Monthly Archives: November 2013

Note on Implementation of Counseling and Training Activities

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A host of providers for housing counseling, credit counseling and landlord training exist in Chicago, if not close to Woodlawn. As a result, the challenge of implementation rests on developing partnerships to bring the existing opportunities to beneficiaries in Woodlawn and those who may look to relocate Woodlawn. This can be done by advertising the counseling opportunities on Choice Neighborhoods materials and in those of supportive services coordinator Metropolitan Family Services. The Small Building Initiative could also develop an online presence or a regular distribution list of non-profit staff members, residents and officials. The message can be successfully distributed through existing organizational networks. Lastly, the Initiative could sponsor a series of ÒteaserÓ workshops with the Network of Woodlawn, Homeowners Association or the Metropolitan Planning Council that educate the community on issues such as repairing credit and landlord practices, but also introduce existing service providers to the community.

Hire construction manager for start-up assistance to home-owners;

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The Small Building Initiative could hire a part- or full-time construction manager to provide in-housing consulting services to homeowners. This staff member should either already be a certified 203(k) consultant, or would do so upon hiring, which would allow him earn compensation for the Small Building Initiative in the form of the 203(k) consulting fee.

Enhance outreach for property tax increases

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Because of past speculative increases in property values that led to additional vacancies and tax delinquencies, anticipating the effects of a stronger market and create mechanisms that will work against its harmful consequences is a priority. This transl

One approach would build on existing Homeowner Association efforts to inform seniors of their ability to request both an exemption from increased valuation and a freeze on previous assessed values (Cook County Assessor, 2013). This effort requires more ex

Institute rental licensing for two- to four-unit buildings

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Another means for improving the entire rental market, including two- to four-unit buildings, is the adoption of a rental-licensing program. The program would require annual inspection and payment of $40-$140 per rental unit per year. It would convert the complaint-driven process typical of code enforcement to a compliance-driven process that has wider coverage.

Pressure public agencies to improve culture of customer service

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The final part of improving public services concerns itself with cultural and behavioral concerns, which are generally beyond the scope of service requests and analyzing standard performance metrics. These concerns are often best highlighted by anecdotes that highlight cultural practices that need to be changed and other examples of the ideal behavior (Behn, 2006). As such, identifying formal and informal channels for documenting Òcustomer serviceÓ-oriented complaints and bringing them to the attention of decision makers capable of taking action (either disciplining employees or pursuing other efforts of redress) are extremely important. Each documented issue creates more momentum for change. Neighborhood actors who were more willing to pursue these alternative avenues were more successful in making their concerns held.

Informal and Formal Channels for ÒCustomer ServiceÓ Complaints (Table)

Institute "one unit for market" requirement

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The third approach to effecting change in the Housing Choice Voucher program disallows the business strategy of targeting voucher holders through administrative rules. It targets only the landlord that exclusively leases to voucher holder and by forcing the landlord to market at least one unit in a building to a non-subsidized tenant (or sustain the vacancy), it would reduce the profits associated with the business strategy. The rule could be added to the Housing Quality Standards enforced at the time of application through inclusion in the Request for Tenancy Approval form that each landlord must complete before a HCV contract is created (CHA, 2013d). The addition of a question about the number of units in a building would allow a queries of data to show the number of active housing assistance payment contracts at a particular address alongside the number of inhabitable units. Verifying the housing units in a two- to four-unit property could be an easily added inspection item.

The requirement could be narrowly tailored to address the particular problem-causing landlords. Landlords who develop and implement a supportive services plan could receive a waiver, releasing them from the marketing requirement since they should have already developed such a plan to qualify for CHA project-based housing vouchers. A unit that is owner-occupied would satisfy the one-unit minimum, further limiting the policy to investor-owned two- to four-unit buildings. Still, the policy would likely require changes in federal rules and regulations for the Housing Choice Voucher.

Create new down-payment assistance targeting rehab of Woodlawn two- to four-unit buildings

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The Small Building Initiative should leverage existing down payment assistance programs. A complex web of existing, temporary and restricted programs exist that would assist the purchase of two- to four-unit buildings. These represent strategic financial sources to be accessed by the efforts in Woodlawn. I propose that the Small Building Initiative provide down-payment assistance to two- to four-unit buildings that are moderately renovated and that are formerly vacant, in the form a 5 year forgivable loan for which households up to 120% AMI are eligible. This particular down-payment assistance is intended to fill the gap for households at 80-120% AMI, prioritize projects that renovate properties, and require continued residence consistent with existing programs. The focus of lending to two- to four-unit buildings (and not homes converted to single family homes) means that this effort will create additional rental housing as well.

Sponsor landlord education seminars for landlords who join homeowner association or who sign code of conduct and register rental apartments with Small Building Initiative

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Many other landlords will not be covered under these requirements and should be encouraged through other means. Free courses in Woodlawn with a proof of membership in the Homeowner Association or Block Club can be offered to those landlords who sign a code of conduct and/or participate in no-fee rental registration program with the Small Building Initiative. Despite the lack of explicit enforcement, this will create public information about available rental housing and provide standards for enforcing community norms.

Retain several 203(k) consultants to provide services to home buyers on a fee basis or revenue-sharing agreement

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As an alternative, The Small Building Initiative could retain a series of existing 203(k) consultants to perform services for homeowners under the program on behalf of the Initiative, with payments passing through to the Initiative. This could introduce more competition for the work, reduce the overhead of the Initiative and also spread the work among a series of consultants (not one salaried employee) in a manner that is more conducive to how they already operate, taking the amount of business they can handle at any time. This may also take the form of a revenue-sharing agreement whereby 203(k) consultants provide a portion of their fee to the Small Building Initiative for brokering the relationship.

Develop concentrated shallow-subsidy scattered site rental housing using the LIHTC program and 203(k) loan program, offering as many as possible for sale (as limited equity co-ops or pure sale) after 5-15 years

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The first recommendation is to develop two- to four-unit buildings into scattered site affordable housing with shallow LITHC subsidies, and offer up all for deed-restricted purchase after 15 years. Case studies show that the LIHTC subsidy is often very successful in renovating scattered site housing in weaker markets, partially because the shallow subsidy of LIHTC developments (50%-60% AMI) are received more positively than the deeper subsidy of Section 8 vouchers (Thomas & Dewar, 2013). Viewed not as a substitute but a complementary development strategy, LIHTC development could add income diversity to the neighborhood that hopefully would counteract the negative connotation that affordable housing has. Affordability would be viewed in relation to the resident. The opportunity to purchase houses (or individual units) through a limited-equity co-op would encourage greater resident stability and provide an opportunity for building wealth
The second recommendation is to develop two- to four-unit buildings into scattered site affordable housing through the 203(k) loan program, and making them available for purchase. These units would be restricted to households at or below 80% AMI, and like the LIHTC program, would provide a more shallow (supply-side) subsidy that should be positioned as complementing existing affordable housing options. If the program allows, the units could also be sold as limited-equity co-ops. Use of the 203(k) program for rental housing is only available, however, to a non-profit developer.