A looming crisis threatens the stability of Chicagoland’s neighborhood housing.
As many tenants struggle to pay rent, the resulting lack of rental income will profoundly impact many small housing providers. Low- and moderate-income apartment buildings, most of which are owned by individuals or small businesses with minimal reserves, will increasingly struggle under a tide of missed rent payments. Unable to cover the cost of repairs and upkeep, many small to mid-sized housing providers will have no choice but to defer maintenance, and many may eventually lose their buildings to foreclosure, depriving our city and the region of housing for those who need it the most, at a time when they need it the most.
According to the National Low Income Housing Council, nearly half the nation’s housing providers are small “mom-and-pop” businesses that depend exclusively on income from rents to manage their buildings and pay their bills. They provide a large percentage of low- and moderately-priced apartment units for Chicago’s working-class families.
But a state-sanctioned eviction moratorium, in place since March because of the COVID-19 economic shutdowns, requires apartment building owners to house their tenants even if they are not paying rent.
Housing certainly is a necessity, but so are food and medicine. We don’t require grocery stores to provide free food, nor pharmacies to provide free medicine. Yet we require housing providers, including our smaller, more vulnerable neighborhood housing providers, to offer housing for free regardless of the circumstances.
These small-scale rental properties have low margins and operate close to the edge. In addition to property taxes, refuse collection, insurance, cleaning and mortgages, they are often older and have higher maintenance and repairs costs.
According to a recent Wall Street Journal report, large out-of-state institutional investors are “preparing for what they believe could be a once-in-a-generation opportunity to buy distressed real estate assets at bargain prices.”
The federal government must step in and provide meaningful rental assistance to keep tenants in their homes and these buildings in the hands of neighborhood housing providers.
State and local agencies, in coordination with nonprofit support efforts, should ensure that rental support benefits both tenants and their landlords.
Blanket eviction moratoriums, like the ones in Illinois, don’t acknowledge the complexity of situations, unwisely “kicking the can” of unpaid rent down the road and removing any recourse for housing providers whose tenants refuse to pay (even if they can) or even communicate regarding their situations.
Finally, local governments should recognize the fragility of the situation, and refrain from imposing additional regulations which burden and threaten an already fragile housing industry. We need policies that encourage growth and investment — not deter it.
Chicago is strong because of the strength of its neighborhoods. Those neighborhoods are strong in part because of the stability of their housing markets, and the efforts of those neighbors who provide that housing.
Michael Glasser is president of the Neighborhood Building Owners Alliance.
Submit a letter, of no more than 400 words, to the editor here or email letters@chicagotribune.com.
Get our latest editorials, commentaries and columns, delivered twice a week in our Fighting Words newsletter. Sign up here.
