The head of the city’s Housing Commission told aldermen this week that the city could have to repay federal funds used for affordable housing projects if the units fail to sell and are forced into foreclosure.
Eric Beauchamp issued that warning as the aldermen debated a plan to spend $30,517 in federal funds to market 12 unsold units at three sites in Evanston.
Most of the money would be used to provide commissions to real estate brokers who find buyers for the units, with the rest used for advertising.
Alderman Ann Rainey, 8th Ward, said she took the foreclosure comment "as a very direct threat."
"The next time a housing developer comes to us with a grand plan," where the money will come from in the event of foreclosure "is a lesson we will have to learn," Rainey said.
She said the non-profit affordable housing developers "have taken us for a very unfortunate ride." City subsidies for the units, which have failed to sell as the value of market-rate properties have declined, now total over $89,000 per unit.
"This has been a dismal failure," said Rainey, whose ward has been the site of many of the projects.
But Alderman Lionel Jean-Baptiste, 2nd Ward, said the best option was to try again to get the units sold.
"There are some of us who want to see this succeed," he said.
The aldermen voted unanimously to approve the marketing plan, after adopting an amendment proposed by Rainey that would require the housing groups to submit invoices for expenses rather than be given the funds in a lump sum in advance.