-due payments, future payments, or both on owners’ behalves through local nonprofit Neighborhood Housing Services. Owner-occupant homeowners experiencing COVID-19-related financial hardship who earn up to 120% of the area median income and were up to date on their mortgage payments as of March 2020 are eligible, and the application period for this program will open Monday, August 3. 

“The first round of COVID-19 Housing Assistance showed us how deep the need is across all neighborhoods in Chicago,” said housing commissioner Marisa Novara. “We have been working to find additional resources to assist those financially impacted by the pandemic, and these new funds will go a long way in stabilizing the lives of residents during these challenging times.” 

Meanwhile, in their most recent meeting last week, the Chicago City Council introduced new ordinances concerning affordable housing, short-term rentals, gentrification and tenants’ rights.

Gentrification in Woodlawn

Ald. Jeanette Taylor (20th Ward) and Ald. Leslie Hairston (5th Ward) introduced the Woodland Housing Ordinance to protect current residents of the historic South Side neighborhood, which is expected to see a boom in interest once the Obama Presidential Center is completed in nearby Jackson Park.

“Since day one, our efforts have been focused on building economic growth and cultural enrichment in the Woodlawn community while also ensuring that every neighborhood resident is able to stay in their homes and share the transformative promise by the Obama Presidential Center,” said Mayor Lori Lightfoot in a statement after last week’s meeting.

The ordinance primarily focuses on funding programs that are designed to maintain and create affordable housing. The city announced it will take approximately $9.5 million to do so, and that it will rely on banks and private lenders for $5 million of that total. Most of the funding will go to already existing programs. This includes adding $1.5 million to the Preservation of Existing Affordable Rental program, which helps landlords refinance their property to keep rent affordable, and $1.52 million for the Woodlawn Loan Fund, which purchases and rehabilitates vacant units to create new affordable housing.

“This ordinance will go a long way in maintaining and developing a wide range of housing options for renters, homeowners and investors for our South Side neighborhoods,” said Hairston.

Another major change being proposed in this up-and-coming neighborhood is the Tenants Right of First Refusal pilot program. This would give tenants the right to form an association and find a not-for-profit housing developer to purchase their building if it’s being sold by their landlord.

Short-term rentals

Mayor Lightfoot also introduced an ordinance that will reform shared-housing industry regulations within the city with the Department of Business Affairs and Consumer Protection Commissioner Rosa Escareño. The ordinance will affect short-term rentals listed on sites such as Airbnb and Homeaway. The new regulations are meant to protect against “a few bad actors” in the house-sharing market and was not intended to harm major companies, according to Lightfoot.

Airbnb spokesperson Liz Debold Fusco said they’re working with the city on the new rules. “We appreciate Mayor Lightfoot’s continued partnership and look forward to working with the mayor’s office to simplify and modernize short-term rental rules for our host community,” she said.

In 2016, the city passed other measures to protect and maintain the communities in which short-term rentals are located. However, Lightfoot said the previous measures are no longer effective because the industry has changed. “By enhancing the city’s enforcement powers against bad actors and increasing regulatory oversight through BACP, we can further ensure this new and innovative industry remains safe for all of Chicago’s residents,” she said.

The new measures would give BACP more regulatory power over listings, because they require approval before the listing can be rented. Previously, listings that were going through the process could still be rented during appeals, which could go on for months. The ordinance also allows BACP to ban party-house listings as well as single-night reservations.

This ordinance also creates a tiered-fee structure for a shared-housing business license, where larger shared-housing hosts will pay bigger fees. What was once an across-the-board $10,000 annual fee will be broken up under the new rules. Those with fewer than 499 units would pay $5,000, intermediaries with 500 to 999 units would pay $7,500 and anyone with more than 1,000 units would pay $10,000. While this is meant to help smaller investors gain a foothold, the individual per-unit fee will increase from $60 to $125.

Tenants’ rights

Landlords will have to change their communication timeline when it comes to raising rent and ending leases. The notice period for telling tenants about such changes will be extended from 30 days to 120 for long-term renters. The 120-day period is one of the longest notice periods in the country, according to the mayor’s office. The Fair Notice ordinance passed in a 35-14 vote, with proponents arguing that increasing tenants’ rights will be vital to easing the housing crisis caused by COVID-19 and areas prone to gentrification.

The 120-day notice only applies to those who have rented the same property for three or more years. Renters who have resided in a property for anywhere from six months to three years will get a 60-day notice, and people who have rented for less than six months will still only get a 30-day advance warning.

“Thirty days is simply not long enough for the majority of Chicagoans who rent — including seniors, families, and people struggling to get by — to find a new and suitable apartment and to move without disruption or trauma,” said Ald. Harry Osterman (48th), chairman of the council’s Housing and Real Estate Committee. “By extending the notice period up to 120 days for long-term tenants, we are providing more stability and predictability for Chicago renters.”

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