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State of Renters Here: Insecure

By John McCarron on Thursday, September 17, 2009

Too many of Chicago’s 1.3 million renters are reeling from forced evictions due to foreclosures, layoffs, stagnant wages not keeping up with rents, and federal housing policies so hell-bent on home ownership they end up punishing renters.

“It’s pretty bad out there,” began Joy Aruguete, executive director of Bickerdike Redevelopment Corp., in her wrap-up to some 200 housing experts and activists gathered for a “State of Renters” conference Sept. 15 at the Federal Reserve Bank of Chicago.

“There have to be more resources allocated to rental housing,” said Aruguete, whose agency is one of the most active local lead partners in LISC/Chicago’s New Communities Program. “Renters continue to get squeezed into worse and worse situations, worse housing, worse neighborhoods.”

She said Bickerdike recently advertised the availability of new affordable apartments and, over a five-day period, more than 5,000 people picked up applications.

The Big Squeeze

The centerpiece of the conference, sponsored by the Metropolitan Tenants Organization (MTO) with support from LISC’s NCP and others, was a data-filled study tracing rental conditions here over the past 20 years. Some of its key findings were that:

· Though rental units still outnumber owner-occupied dwellings, between 1990 and 2005 the city lost more than 125,000 affordable rental units.

· Demolition of CHA high-rises, condo conversions and abandonment of larger walk-ups in close-in neighborhoods are combining to disperse renters to far Southwest and Northwest Side neighborhoods more accommodating to owners than renters.

· The rent burden on family budgets continues to outpace both wages and inflation. Between 2000 and 2007, the percent of households spending more than 30 percent of their income on rent grew from 40 percent to 53 percent, while the percent spending more than half their income on rent grew from 20 percent to 30 percent.

· Calls to MTO’s hotline reflect a surge in displacements due to foreclosure, a problem compounded by the fact that foreclosed owners are crowding into the ranks of families searching for affordable apartments.

“Chicago is mired in a foreclosure and affordability crisis,” said MTO executive director John Bartlett, arguing that conditions here and across urban America reflect national policies skewed against renters.

Level that bias

“The Bush administration’s solo strategy pushing homeownership has not and will not work,” Bartlett said. “President Obama needs to move to a more balanced policy. That’s why we’re trying to get the state of renters onto the national agenda.”

But shifting federal resources toward rental—perhaps with new or increased rent subsidies, or with individual tax credits—won’t be easy if they are to be funded by cutting incentives for homeownership.

Sheila Crowley, president of the Washington-based National Low Income Housing Coalition, indicated such a tradeoff may be inevitable because the U.S. is subsidizing homeowners “at the expense” of rental housing. Total tax breaks for U.S. homeowners have been estimated at $150 billion per year, roughly three times federal spending on various rental subsidies.

Crowley singled out the deductibility of mortgage interest from one’s taxable income, along with generous capital gains treatment of home sales proceeds, as policies that most favor the wealthy, and “encourage people to get bigger houses with bigger mortgages.”

“How many bathrooms do you really need?” Crowley asked, suggesting some wealthier Americans might consider “right-sizing” their mega-houses.

However the pocketbook politics play out, Bickerdike’s Joy Aruguete summed up the concern of many in NCP with her wrap-up: “If people don’t have decent housing, there’s no way they can participate in the vitality of their communities. We need to organize, organize, organize; and to advocate, advocate, advocate.”

More information: John Bartlett, MTO, 773-292-4980 x226.