2009-2013 AFFORDABLE HOUSING PLAN Keeping Chicago’s neighborhoods affordable. 2010 First Quarter Progress Report January-March City of Chicago Richard M. Daley Mayor Letter FroM tHe CoMMissioner We are pleased to submit the 2010 First Quarter Progress report, which presents the Department of Community Development’s progress on the goals set forth in the City’s fourth Affordable Housing Plan, 2009-2013. With this report, we are also presenting estimates of production for 2010, the second year of our cur- rent five-year plan. the Department of Community Development estimates that it will utilize more than $407 million to assist 9,523 units of housing this year. this breaks down into the following categories: • To create and preserve affordable rental units: $306,288,301 to assist 6,387 units • To promote and support homeownership: $81,204,190 million to assist 1,186 units • To improve and preserve homes: $19,210,688 to assist 1,950 units Also included in the yearly estimate is more than $13 million for other initiatives, including delegate agency programs, and for overall administration of Departments. in this report, we have included a guide to reading the production tables found in the Appendix. the guide is organized by the three main categories of work as outlined above, and gives a brief descrip- tion of each program along with information about funding source and unit count methodology. We included this guide to make the report easier to use and understand. this quarter the Department approved financing for five multifamily developments. Also during the first quarter, the Department hosted one borrower outreach event and one fix your mortgage event, providing opportunities for over 730 Chicago homeowners to work with lenders and counselors to assist with foreclosure prevention. While economic conditions have presented the department with considerable challenges, with the help and cooperation of our many partners, and the recent availability of federal stimulus funding, we have been able to successfully achieve many of our annual goals under our three main categories of work: Create and Preserve Affordable rental, Promote and support of Homeownership, and improve and Preserve Homes. As always, we would like to thank all our partners for their continued support and cooperation. With their efforts we continue to progress in our goals to create and preserve affordable housing for Chicago residents. Christine raguso ellen K. sahli Acting Commissioner First Deputy Commissioner Affordable Housing Plan 2009–2013 Quarter ending March 2010 tABLe oF Contents introDuCtion PAGe Creation and Preservation of Affordable rental units 2 2 user’s Guide 6 Multi-Family rehab and new Construction 12 updates on Previously reported Developments Promotion and Support of Homeownership 16 16 user’s Guide 20 Borrower outreach 21 Fix Your Mortgage improvement and Preservation of Homes 22 22 user’s Guide Policy and Legislative Affairs 24 APPenDiCes 1. estimates of Production 9. Low-Income Housing Tax Credit Commitments/ 2. Commitments and Production Comparison to Plan 1602 Exchange 3. units Accessing Multiple Benefits 10. Multifamily Mortgage revenue Bond 4. summary of Multifamily Developments Commitments • Oakwood Terrace Medical Center 11. Multifamily Land Commitments • Hancock House 12. Chicago Low-income Housing trust Fund • Hairpin Lofts Commitments • Harold Washington Apartments/ 850 W. Eastwood 13. troubled Buildings initiative (Multi-family) • Bettendorf Place SRO 14. tiF neighborhood improvement Program 5. Loan Closings report (single-family) 6. Multifamily Loan Commitments/Tax Credit 15. Historic Chicago Bungalow initiative Assistance Program 16. Neighborhood Lending Program 7. Multifamily MAui Commitments 17. neighborhood stabilization Program 8. Multifamily TIF Commitments 19. Density Bonus Commitments 20. CHA Plan for transformation Commitments reFerenCe 1. Chicago Metropolitan Area Median incomes 2. City of Chicago Maximum Affordable Monthly rents Affordable Housing Plan 2009–2013 Quarter ending March 2010 introDuCtion this document is the 2010 First Quarter Progress report on the Chicago Department of Community Development’s Affordable Housing Plan, 2009–2013. For 2010, DCD projected commitments over $407 million to support 9,523 units of housing. through the first quarter of 2010, the Department committed over $112 million in funds to support more than 4,000 units, which represents 44% of the 2010 unit goal and 28% of the 2010 resource allocation goal. Affordable Housing Plan 2009–2013 1 Quarter ending March 2010 CreAtion AnD PreserVAtion oF AFForDABLe rentAL units In 2010, the Department has a goal to commit over $306 million to support more than 6,300 units of affordable rental housing using loans for new construction or rehab, and rental subsidies. through the first quarter of 2010, DCD committed over $102 million in resources to support over 3,700 units. these numbers represent 59% of the 2010 multifamily unit goal and 33% of the 2010 multifamily resource allocation goal. user’s Guide: Create and Preserve Affordable rental units Listed below is a description of the main programs to support the Department’s efforts to create and preserve affordable rental units, along with an explanation of how we count financial commitments and units assisted through these programs. Program Description Funding Source Reporting Protocols (What gets counted and when?) Multifamily Loans Supports the construction or HOME, Financial commitments and units rehab of developments that CDBG, and assisted are counted upon City will provide long term local funds Council approval of the development. affordable rental units. Loan