You are here: Home

Affordable Housing

 

  • Rent Control – It’s Not Just Happening in Chicago

    Photo credit realtor.com

    We’ve been hearing a lot about rent control in Chicago lately – so much so, in fact, that you might think that this is a purely local issue.

    But you would be wrong. Like a lot of movements with local impact, the roots go much deeper. Rent control has emerged as an important policy goal of the progressive movement, a movement that has been energized by the unanticipated election of Donald Trump in 2016 and rapid increases in rents from coast to coast since the end of the last recession.

     

    Read more

  • Around Rogers Park: Alderman Joe Moore, 49th Ward, Recommends “Yes” Vote on Rent Control Measure

     

    In an email to constituents, sent October 25, Alderman Moore recommended a “yes” vote on the advisory referendum to lift the state ban on local rent control measures. This recommendation is consistent with the Alderman’s stated position at the September meeting of the Rogers Park Builders Group.

     

    Read more

  • Why Rent Control Hurts Renters - Video

    This video provides a good overview of the arguments against rent control. As numerous studies have shown, there are few winners and many losers when rent control becomes law. This video helps explains the harmful impacts of rent control on low and moderate income families, the very group these policies are intended to benefit. 

     

    Read more

  • The High Cost of Rent Control

    This is a repost of an article from National Multifamily Housing Council - original article here

    That rent control is an ineffective and often counterproductive housing policy is no longer open to serious question. The profound economic and social consequences of government intervention in the nation's housing markets have been documented in study after study, over the past twenty-five years. In response to this hard-earned experience, states and local jurisdictions from Massachusetts to California have banned or greatly constrained rent control. Nevertheless, a number of communities around the country continue to impose rent controls, usually with the stated goal of preserving affordable housing for low- and middle-income families. Rent control does not advance this important goal. To the contrary, in many communities rent control has actually reduced both the quality and quantity of available housing.

     

     

    Read more

  • The Housing Affordability Problem in Chicago


    Property owners in Chicago can be forgiven if they feel like they are under siege. Local politicians of all stripes, from Aldermen to State Representatives to the Democratic candidate for Governor, seem to be tripping over each other to placate angry renters clamoring for more regulation of the rental market.

     

    Read more

  • Rent Control: What it is; How to Fight it; and How to Survive it if it Comes

    Photos in this article taken by Michael Kardas, Kardas Photography, This email address is being protected from spambots. You need JavaScript enabled to view it.

     

    To many property owners, the battle over rent control feels a lot like the movie, Invasion of the Body Snatchers. First comes that vague feeling that something is amiss. People start acting strangely for no apparent reason – just a few at first, then more and more as the movie advances. By the time we figure out what is really happening, it’s too late. The pod-people have taken over, and there is nothing we can do to stop them!

     

    Read more

  • New Incentives for Affordable Housing


    Photo courtesy of Community Investment Corporation

    All too often, in Chicago and Cook County, local governments seem to believe that every housing problem can be solved by levying more costs on property owners and making their lives more difficult! This can been seen in the relentless property tax increases and ever-growing list of mandates, fees and penalties that apply to property owners who do not strictly follow all of the rules that the city and county seem to take pleasure in constantly expanding.

     

    Read more

  • An Open Letter to State Representative Will Guzzardi

    An Open Letter to State Representative Will Guzzardi, House District 39, Illinois General Assembly:

    Why Rent Control is a Bad Idea for Chicago… and Everywhere Else.

    Dear Representative Guzzardi:

    The Rogers Park Builders Group (RPBG) is a group of property owners and real estate service providers with ties to the Rogers Park community. We are strongly committed to our neighborhood and have a deep commitment to the well-being of its citizens. We take our responsibilities as property owners seriously, and are always looking to forge relationships with our community partners, whether in the business, non-profit, or government sectors.

    We read with great interest the news of your recent bill, introduced in the Illinois General Assembly, that would repeal the state ban on the adoption of local rent control laws. We understand that, as an elected official for the residents of Logan Square and other Northwest Side communities, you are looking for ways to minimize the impact on your constituents of recent, rapid increases in rent that have forced many families out of your District. We understand that you represent the interests of your community and want to help your constituents.

