City housing committee supports $4 million gap money to developer partnering with church on 44-unit affordable housing project

City housing committee supports $4 million gap money to developer partnering with church on 44-unit affordable housing project

By Bob Seidenberg
The city’s Housing & Community Development Committee recommended in favor of providing $4 million in gap financing Jan. 17 to a non-profit developer partnering with a local church to create 44 affordable housing units just east of Church Street and Dodge Avenue, at 1805-15 Church St.
Committee members voted unanimously at their meeting in favor of the financing for the Housing Opportunity Development Corporation (HODC), using a combination of Tax Increment Finance and affordable housing funds.
The committee’s recommendation will next
go to the full City Council, which has final say on the request.
The funding will draw on $1 million of the $2 million currently in the city’s affordable housing fund.
The $3 million in TIF funds will come out of the West Evanston TIF, which the city has been looking at drawing on to fund a number of other projects.
Funding reflects affordable housing’s importance
Paul Zalmezak, the city’s Economic Development Manager, told Committee members that once they commit the $3 million from that fund, “and we accommodate some of the infrastructure planning that’s already underway in that TIF district, including lead pipe replacements, water main improvements, etc., we are going to really have this TIF tapped out. There will not be additional funds for other projects.”
“That’s only just underlining the fact that we have to hold our priorities,” he said, referring to the importance of affordable housing.
Staff also broached the possibility of using the city’s fast diminishing federal Covid relief funds as an alternate source of funding to reduce the dependence on TIF. An update on the status of the $43.1 in American Rescue Plan Act funds the city initially received is expected to be given at the Jan. 23 City Council meeting.

In the project, Mt. Pisgah Ministry, whose church is located immediately west of the development site, is partnering with HODC, to develop a mixed use property with retail and rental housing that is affordable as well as a new and larger church across the two parcels.
HODC has already received its application with the state approved to receive close to $13.5 million in Illinois Low Income Housing Credits, that will provide the bulk of the financing for the project.

The agency is requesting the $4 million in funding from the city, with $2.5 million earmarked for the housing portion of the project, and $1.5 million for the retail/commercial space and parking, said Marion Johnson, the city’s Housing & Grants Supervisor, in a memo.
At the meeting, conducted virtually, Richard Koenig, executive director of HODC, told Committee members that the group is requesting the funding from the city to fill a portion of the gap of the project’s full cost.
“We really wish the costs could be lower but affordable on the operating side does not mean affordable on the development side,” he said. “We do pay market rates for construction, we pay union wages, we do pay for quality construction materials.”
HODC is a community-based nonprofit developer which has been developing affordable housing, primarily in the northern suburbs, including Evanston, going on 40 years.
Koenig told Committee members that the agency is “excited about the opportunity to try and help revitalize this area and build this new building and create affordable housing long term and really be an asset to the community.”
According to staff, the proposal would increase the supply of affordable housing by providing 44 new units for households with income from 30% to 60% of Average Median Income (AMI).
For a household of three, the AMI stood at $28,510 at the 30% income level, and $56,280 at 60%, figures show.
Staff noted that 11 of the units have been approved for Housing Authority of Cook County project-based vouchers, which allow residents to pay 30% of their income toward rent and utilities, with HACC paying the rest.
Committee members Hugo Rodriguez and Loren Berlin asked Koenig why the program wasn’t using more vouchers.
Koenig noted there just aren’t that many vouchers available. “And the goal really is to be able to serve households with lower incomes, without the vouchers,” he said.
“You have a job paying in the $15 to $20-an-hour range and you can afford that with this amount and we don’t need to vouchers to make it.”
Committee member Rodriguez also asked officials whether any assurance could be given that residents will be given first preference for housing once the project is completed.
Koenig said current federal housing laws do not allow those type of preferences. “As you can imagine there are some communities where that would very exclusionary,” he said. At the same time, he said HODC has specifically asked whether the agency based on particular circumstances, would be allowed to use the preferences for Evanston residents in the project.
Sarah Flax, the city’s interim Community Development director, noted that even when the city had not been able to restrict residency in that way, “we have gotten significant numbers of new residents into new housing,” including the Ann Rainey Apartments and Emerson Square when it got rented up.
“What we do is we keep an interested party list,” she divulged. So when people contact the city about a new development, “we have turned that (the information) over to the developer when they start opening up their list to apply.”
Housing & Community Development Committee members voted unanimously in support of the program.
The strongest criticism came after the vote from Carlis Sutton, a longtime resident and landlord in the area, close to the church property.
Sutton said he was “appalled” by the group’s vote, maintaining that the majority of residents in the community do not want the development.
“You have not done a traffic study. You have not done any kind of studies of the people who be adversely affected by this development,” he charged.

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