New Funding for Chicago Rental Subsidies

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Approximately 1,500 additional households will be assisted with new funding from the Low Income Housing Trust Fund, according to Ted Dygus, a media liaison for the Chicago Department of Housing.

Suzen Reiley, a disabled resident living in a Forest Park subsidized unit.
Photo by Michael Ibrahem

Dygus told me during a phone interview in March that the new funding, which is to be allotted locally from the State of Illinois’ program, is to provide annual subsidies to reduce rents for a specified number of units in buildings so that the units are affordable to tenants with annual household incomes within 30 percent of area median income.

Now in its 18th year, the Low Income Housing Trust Fund is the largest locally funded rental subsidy program in the country, he said.

Rosanna Marquez, President of the Eleanor Foundation.
Photo by Michael Ibrahem

Two years ago, the State of Illinois passed legislation creating the Illinois Rental Housing Support Program that was modeled after one already in operation here in the City of Chicago. The state program provides funding for rental assistance to very low-income families through a $10 surcharge on the recording fee for real estate transactions.

From the revenues collected, 90 percent goes to the local body that administers the program. The City of Chicago has designated the Chicago Low-Income Housing Trust Fund as the agency to administer the rental subsidy program.

Later that month, Molly Sullivan, director of communications and Freedom of Information inquiries for the Department of Housing, said during a phone interview that the Trust Fund also receives $7.5 million from the City of Chicago to support the program.

Sullivan said the Trust Fund began soliciting applications from landlords in late 2006 and received more than 1,300 applications. Then she explained the application process.

She said the applications are first reviewed by the Trust Fund board to determine if they meet program priorities, including providing housing for large families, the disabled and/or the homeless. Once applications are approved, the units are inspected.

Next an agreement is sent to the landlord. Landlords are then responsible for finding income-qualified tenants.

This spring, 154 new landlords were approved, bringing the current total of landlords involved in the program to 470. Landlords are made aware of the program via news releases, daily and community newspapers, announcements at the Trust Fund’s annual meeting and on the Trust Fund’s website. The landlords chosen represent 43 Wards and 60 community areas, according to Sullivan.

She added that tenants can apply to the program only through referral. Organizations such as Access Living, Chicago Coalition for the Homeless and the Spanish Coalition for Housing refer individuals in need of assistance to the Low Income Housing Trust Fund.

Julie Dworkin, a passionate housing activist, described the Low Income Housing Trust Fund as doing a “pretty good job.”

But during our phone interview in March, Dworkin also expressed a desire to see more direct tenant accessibility to the program for the people who need it the most.

Suzen Reiley, a disabled resident currently living in a Forest Park subsidized housing unit, told me during an interview that when she went to the Progressive Center on West Madison Street, she was told that median rents in the Chicago and surrounding area are at $785 monthly.

This figure represents 135 percent of Reiley’s monthly Supplemental Security Income (SSI) benefits. With the Trust Fund rental subsidy, however, Reiley only pays 30 percent of her income towards rent.

Bob Palmer, policy director at Housing Action Illinois, broke down for me how really bad it can be for people living on a fixed income during our March phone interview.

“Monthly Supplemental Security Income (SSI) payments for an individual are $603 in Illinois. If SSI represents an individual’s sole source of income, $181 in monthly rent is affordable, while the fair market rent, FMR, for a one-bedroom is $721 [in Illinois].

A unit is considered affordable if it costs no more than 30 percent of the renter’s income. The FMR in Chicago metro for a one-bedroom is $832, so the gap is even bigger,” Palmer said.

The National Low-Income Housing Coalition’s (NLIHC) study, “Out of Reach,” offers some other significant figures. The study states that “In Cook County, a minimum wage worker earns an hourly wage of $6.50. In order to afford the FMR (Fair Market Rent) for a two-bedroom apartment, a minimum wage earner must work 111 hours per week, 52 weeks per year. Or, a household must include 2.8 minimum wage earner(s) working 40 hours per week year-round in order to make the two-bedroom FMR affordable.”

Additionally, statistics in the study show how in Cook County, including Chicago, the estimated average wage for a renter is $16.05 an hour. In order to afford the FMR for a two-bedroom apartment at this wage, a renter must work 45 hours per week, 52 weeks per year. Or, working 40 hours per week year-round, a household must include 1.1 workers earning the mean renter wage in order to make the two-bedroom FMR affordable.

On Friday, March 28, I attended a conference called “Keeping a roof over their heads: Low-income working women and affordable housing,” where Rosanna Marquez, President of the Eleanor Foundation spoke of the wonderful things being accomplished by the Housing Choice Voucher Program.

She commented that one of their programs was seeing a 100% success rate with zero foreclosures on homes purchased through their Home Ownership Program.

Betty Harris, another participant at the conference, suggested a turn away with the emphasis on procuring rental places for low-income people. In Harris’ opinion, there need to be more groups focused on assisting low-income people by encouraging them to pursue home ownership.

“This needs to become a new trend where activists may try to build pride of self and pride in America, where not only economics keep some people from experiencing the American dream, but ignorance, or lack of knowledge of how the ‘system’ actually works, and how that lack of knowing what our options are has often kept both women and minorities down,” she said.

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