    We agree that rents have risen rapidly in certain areas, including yours and other high-demand areas of the city. Although rents have not increased as rapidly in Rogers Park, our community has also seen sustained increases over the past several years.

    While rising prices certainly result in the displacement of some families, we strongly believe that it is not true that putting legal limits on rent increases would solve the problems of the families who are most impacted by rising rents, the very people you are presumably trying to help with your legislation. In fact, RPBG would argue that any attempt to implement rent control will do more to harm these families than help them.

    RPBG tries to represent the views of our members, just as you try to represent the views of your constituents. On the subject of rent control, our view is very clear. Rent control would be harmful in Chicago, just as it has been harmful in other cities that have enacted it. At best, it would offer short-term relief to your constituents in Logan Square and other places that are experiencing high rent increases. However, over the longer-term, it would result in lower-quality housing, reduced construction of new units, and generally higher prices on an average basis. Ironically, the people who will suffer the most if rent control ever becomes law in Chicago are the very people you are trying to help. Studies have conclusively shown that, over time, the people who benefit most from rent control laws are middle and upper-income people.

    We present three reasons why we believe rent control would be harmful to your constituents, to the city as a whole, and to any municipality that contemplates adopting it:

    IT DOESN’T WORK: Study after study has demonstrated that the intended benefit of rent control – to keep housing affordable for low and moderate-income people – not only fails to achieve this goal but, ultimately, makes things worse for all concerned.

    There is a strong link between limiting the ability of property-owners and developers to raise rents to what the market will bear, and the amount of investment that will flow into housing. A reduction in investment in housing has two primary impacts. First, existing units will suffer from reduced maintenance as property owners are unable to realize a return on investment by increasing rent. Secondly, new housing production will decline for the same reason – both the developers of, and investors in, new-construction housing will be less likely to build or trade properties that are subject to rent restrictions.

    As housing unit quality and quantity both decline, the market will diverge. Rent controlled units will be more affordable, but also less well maintained. New construction units will become scarcer and more expensive as developers build fewer new apartment buildings.

    Ironically, demand for rent controlled units in desirable locations will increase as the supply stagnates. Lower-income families will still be driven out of these desirable communities as higher-income / higher-credit families submit stronger applications for rent controlled units as they become available. Ultimately, many lower-income families will migrate to less desirable communities, despite the best efforts of rent control to prevent this from happening. With rent control in place, the entire market will suffer from lower maintenance of the existing housing stock, lower production of new housing, and much higher rental prices for new housing as supply contracts. Thus, it is the very people your legislation seeks to help – namely, those families with limited financial resources – who will suffer the most from the long-term impacts of rent control.

    Studies have conclusively demonstrated that lower-income people move more frequently than middle and upper-income families. Higher-income families in rent controlled markets will often stay in the same apartment for longer periods of time simply to maintain the price advantage of low rents that have been locked in over many years. Lower-income families typically have less job and income security, and must move more frequently. Over time, these families are the most likely to lose the benefit of low-cost rental housing in desirable areas.

    You don’t have to look far to see how this plays out in places that have implemented rent control.  There is a direct, causal, inverse relationship between housing affordability and the implementation of rent control. New York, San Francisco, Los Angeles and Washington DC are all prime examples of cities where the primary beneficiaries of rent control have been upper-income renters. These are the people who have been able to stay in their apartments for decades. Over time, lower-income people gradually lose these benefits and have been driven out of the most desirable areas of these cities.

    Cambridge, Massachusetts is an especially interesting example. Cambridge had rent control between 1970 and 1994.  In 1995, rent control was repealed in Cambridge when the state of Massachusetts outlawed it in all municipalities. A Massachusetts Institute of Technology (MIT) study of the impact of this repeal found that investment in housing increased once rent control was banned, resulting in major gains in housing quality and increases in supply. While lower-income families were indeed pushed out of Cambridge after 1995, this was not a new phenomenon. A 1985 study by Peter Navarro concluded the “poor, the elderly, and families – the three major groups targeted for benefits of rent control – were no more likely to be found in controlled than uncontrolled units.” Demand for rent control units had been intense prior to its deregulation, and rarely available units were in high demand. The people most likely to be approved for new rent-control leases had higher incomes and better credit. Thus, rent control did little to help all but a lucky-few families, and did much to hurt the overall Cambridge housing market.

