Affordable Multifamily Housing Lacking

Not only does the demand exceed supply, but soaring land values has made the average cost of producing a single rental unit--$150,000–-well above its value--about $60,000. In addition, much of the city's housing stock ranges from 50 to 100 years old, Markowski says, but units in the best locations are snapped up for condominium conversion while the worst are in areas continuing to see disinvestments.

"One of the hardest things is managing development costs," says Mike Juozaitis, assistant to the director for multifamily programs for the Illinois Housing Development Authority.

While existing programs such as Low Income Housing Tax Credits and Community Development Block Grants are crucial, Markowski says, more secondary financing is needed to bridge the supply gap. Meanwhile, the department, which applies for LIHTC money as "a 51st state," is seeking more HOME funds, adds assistant commissioner Erika Poethig.

"Affordable housing as well as education is at the very top of the mayor's agenda," Markowksi says.

However, both Juozaitis and Poethig have a long list of applicants when money for programs such as multifamily revenue bonds becomes available. Juozaitis says that program was oversubscribed by three times the amount of money available while Poethig says the city received 44 applications last year but was only able to fund 12 projects. This year, she adds, 42 applications have been received.

Victims of the housing crunch include retail clerks, social workers, firefighters and teachers, workers vital to the region's economy. "These are hard-working people who go to work every day," says National Housing Conference executive director Robert J. Reid. None of the average wage-earners in those four groups could afford to buy the average three-bedroom single-family home in the market costing $161,000, while only the firefighter could afford the average three-bedroom apartment rent of $985 a month.

"The is ridiculous," Reid says. "This is the richest country in the world and we have people whom we depend upon in our infrastructure who can't afford to live where they work." Instead, they may spend an excessive amount of time and money commuting.

However, the National Education Association as well as police and fire organizations--groups hard-hit by the affordable housing crunch--have remained silent on the need for more affordable housing, adds National Association of Housing and Redevelopment Officials executive director Richard Y. Nelson Jr.

The Chicago Housing Authority's $1.6-billion transformation plan calls for replacing high-rise projects such as the Robert Taylor Homes, one of the poorest neighborhoods in the US, with mixed-use developments. "It's a very ambitious plan that could become a model for public housing," Markowksi says. "It clearly will be one of the engines in affordable housing production in Chicago."