Chicago— In the world of neighborhood development, local officials have come up with dozens of ploys to make each dollar in Community Development Block Grant (CDBG) funds they receive worth more than a dollar. In some cities, they’re worth $3 or $4 each. In Chicago, they’re worth more than $10, on average.
The Windy City, like many other municipalities, leverages each dollar by using it to attract other funds. For instance, Chicago’s neighborhood lending fund taps just $3.5 million to $4 million in CDBG funds annually to anchor a $30 million loan pool that helps owners and would-be owners of one- to four-unit buildings buy, renovate, and maintain their homes. Those who qualify can receive loans, and in some cases grants, covering up to 20 percent of rehab costs, through Neighborhood Housing Services, the nonprofit that administers the program. The initiative also offers deferred loans of up to $5,000 for emergency repair of dangerous and life-threatening conditions in these properties to applicants who have no other means to pay for the repairs. Recipients who live in the property for at least a year can have the loans forgiven.
“CDBG has been the backbone of our repair and rehabilitation efforts throughout neighborhoods, and as we’ve used it in Chicago, it’s the backbone of rebuilding communities in the city,” said Jack Markowski, head of the city’s department of housing. “It’s been very flexible, accessible, and well-used.”
Chicago’s troubled-building initiative is another area in which CDBG funds are having a dramatic impact. Since its inception in 2003, that program, which uses only $3 million a year in CDBG dollars, has helped save 4,200 units of rental housing which otherwise would have been destroyed. In conjunction with the city’s code enforcement officials, the department of housing identifies multifamily buildings that are occupied but in poor condition. It petitions the city’s housing court to put the buildings into receivership, and then taps its CDBG funds to make emergency repairs before turning the buildings over to new owners.
“Heavy code enforcement at the city would end up leading to eventual abandonment of the buildings and then to demolition,” said Markowski. “We wanted code enforcement to lead down the path of stabilization.” The program is one Chicago couldn’t afford without CDBG funds, he said. “We’d have to find other funds, which we don’t have.”
Overall, Chicago’s $30.3 million in CDBG funds, down from $35.2 million in 2000, pay for 160 housing department employees who deliver more than $400 million in resources for housing and community development.
Markowski noted that the decline in federal funding for the program has forced Chicago officials to search elsewhere for local sources of funding, such as tax increment funds or incentives such as density bonuses in the downtown area. “We can do that to some degree, but there’s limits,” he said. “In the last several years, the federal government seems to have lost sight of the purpose of this and the value to urban centers.”