funds can be used in conjunction with MAUI, LIHTCs, DTCs, fee waivers, TIF, and revenue bonds. Tax Credit Supports the construction or United States Financial commitments and units Exchange Program rehab of developments that Treasury assisted are counted upon City (TCAP) will provide long term Council approval of the development. affordable rental units. Section1602 Tax Supports the construction or The Exchange Financial commitments and units Credit Exchange rehab of developments that of LIHTC’s for assisted are counted upon City Program will provide long term a $.80 on the Council approval of the development. affordable rental units. dollar Multi-year Provides up-front financing State of Illinois Financial commitments and units Affordability to developments in exchange Rental Subsidy assisted are counted upon Chicago Through Up-front for long-term affordability for Program, Low Income Housing Trust Fund Investments units that serve households Downtown board approval. (MAUI) making no more than 30% of Density Bonus the area median income. funds Affordable Housing Plan 2009–2013 2 Quarter ending March 2010 Program Description Funding Source Reporting Protocols (What gets counted and when?) TIF Subsidies Provides Tax Increment TIF funds Financial commitments and units Financing (TIF) subsidies to assisted are counted upon City developers who are constructing Council approval. or rehabbing affordable multifamily units. Low Income Federal income tax credits to Federal income If a development is receiving other Housing Tax support the construction and tax credit City assistance, such as a loan or Credit equity preservation of multifamily City-owned land, then the financial affordable housing. commitments and units assisted are counted upon City Council approval. If no other City assistance is being provided, the equity and units assisted are counted upon allocation of the Low Income Housing Tax Credits, which by itself does not require City Council approval. Financial com- mitment reported is the value of the equity generated by the LIHTCs. Multifamily Program provides bond City tax-exempt Financial commitments and units Mortgage Revenue financing for developers who bonding authority assisted are counted upon City Bonds build or rehabilitate large Council approval. housing developments for low- and moderate-income renters. City Land Donates City-owned land to NA Financial commitments and units multifamily developments in assisted are counted upon City exchange for long-term Council approval. Financial affordability. commitment is the value of the land write-down. City Fee Waivers DCD waives certain fees NA Financial commitments and units associated with the Depart- assisted are counted upon City ments of Building, Water Council approval. and Transportation for the construction of affordable multifamily housing. Affordable Housing Plan 2009–2013 3 Quarter ending March 2010 Program Description Funding Source Reporting Protocols (What gets counted and when?) Donations Tax A $.50 State of Illinois income State of Illinois DCD reports the value of the donation Credit donations/ tax credit for every $1 that is income tax and/or any equity generated by the sale equity (DTCs, also donated to an eligible affordable credit of the tax credits. If the development known as Illinois housing development. DCD al- is receiving other City assistance, such Affordable locates 24.5% of the amount as a loan or City-owned land, then Housing Tax of credits authorized the financial commitments and units Credits) by the State. assisted are counted upon City Council approval. If no other City assistance is being provided, the donation or equity and units assisted are counted upon allocation of the tax credits, which by itself does not require City Council approval. MF Affordable Per City ordinance, Varies, includes Financial commitments and units Requirements developments with more Tax Increment assisted are counted when the project Ordinance than10 units receiving City Financing (TIF) has met two criteria: 1) City Council zoning changes (including funds and land approval and 2) Sign-off by the planned developments in a purchased from Department of Community downtown zoning district) the City (even if Development. Value reported is the or additional financing must purchased at the amount of any City land write-down make 10-20% of units appraised value). or any TIF funds going to the affordable. development. If units are receiving assistance through another DCD program, such as New Homes for Chicago, they are not counted under ARO. Lawndale Provides grant funding for HUD Up-front If receiving loan funds from DCD, Restoration the redevelopment of the Grant units are counted upon City Council Redevelopment Lawndale Restoration and approval. If not, then units are counted Douglas Lawndale Project- at closing. The financial commitment based Section 8 reported is the value of HUD developments. Up-front Grants that the development is utilizing, if any. Some units may close without utilizing any HUD or DCD funds; these units are counted because DCD is responsible for the overall redevelopment of Lawndale Restoration and Douglas Lawndale. Affordable Housing Plan 2009–2013 4 Quarter ending March 2010 Program Description Funding Source Reporting Protocols (What gets counted and when?) Low-Income Provides rental subsidies to State of Illinois Financial commitment and units Housing Trust landlords for tenants whose Rental Subsidy assisted are counted when DCD has Fund Rental earnings do not exceed 30% of Program and a signed agreement with the land- Subsidy Program area median income. Corporate funds lord. Payments to landlords are made