University Village Affordable Housing Units sold for Huge Profits (Chicago: middle-class, sales)

[surlycue]

Affordable housing units used to turn a quick profit :: CHICAGO SUN-TIMES :: Politics (http://www.suntimes.com/news/politics/1575370,CST-NWS-maxwell15.article - broken link)

Mayor Daley promised that one-fifth of the homes built as part of the massive makeover of the historic Maxwell Street market would be set aside as affordable housing.
Damaris Matis, a real estate agent, got to buy one of those 187 affordable homes.The Maxwell Street units were supposed to go to families, but many were bought by single professionals, some of whom never lived there and some of whom rented them out.

Matis, then 25 and single, already owned two condos and was making $43,782 a year when city housing officials deemed her eligible to buy an affordable one-bedroom condominium in the city-subsidized development, called University Village.

[mod cut -- copyrighted article. Please post only the first one or two paragraphs and a link]


So, the city's only requirement on the resale of these condos was that if the units are turned in less than 10 years that all of the tax-payer funded subsidies be repaid. None of them have been repaid. Many of the buyers were single people that already owned property in other areas of the city. Many were also paid over 40K annually which was at the top of the low-income bracket. City workers (who also owned property) who made upwards of 75K were some how also eligible for the condos. Several of the purchasers listed sold their condos within a year of buying them, having never even moved in, at a significant profit.


Every time I think that I've made peace with Daley's shenanigans he surprises me with a new outrage.

[meatpuff]

I read this article too, and I've got a different angle. There are two ways to look at affordable housing: the absolute price, and whether it is a high-end or affordable unit.

In the boom days in Manhattan, there was a lack of apartments affordable to the middle class. There were apartment towers shooting up all the over place, but this wasn't solving the problem. All of the apartment towers going up were luxury units. The reason was simple: the developers, left to their own devices, will build luxury units if they think they can sell them, because they will make more money that way. It costs the same to put up a 50 story building with a given footprint for any kind of apartments, and only a little more to add luxury finishes and amenities. So why build 1,000 middle-class 2 bdrm units and sell them for $500K each when you can build 1,000 luxury units going at $800K each?

I can see an argument for a modest government subsidy in a situation like this to ensure that more affordable instead of luxury units are built, regardless of the final sales price. At least the subsidies accomplished that.

Now as for the other side or definition of affordable housing, the actual sales price. It's amazing how quickly things have drifted in this housing crisis. The thing the Sun-Times doesn't mention (because it would weaken their argument) is that the prices they are reporting these units were sold to the original buyers for in 2002-4 aren't even that cheap anymore! I was perusing craigslist and it's not too hard to find 1 bdrms in nice areas of the South Loop, an area at least as desirable as Uni Village, listed for $150K- $220K. Some of the buyers of the "affordable" housing that didn't flip immediately might be underwater even as I write!

Boy, this just goes to show what happens when government gets knee-deep in fooling with the marketplace, i.e. to the level of price- and wage-fixing. It's not that the government was especially incompetent; all the private operators were just as wrong about the real estate maket. It's that they over-reached and now we had tax-payer subsidies that were bet on house prices going up, which have since evaporated.

[Chi-town Native]

personally, I wonder how much you have to grease some bureaucrat's palm to get to the top of the list for this "affordable housing," this program just has corruption written all over it.

[ChiMack]

i hope people get charged and jailed and fined

[NearWestSider]

Originally Posted by Chi-town Native

personally, I wonder how much you have to grease some bureaucrat's palm to get to the top of the list for this "affordable housing," this program just has corruption written all over it.

Danny Solis was handling the applications for the affordable units in Centro 18 out of the ward office. But Centro 18 bit the dust a couple of years back, and calling Danny a "bureaucrat" is like calling Daley a "spokesman".

Regardless, if ever there was an area more deserving of TIF money than Maxwell Street, I've never seen it.

And how reporters can flat-out make up stuff like "University Village homeowners pay next to nothing for city services like police protection and public schools" or "Most of the property taxes they pay end up with the University of Illinois" is beyond me.

Are these reporters so dumb that they actually believe this stuff, or are they trying to brainwash unsuspecting fools?

[Chi-town Native]

Originally Posted by NearWestSider

Regardless, if ever there was an area more deserving of TIF money than Maxwell Street, I've never seen it.

My understanding is that the original TIF program was designed to help areas that on their own would never see any private investment due to extenuating circumstances, such as old industrial zones with contaminated soil, etc.

Maxwell Street however, is right by UIC, which always been forthcoming in their attempts to develop the area. So I see no reason why taxpayers should be helping this happen - the guys selling socks at the exit ramps aren't "urban blight and decay."

[NearWestSider]

Originally Posted by ChiMack

i hope people get charged and jailed and fined

And what exactly would you charge them with, jail them and fine them for? Not playing nice with a program riddled with loopholes that you happen to cherish?

[NearWestSider]

Originally Posted by Chi-town Native

My understanding is that the original TIF program was designed to help areas that on their own would never see any private investment due to extenuating circumstances, such as old industrial zones with contaminated soil, etc.

Maxwell Street however, is right by UIC, which always been forthcoming in their attempts to develop the area. So I see no reason why taxpayers should be helping this happen - the guys selling socks at the exit ramps aren't "urban blight and decay."

You "understanding" is so 180 degrees off that I am going to end this conversation right here.

Please do not respond to any more of my posts in this thread.

[Chi-town Native]

This is not "your" thread, you can peddle your "understanding" elsewhere, or you can back up your opinions with facts.

The TIF program has been an unmitigated disaster for Chicago. What exactly do you know about TIF funding? I'm going to guess not much by that last assertion. The stat below is from 2002. Are you going to tell me 30% of Chicago is blighted? Have you managed to ignore all of Ben Joravsky's reporting on the issue?

NCBG: TIFs:How TIF Funds are Spent in Chicago (http://www.ncbg.org/tifs/tif_spend.htm - broken link)

Chicago’s Tax Increment Financing Program is the dominant economic development initiative of Mayor Richard M. Daley’s administration. With 129 TIF districts in the City, covering nearly 30% of the land area, and nearly $400 million in TIF funds, the program touches all parts of the City.

[ChiMack]

Originally Posted by NearWestSider

And what exactly would you charge them with, jail them and fine them for? Not playing nice with a program riddled with loopholes that you happen to cherish?

one can always pull them over and place drugs etc on them lol j/k