New Pilot Program to Preserve Affordability in Gentrifying Areas
A new pilot program approved today by City Council will preserve housing affordability in appreciating neighborhoods on the North, Northwest and West sides.
The Preservation of Existing Affordable Rental (PEAR) program refinances private sector debt on residential properties with six or more units, ensuring at least 20 percent of the units will be affordable to tenants earning up to 80 percent of area median income over a 30-year term. The program will be administered by the Department of Planning and Development with funding provided by the City’s Affordable Housing Opportunity Fund.
Two million dollars of initial funding will be used to refinance a portion of an existing bank loan for the non-profit Chicago Metropolitan Housing Development Corp., which completed the acquisition and rehabilitation of 18 foreclosed and vacant apartment buildings in 2017. The one- to four-unit structures are in Lincoln Square, Albany Park, Belmont Cragin, West Ridge and Austin.
The refinanced portion of the loan will have a zero percent interest rate, enabling 15 units in nine buildings to be preserved as affordable through 2047. The savings on the loan’s financing costs are estimated at $125,000 annually.
The pilot program will be made available to other eligible properties in gentrifying areas citywide.
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