quarterly, but the annual financial commitment for each unit is reported in the first quarter of each year. As new landlord agreements are signed throughout the year, the additional financial commitments and units are reported. Supportive Provides rental subsidies and Federal Financial commitment and units Housing Program supportive services for Supportive assisted are counted when DCD has formerly homeless Housing Grant a signed agreement with the housing households. provider. Heat Receivership In cases where buildings do CDBG Units are counted when they enter not have functional heat and court ordered receivership. hot water, the City can initiate a process to appoint a receiver to make any necessary repairs and restore heat and hot water to tenants. Troubled Buildings With Community CDBG Units are counted the first time they Initiative Investment Corporation (CIC), are classified under one of the following the Department of Buildings, categories: under rehab, in receivership, the Department of Law, and or recovered. Units are not counted other City departments, DCD twice as they flow through the process. identifies problem For example, a building may first be buildings and designates counted when it undergoes rehab. receivers to manage When it is recovered, it is not counted deteriorating and troubled again. Financial commitment counted properties. CIC manages per receipt of invoices from CIC. properties on an interim basis, assesses the scope of work needed to preserve buildings, and makes loans to new owners to finance acquisition and rehabilitation. Affordable Housing Plan 2009–2013 5 Quarter ending March 2010 Program Description Funding Source Reporting Protocols (What gets counted and when?) Neighborhood The Neighborhood HUD MF NSP units are counted in two Stabilization Stabilization Program (NSP) Neighborhood categories. (1) When Mercy Portfo- Program provides for the purchase Stabilization lio Services acquires a property, the (Multifamily) and rehabilitation of vacant, Program grant number of units and acquisition cost are foreclosed homes in targeted funds recorded. (2) After the property is trans- areas. Mercy Portfolio ferred to a developer and rehab begins, Services is the City’s agent the estimated rehab cost of the units is under NSP and is responsible recorded. All units under rehabilitation for the acquisition and will be included in the double count, as disposition of eligible they were already included at the time properties. of initial acquisition. Multifamily TIF Provides grants to owners TIF funds Financial commitment and units Neighborhood multifamily buildings to assisted are counted when DCD Improvement make exterior improvements. receives an invoice from the Program Requires income-based rent administering non-profit (TIF-NIP) restrictions for 5 years. organization. Multifamily rehab and new Construction Oakwood Shores Terrace and Medical Center in February the Chicago City Council approved financing for the rehabilitation and construction of Oakwood Shores Terrace and Medical Center. This development will include 48 residential units, 36 of which will be affordable to households earning no more than 60% of Area Median Income (AMi). oakwood shores terrace and Medical Center, being developed by oakwood shores terrace Associates, L.P. senior Apts. inc., will be located at 3753 -3755 south Cottage Grove Ave. in the oakland Community of the 4th Ward. units at oakwood shores terrace and Medical Center will range from one to three bedrooms, including 36 affordable units, and an additional 12 units available for market rate renters. Rents for affordable units will range from $360 to $990 units depending on unit size. Affordable Housing Plan 2009–2013 6 Quarter ending March 2010 In addition to 48 mixed-income rental units, this development will also include an approxi- mately 14,000 square foot medical building operated by Mercy Hospital. this will provide much needed local family medical services to the community. Currently, Mercy Hospital plans to incorporate two internal medicine, one pediatric, and one OB/GYN suite into the facility. this clinic will be complimented by timeshare suites staffed by Mercy physicians providing specialty services and a space designed to provide community education. the second floor will contain approximately 14,000 square feet of additional medical suites. the project team is currently working with the university of Chicago to potentially provide Optometry/Ophthalmology services on this floor The total affordable housing project budget cost is $18,883,639.00, including a DCD HOME Loan in the amount of $2,085,814, Low Income Housing Tax Credits in the amount of $1,100,651 generating $7,923,896 in equity, City Land appraised at $959,000 and standard Multifamily Program Fee Waivers. the total costs for this development, includ- ing both commercial and residential components, is $23,537,443. Oakwood Shores will create 36 affordable units in the Oakland Community of the City’s 4th Ward. Hancock House Also in the first quarter, the City Council approved financing for the construction of Hancock House, a seven-story, brick and masonry building which will create 80 affordable, and 9 market rate, units for seniors. Hancock House, to be developed by Hancock House Limited Partnership, will be located at 12045 s. emerald Avenue in the West Pullman com- munity of the 34th Ward. unit sizes in Hancock House will range from studios to one-bedrooms, with affordability restrictions for the 80 units ranging from 15-60% AMI. Rents will range from $164 to $725 depending on units size and income qualification. Affordable Housing Plan 2009–2013 7 Quarter ending March 2010