    The present experience of San Francisco and New York, and the past experience of Cambridge, demonstrate that rent control has limited benefits for low and moderate-income families, but clear negative impacts on overall housing quality and price. In many ways, rent control produces the “worst-of-all-worlds,” with both lower quality housing and ever-increasing prices for new or unregulated units. The 1985 Navarro report concludes, “the economics profession has reached a rare consensus: Rent control creates many more problems than it solves.”

    IT’S NOT FAIR: If you don’t believe “it doesn’t work,” consider the “it’s not fair” argument. Like many similar measures, rent control is an attempt by the government to pass a cost that should be borne by all to one specific group. In this case, the cost of affordable housing is being placed squarely on the shoulders of the owners of housing.

    This is justified on several grounds, but in particular, on the assumption that property owners are wealthy and can afford the cost. Worse, property owners are often portrayed as heartless business people who are motivated only by a desire to exploit their tenants. While there are examples of wealthy, uncaring property owners, this is by no means typical. At RPGB, we take great pride in working cooperatively with our community, and giving back to those in need. The majority of our members – indeed, a majority of property owners in the Chicago area – are not wealthy. We are business people who are trying to make a living like everyone else.

    Whether you believe property owners are wealthy and heartless or not, the more important question we would like you to consider is, whose responsibility is it to help low and moderate-income families to find good, safe housing in desirable neighborhoods? If you believe that it is fair to place this burden on the shoulders of just those people who own the housing, then you can justify rent control and many other government mandates.

    At RPBG, we believe that affordable housing is a public good and that the cost of providing this good should be equitably shared by all. We have been frequent critics of regulations that seek to shift public burdens onto private sources of revenues.

    This is especially unfair when one group of private owners is called on to bear the cost of a significant public good. Affordable housing is a vexing problem, and solving it will cost many millions of dollars. To place the brunt of this cost on one small group of people is extremely unfair. It also adds to the burden already placed on property owners reeling from years of ever-growing city mandates and fees on rental housing. As property ownership becomes increasingly expensive, and as compliance with city regulations become increasingly difficult, fewer people will become property owners in the first place, and the increased costs of these mandates will continue to be passed along to renters.

    THERE ARE BETTER WAYS TO ACCOMPLISH YOUR GOAL: Perhaps we have been unable to convince you that rent control is ineffective in helping lower-income families find and keep good housing in good neighborhoods, or that local and state governments should refrain from burdening one class of citizens with the cost of providing affordable housing to lower-income families. If so, consider our last argument that there are better ways to accomplish your goal.

    But, before we offer you some alternatives, let me state that the members of RPBG believe that affordable housing is an important and worthy goal to pursue. Rogers Park is arguably the city’s most diverse neighborhood with people of every description at all income levels who live together in relative harmony. We take great pride in the Rogers Park community and its unique diversity. We would like to see that character preserved and believe Chicago would be a better city if more of it was like Rogers Park. We want Rogers Park to remain a welcoming and affordable place for all to live.

    If we can all agree that the goal of creating and preserving affordable housing is a worthy one, we are not able to agree with you on how this goal should be reached. In particular, we do not want to see ineffective measures adopted, at our expense. Such ineffective measures certainly include rent control.

    Here then are a few alternatives that RPBG believes could better accomplish the important goal of preserving affordable housing in desirable communities – like our own Rogers Park – but without placing the burden of this cost on property owners.

    Expand the Section 8 voucher program:

    • Advantages – This is probably the best way to help lower-income families deal with the ever-increasing cost of rental housing. It is also the fairest way to share the cost, since this is a Federal program paid with income tax revenues from everyone who files a tax return. Section 8 has helped millions of families cover the cost of housing at just 30% of household income. The problem is, there are not enough vouchers for all the people who need them.
    • Disadvantages – As a Federal program under a new administration that has shown little support for affordable housing, any expansion of the voucher program is a long-term goal and not one that can be easily implemented over the short-term.

