For 1,037 Chicago families, the future all depends on a relatively
small, obscure amendment passing through the U.S Senate. Without it, they
may just end up without a place to live, uprooted from the communities
where they've lived for years, because of a short-sighted law passed 40
years ago.
They thought that amendment was going to
pass--helping them avoid rent increases of 40 percent or more in the
coming year. But because of politics, that short-sighted law might never
get a long-term fix, and those families may end up out in the cold
after the holidays.
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The law is called the Below-Market Interest Rate program, and it was one of Congress' first forays into affordable housing. Here's how it worked: Someone bought a building, and in return for keeping that building affordable for 40 years, the government subsidized the interest on the mortgage. Sometimes, Uncle Sam actually granted the mortgage himself, and sometimes, he just paid a good portion of the interest.
It passed in the '60s, back when the year 2000 brought up mental images of space suits and hover craft. We'd all be living on Mars by then, so affordable housing wouldn't be a problem, right? But here we are, 40 years later, with the government having paid billions into this system and ending up with little to show for it.
Many of these buildings are prime real estate. Owners are itching to raise the rents and make more money, pushing out many long-time residents who were only able to stay in the neighborhood because their own rent stayed affordable.
Take 510 W. Belmont Ave. Located in the heart of Lakeview, residents there pay $400 to $600 less per month than the average neighborhood tenants. To make their rent affordable, residents would have to move to a neighborhood that probably has fewer stores and jobs, lousy transportation, and poorer schools. On top of that, they don't want to leave their home.
"I raised my family here and I can't imagine having to uproot and leave my support system because of politicians putting politics over the people," said Teresa Lopez.
Lopez and other tenants protested outside of U.S. Sen. Mark Kirk's office yesterday, urging him and his colleagues to pass an amendment already passed by the U.S. House of Representatives that would fix this situation. The amendment, attached to the 2011 budget bill, would give these tenants a Section 8 voucher when the program expires for their buildings, allowing them to move to an affordable unit or even stay where they are.
But Kirk told them he couldn't support it for political reasons. "He may be called upon by the
Republican Party to oppose the passage of any spending measure this year," the group said.
When we talk about the deficit, we always hear about how we shouldn't be leaving debt for our children and grandchildren. With housing law, we can make the same kinds of mistakes. Forty years may have seemed like an eternity in the '60s, but now, up to 237,000 affordable units nationwide will be expiring by 2013. Today, we're making the same kinds of deals--99 year leases to private entities for public housing, perhaps hoping that in 99 years, our great-grandchildren will have figured it out.
But activists for these buildings are asking: If we're going to spend billions in public money, shouldn't we have something to show for it in the long run?
And tenants are wondering too. Congress may have been short-sighted 40 years ago, but that doesn't seem to have changed much today. Trouble is, their future--today, tomorrow and next year--depends on us thinking ahead.
Filed under: Government and Politics, Housing
Tags: affordable housing, below market interest rate, BMIR, housing, housing crisis, Lakeview, Mark Kirk
I think most people would view a 40-year subsidy as far-sighted and generous, and questioning it as myopic.
Here's another clue for you - some people think their future depends on their own planning.
I doubt any family has lived there for forty years, Joe.
But you're right about planning - why would we spend millions on a public investment and have nothing to show for it? That is poor planning.