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.

Bill Smith is the editor and publisher of Evanston Now.

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6 Comments

  1. shut it down
    Maybe we shouldn’t have taken the Federal money to begin with. Shut the program down completely. The City of Evanston has no business subsidizing housing. If you cannot afford to buy a house, then you should rent. If you cannot afford Evanston rents, you should live elsewhere.

    1. I’m in total agreement with
      I’m in total agreement with you “dp_witt”! In fact, I go you one better.

      Are you aware of the fact that because our city is bestowed “home-rule” priviledges, the “CDBG (Grant)” funds – which would normally be dispensed by the US Government FREE to the individual taxpayer/applicant (either directly or to the appropriate lender/seller) – that are used for these “pet projects” are INSTEAD paid into the City/Township accounts; and then when the taxpayer finally gets them from our local officials, they come to us in the form of “loans” with variable terms attached to them.

      I hope that Obama does something about this type of “legalized extortion”!!

      1. “Facts” Corrected
        There’s some mistakes in your assumptions. 1.) Evanston’s home rule status under Illinois state statute has nothing to do with the City’s ability to receive CDBG funds from US HUD. Evanston is an “entitlement community” under US HUD regulations, since its population is over 50,000, and receives CDBG funds directly from the Department. A municipality in Illinois cannot be “home rule” unless they are or were at one time over 25,000 in population. 2.) Individuals cannot receive CDBG funds directly from HUD. Non-profit organizations can apply for CDBG funds through either a community or county, and can assist individuals (e.g., low-income single-family residential rehab) via specific programs. 3.) CDBG funds are set aside from general municipal revenue so that HUD can determine their use and remaining balance. 4.) Depending upon the community, there are some no- or low-interest loans for housing rehab or purchase of blighted residential units for conversion into workforce housing, but oftentimes the community decides to bestow the funds as grants, under HUD regulations.

        How do I know this? Most recently, I was the deputy director of community and economic development for an entitlement community in Cook County, and am a member of the City’s Housing Commission

        The next time you post something, please check your facts. It’s as simple as Googling US HUD or checking with the City’s Community Development Department

        1. Don’t want it
          You know what, I don’t want the damned US government money to begin with. There’s no such thing as free money. Any money coming from the US government is ultimately coming out of the taxpayers (our) pockets or the pockets of our children. The fact that the money is Federally sourced doesn’t make it any “better.”

          I don’t think the government should be in the business of trying to make housing affordable. That’s part of the reason why we’re in this nationwide financial crisis to begin with.

          1. Don’t Want It and Stay Out Of It
            Right on dp-witt.

            When was it correct to make sure that everyone should own their own home, especially if they CANNOT AFFORD IT.

            I pan back to Fannie and Freddie and Frank and Dodd.

            The passionate evangelical rhetoric is nice, but economically fragile – hence the housing bubble and our current state of the economy.

            Accept no government money. Accept no government programs… everything government touches worsens. Especially now – the Obama stimulus, I mean pork package, is a spending bill.

            Less government works. Big government fails. And perhaps this escapade with HUD in Evanston is an example of squandered dollars and questionable results.

  2. CDBG funds administration
    Generally, if CDBG monies aren’t administered by a municipality, they are administered by the State using much the same process – I don’t see any mention on HUD’s website that the grants go directly to individuals. More information on CDBG funds and how they work is available at the Hud website here: http://www.hud.gov/offices/cpd/communitydevelopment/programs/

    Having been at a budget meeting in Chicago and having been involved in CDBG grants in Evanston, I assure you, ours are administered in a very fair way: other places, not so much.

    Find out more about Brummel Park Neighbors and Michele Hays

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