Committee on Finance

Today the committee will be dealing with ordinances concerning financing for affordable housing, TIF-related proposals in the Dept of Planning and Development, and other miscellaneous items. #chicago #finance

1st, public hearing concerning a plan of finance to issue up to $1 billion aggregate principal amount of its Chicago MDW bonds, second lean bonds, and senior lean revenue bonds. The bonds are being issued as part of payment/reimbursement towards capital improvements at Midway.

Improvements include air field and terminal upgrades, equipment, noise reduction, fueling facilities, land acquisition/relocation costs, parking, roadways, security projects, refinancing of currently outstanding airport revenue bonds, etc.

The bonds will be special limited obligation, not general obligation, and payable from the airport revenues. They will also NOT constitute any indebtedness or loan of credit of the city, state, or any other political division.

After this part of the hearing, we moved onto public comments and agenda items. The 1st public speaker was a Logan Square resident, and explained that she was frustrated with displacement in her community because of large developers.

She advocated for the demolition permit surcharge fee as a “common sense policy,” and cited figures that demonstrated how housing is no longer affordable in her area, and that the demolition fee works in offsetting the issues these developers create.

Read more on the 606 demolition surcharge here:
https://www.chicago.gov/city/en/depts/doh/provdrs/developers/svcs/606-pilsen-demolition-permit-surcharge-ordinance.html#:~:text=The%20606%2DPilsen%20Demolition%20Permit,surcharge%20before%20receiving%20a%20permit.

The 2nd public speaker pushed back, saying that “while the proponents claim it has reduced demolitions, that is really only half the story. We really don’t know the full impact of this ordinance on the neighborhood.” He stated that the housing department wrote a hasty report,

and that the impact of the ordinance was not clear. He believes that this ordinance needs further study before reimposition. He also mentioned IL law stipulates that such fees be “reasonable,” and “directly attributable to what it’s imposed on.” In his opinion,

the $15,000 fee is unreasonable, arbitrary, and does not meet the legal standard. “Furthermore, any fees collected have to be used to mitigate the impact of what the fee was imposed. We don’t know whether or not these fees have been used for that purpose.” #demolition

3rd public speaker lamented that while the narrative may be that the demolition fee is meant to impact huge developers, it actually hurts “elderly owners whose homes represent a lifelong investment, retirement potential, and generational wealth that this policy ultimately robs..

them of.” He discussed a story of an older woman whose 2-4 unit home was a target for demolition, but she was unable to proceed with offers because of the $15k fee. “This ordinance only acts to further segregate our city by discouraging investment in it.” https://blockclubchicago.org/2022/03/22/606-anti-gentrification-demolition-fees-tif-for-morton-salt-shed-road-work-advance-to-city-council%EF%BF%BC/

4th public speaker discussed the success of the ordinance, claiming that it has reduced demolitions while also supporting the Chicago Community Land Trust. “We know that the 2-6 unit bldgs that are so common throughout this community are one of the biggest sources of..

low and moderate cost housing, but these are the bldgs that are targeted most for demolition and redevelopment. [..] Actually we have a wealth of data from the DePaul Inst. of Housing studies that have shown us that in the 606 area alone, it lost nearly 60 2-6 units,

and hundreds between the 2013-2018 period.” https://www.thedailyline.com/one-year-backers-anti-gentrification-victory-lap-teardowns-gutjobs
That’s the end of public comments, read more on anti-displacement/anti-gentrification:

Item 2 on agenda: a proposal to reallocate a portion of the City’s ‘22 unused tax-exempt bond volume cap to facilitate financing of affordable housing at 3030 W 21st Pl and 3700 W Congress Pkwy. The CHA is requesting council to approve ceding up to $90m volume cap. This would..

.. save the project approx $1.5m in bond fees. Project overview and proposed renovations at each location below. https://t.co/3L1M3DVf4e

Development cost per unit is $335,000, which is lower than avg for rehabbing units. The bond cap ceded by the city will allow the project to generate $7.3m (4%). The city will not be providing any additional funds for this project, only bonds and non competitive tax credits. https://t.co/mU9p9bayYx

After a few clarifying questions, motion to approve passed.