    Create more permissive zoning that allows for higher density and smaller average unit sizes:

    • Advantages – Chicago controls its own destiny regarding what can be built and where. Small changes in current zoning regulations can result in the production of more units, at more affordable prices, if we have the will to push them through. Current building codes remain onerous and expensive to implement. The city could do more to relax building codes without compromising safety or good building standards. They could also allow greater density and smaller average unit sizes in high demand areas. These measures could lower the cost and increase the availability of housing in areas where the demand is greatest.
    • Disadvantages – NIMBY-ism is hard to combat. In gentrifying neighborhoods, residents bemoan the new people moving to the area and the rising rents that inevitably result. But they resist efforts to expand the housing base that could relieve some of the upward pressure on rents. You can’t have it both ways. Popular neighborhoods need more housing to meet increased demand. Either build more housing by implementing more permissive zoning and common-sense building code modifications, or accept the rapid increase in rents for the existing housing that is already there.

    Encourage development across the city:

    • Advantages – For every Logan Square or Pilsen, there are many more Englewood’s and Austin’s. Rather than focus exclusively on rising rents in just a few places, we should find ways to channel some of this energy into other parts of the city. Chicago is increasingly turning into a city of “have’s” and “have not’s.” There should be creative strategies that state and local governments can utilize to spread this growing affluence across a wider geography. Better schools in all city neighborhoods would go a long way toward encouraging development beyond the North Side and greater downtown area. Better city services, expanded transportation options and a renewed focus on community policing could all work to improve neighborhoods that have not seen any of the benefits from the rampant development in just a handful of “hot” neighborhoods.
      At RPBG, we would be much more receptive to “carrots” that “sticks.” (I’m sure we are not the only group of people who do not like being treated with sticks by our elected officials.) To be clear, rent control is a stick. Development incentives might be a tool for providing some benefits to property owners who could be enticed to buy, renovate or develop new housing in emerging neighborhoods.
    • Disadvantages – Incentives cost money, and the state and city are both broke. This may be a big challenge. But cries of poverty are not a good excuse for the shameless transfer of public costs onto private shoulders. Affordable housing should be a shared burden. The city and state will be acting irresponsibly and unfairly if they try to push this cost onto the backs of property owners. We ask you to work with us to find creative solutions to affordable housing, not against us to force the transfer of public responsibilities into private hands.

    RPBG has worked hard to be a good partner in Rogers Park, one of the city’s great neighborhoods. We have worked hard to forge relationships at all levels with a wide cross-section of community leaders. We would be happy to work with you as well on productive efforts to help solve the problem of affordable housing and rapidly rising rents in certain areas.

    But we will fight any attempt to use methods that don’t work, or that place this burden exclusively on our shoulders. We call on you to consider our arguments and find a better way to help your constituents. We are convinced that your proposed legislation will accomplish none of your goals. Worse, we are convinced it will hurt your constituents, as it will hurt all of the people of Chicago.

    Rent control is unquestionably unfair to property owners. It will make the housing market in Chicago less competitive; it will lower housing quality as property owners are forced to reduce maintenance and repairs in the face of their inability to pass along these costs; ultimately, it will make housing scarcer and more expensive for everyone.

    San Francisco and New York are not models for anyone to follow. These cities are among the least welcoming to lower-income families in the country. It is not a coincidence that both cities have had rent control in place for many years. Chicago has avoided this fate by wisely avoiding rent control. We should work together to find better ways to solve the affordable housing problems we face.

    Thank you,

    Rogers Park Builders Group:
    Allen Smith, President
    Marty Max, Vice President
    Steve Cain, Secretary
    Mike Glasser, Communications, Planning and Development

     

    Read more

Call us

Send us an This email address is being protected from spambots. You need JavaScript enabled to view it. or give us a call on (773) 491-1235

 

Search

Contact

  • PO BOX 608492, Chicago, IL 60660
  • (773) 728-9900

 

Newsletter