In 1983, the Housing Abandonment Prevention Task Force was convened to review the problem of housing deterioration and abandonment in Chicago. Task force participants included local neighborhood groups; government, civic and financial institutions; corporations; and foundations. Among the final recommendations of the finance committee was the initiation of a coordinated housing partnership to preserve existing housing stock.
The Chicago Housing Partnership (CHP) was thus formed to bring together the key public, private and neighborhood actors to rehabilitate low-income housing, with minimum federal subsidy. CHP represents a new housing delivery system which structures a partnership among corporations, lenders, public agencies, and community groups, each playing a specific role in the financing, construction, and operation of low-income housing projects. The keys to the Partnership are the new investment pools; the Chicago Equity Assistance Corporation, which brokers the deals and packages the loans; and the Community Development Corporations.
The Chicago Equity Fund (CEF) pools investments from major Chicago-based corporations which are not traditional housing actors and had previously contributed to low-income housing, if at all, only through charitable routes. These equity investments are low-cost alternatives to dwindling public subsidies, and capitalize on the psychology of corporate investment. This approach foreshadowed the shift in the Tax Reform Bill of 1986 which will stimulate corporate, rather than individual, investments in low-income housing, providing a potentially vast new source of "no-cost" funding for neighborhood revitalization. Chicago Equity Assistance Corporation (CEAC) provides the necessary technical assistance. A not-for-profit created specifically to support the partnership, CEAC provides detailed technical assistance in packaging developments for syndication. Lastly, Community Development Corporations (CDCs) may be viewed as the key program partners, as they are the primary providers of low-income housing. However, their lack of technical savvy, limited available resources, and low credibility in the eyes of private lenders limits their efforts; it is these gaps that are filled by the aforementioned CEF and CEAC.
The Chicago Housing Partnership takes the risk out of lending and the guesswork out of financing. Since 1985, the CHP has raised $11 million in corporate investments, which will result in $46 million of housing production. These 1,000 rehabilitated low-income housing apartments rent at between $325-$500 per month, an amount affordable to persons and families with annual incomes of $13,000 to $16,000. Additional success indicators include the fact that, in the first year of operation, CHP raised $6.1 million in corporate equity financing to complete $26 million in rehab. The second year of the partnership (1986 partnership for 1987 projects) will invest $5.2 million in corporate equity for another $20 million in low-income housing development. The CHP has also successfully leveraged public dollars: in year one of program operation, the Partnership leveraged $2.25 for every city dollar committed.