Item 3: proposal to provide TIF funds for the replacement of a mechanical system, roof, and certain masonry at Willa Cather Elementary (2908 W Washington Blvd). Approval would provide the school $8.9 in financing, with completion slated for winter 2024. Motion to approve passed. https://t.co/M3IZTfix7K

Item 4: proposal to provide $11m in TIF funds for the replacement of a mechanical system, roof, certain masonry and chimney stack reduction at James Otis Elementary (525 N Armour St). All improvements to be completed by winter ‘24. Motion passes. https://t.co/VJfdEdUC9O

Item 5: A proposal to provide a loan of $2.5m in TIF funds for some public infrastructure improvements at the Morton Salt Property (1357 N Elston Ave). Includes reconstruction of Blackhawk St, resurfacing of Magnolia Ave to create diagonal parking (400 spots), installation of..

a new 3-way traffic signal at Elston, Blackhawk & Magnolia, left-turn lane and traffic signal at the intersection of North and Magnolia, and traffic signal/pedestrian enhancements at the intersection of Elston & Division. Project is due to finish by end of this year. Item passes. https://t.co/tfxeqLXLg3

Now for the main event - regarding extension of the demolition surcharge fee (item 6) to April ‘24. Some context on the problem of decreasing housing stock, and how the demolition fee attempts to deal with it. #demolition #chicago #gentrification #displacement #HousingCrisis https://t.co/lgGmdYagmo

Data results. We see a decline in deconversions/demolitions compared with pre-pandemic. So far the fee has collected $120k - while seems small, is significant in supporting the CCLT, since opt-ins cost the trust $30k. 4 extra people can now be covered w/ the surcharge collection. https://t.co/tYSOlDUtje

Ald. Lopez asked whether this ordinance causes issues in terms of the way it is implemented in specific parts of the city, since that may create a situation where unintended consequences arise. Novara answered that the ordinance only attempts to solve this issue..

..where it needs to be solved. That’s to say, where housing costs have risen most dramatically, and where highest volume of deconversions are taking place. Lopez responded: “my rights as an owner should be no different than the owners of somebody in Logan Square or Pilsen.”

Novara noted that there’s a difference between equity and equality. “We don’t have the same conditions in every community, and the upside for sellers in these communities is much higher than it is in others. So their ability to make a profit when they sell or deconvert is very..

different than it might be in a community that does not see the kinds of rising housing costs and rising sales prices that we see in these communities. It is different, and our policies are different.” #chicago #housing #housingcrisis

Cardenas inquired what DOH’s strategy is for balancing cases in areas of the city where density may need protection. Novara answered that additional dwelling unit pilots and grants to low-income home owners for deferred maintenance help maintain density. #housing #chicago

Referencing a comment made earlier, Sigcho Lopez said of the proposed extension that “we cannot fall into this argument that somehow the $15k fee will somehow impact the small commoner worse. This will be helpful to the small commoners or the seniors we’re trying to protect.”

The ordinance fee applies to full demolitions, with the exception of demolitions that will serve construction of legally restricted affordable housing, or if the building is a health/safety hazard. #chicago #housing #displacement #housingcrisis

Motion carries to extend the demolition surcharge fee, with one NO vote from Ald. Lopez @RLopez15thWard

Item 8, proposed order authorizing 3 applications for City of Chicago Charitable Solicitation (Tag Day) Permits for Greenpeace USA, Save the Children, and the Nature Conservancy. Placed on the omnibus.

Items 9 and 10, authorizing payment of various small claims against the city. Also placed on the omnibus.

Onto supplemental agenda. Law Dept’s Mary Ruether went over a case where a CPD officer was in violation of CPD’s general order on emergency driving, and killed a civilian. Ruether believes that conviction would be likely, and the family entitled to damages due to wrongful death.

In the second case, a CPD officer lost control of his vehicle due to a malfunction and rear ended another car, accidentally injuring the driver. The trial will consider whether the officer was negligent, since the malfunction did not affect the brakes.

The victim seeks compensation for her medical bills, additional awards for pain and suffering, as well as some disability compensation. Due pass motion passes for these items.

And that’s all folks! Committee adjourned just before 12:30pm. #Chicago #Finance #Council #CityCouncil #the606 #housing #gentrification #displacement #housingcrisis