|March 7, 2006||
Press Contact: Josh Schonwald|
University of Chicago, Community Investment Corporation create $10 million South Side affordable housing program
The University of Chicago and the Community Investment Corporation, a major nonprofit mortgage lender funded by 47 Chicago banks, have created a new $10 million program to promote neighborhood revitalization and affordable housing on Chicago’s South Side.
The University of Chicago/CIC program will help preserve affordable rental housing that is currently at risk of being torn down or converted into condominiums by providing financing for independent, hands-on developers to rehabilitate multifamily apartment buildings in neighborhoods near the University of Chicago, including Woodlawn, Washington Park, South Shore and the Quad Communities of Grand Boulevard, Kenwood, Oakland and Douglas. The program is expected to preserve approximately 190 housing units and is made possible because of a $1 million University of Chicago investment.
This new program is the latest in a series of initiatives the University has engaged in to support local communities on Chicago’s South Side. In addition to the $1 million loan to CIC, the University recently contributed $250,000 to the Local Initiatives Support Corporation for quality of life projects in Woodlawn, Washington Park and the Quad Communities. A portion of this grant will strengthen youth development and neighborhood beautification projects with $100,000 reserved for projects that support and maintain affordable housing. The University also expects to open its third charter school next fall in the Woodlawn neighborhood.
In addition to these steps, the University administers an employer-assisted housing program that provides grants to moderate income University employees so they can purchase homes in designated South Side neighborhoods. More than 100 University and University of Chicago Hospitals employees have closed on homes using this benefit, and more than 500 employees have received home-buyer counseling and hope to purchase a home in the near future.
“The University of Chicago is committed to the development and sustainability of vibrant, mixed-income, diverse communities on the mid-South Side of Chicago,” said Hank Webber, Vice President for Community and Government Affairs at the University of Chicago. “Ten years ago the challenge was to prove that market rate housing could be successful in the South Side. Now with markets well established in most neighborhoods we need to focus on affordable housing.”
To be approved for a loan in the new University of Chicago/CIC program, owners need to provide only 10 percent of the total project cost, instead of the more typical 20 percent required by most banks. CIC was able to create the new program and through it offer loans deemed risky by most financial organizations because of the $1 million University of Chicago investment, which is provided with no interest charge. The University will have no ownership interest in any of the units. Each multiunit loan financed with a University of Chicago second mortgage will carry with it an affordable housing restriction that requires units to be maintained as affordable housing throughout the life of the 10-year University of Chicago loan.
“When the University of Chicago contacted CIC and asked what one thing would most help stimulate increased rehab of affordable housing, I repeated what I had just heard from our loan officers: that lower cash equity requirements would help capable owners move more quickly to do added deals,” said John Pritscher, president of the Community Investment Corporation.
Chicago Fifth Ward Alderman Leslie A. Hairston recently introduced an ordinance to the City Council to make owners of substandard housing improve their properties or face fines. In her South Shore ward, Hairston said, there is a need for decent affordable housing, and the University of Chicago/CIC loan program is “the carrot that goes with the legal stick.”
“It provides the means for those property owners that want to rehab but can’t afford to make the repairs or don’t have the information resources,” Hairston said. “We couldn’t be happier that the University of Chicago and the Community Investment Corporation have made this commitment to good quality affordable housing.”
The University of Chicago already provides loan guarantees to area non-profit housing organizations enabling them to raise the capital necessary to construct and preserve affordable housing units in North Kenwood, Oakland and Woodlawn.
“I applaud the efforts of the University to maintain a stable rental housing base in the community,” said 20th Ward Alderman Arenda Troutman. The communities of Woodlawn and Washington Park are of particular interest to developers who want to convert existing rental properties into condominiums that current residents and the working poor cannot afford, she said.
“The partnership between the University of Chicago and Community Investment Corporation recognizes that to continue to have a diverse population, there must be affordable rental housing,” Troutman said.
The new University of Chicago/CIC loan program will be managed entirely by CIC. Potential developers who either own multifamily buildings requiring rehabilitation or are purchasing buildings between six and 50 units in these communities may call CIC at (312) 258-0070.
Other CIC services available to hands-on developers are construction assistance, property management training to give new landlords the tools they need to successfully handle their buildings, and a troubled buildings initiative which encourages developers to target the worst buildings in a neighborhood and rehabilitate them. Created in 1974, CIC has worked to rehabilitate more than 34,000 rental units and provide affordable housing for more than 110,000 Chicago-area residents. The loan default rate is less than 1 percent.
Fourth Ward Alderman Toni Preckwinkle also expressed appreciation for the new affordable housing program.
“I am grateful for the University’s past support for public safety and education initiatives in North Kenwood-Oakland,” Preckwinkle said. “And I’m also grateful for its most recent commitment to support affordable housing.”
Last modified at 01:46 PM CST on Tuesday, March 07, 2006.
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