SRO preservation now mandated by Chicago Municipal Code

The Norman Apartments in Uptown, Chicago, in the process of conversion from affordable to market-rate units

The Norman Apartments in Uptown, Chicago, in the process of conversion from affordable to market-rate units

During the 1990s, the rate of poverty in Chicago decreased by 17 percent. As city residents accumulated wealth, affordable housing diminished. Chicago began phasing out housing projects, and landlords began converting single room occupancy buildings (SROs) into market-rate apartments and condominiums. Between 1973 and 1994, the city lost close to 40,000 affordable units to demolition, development and reconstruction. Even north side neighborhoods like Uptown, which added more than 600 units in the 1980s and 1990s in an attempt to curb homelessness, experienced an overall decrease in the percentage of affordable units.

SROs are defined by the Chicago Municipal Code as, “A dwelling unit within a single-room occupancy (building) that is used or intended to be used as-sleeping quarters or living quarters with or without cooking facilities, and that contains not more than one habitable-room consisting of not more than 250 square feet of floor area, excluding from the calculation of floor area any kitchen having less than 70 square feet of floor area.” These inexpensive micro-units are an essential component of the affordable housing toolbox. Because they are privately owned and operated, SROs do not require the long wait lists, screening procedures and application processes of the popular but overcrowded Section 8 program.

As developers like FLATS Chicago and BJB Properties begin snapping up aging SRO buildings in gentrifying neighborhoods, available, affordable SRO units are becoming a scarce resource. More than 2,000 such units have been either converted or demolished since 2011; the total SRO units in Chicago now hovers around 6,000.

Wednesday, Nov. 12 marked a turning point in the fight to preserve Chicago’s affordable housing and provide shelter to thousands of city residents. After years of meetings, research, and advocacy by Chicago For All -a coalition comprised of ONE Northside, the Chicago Coalition for the Homeless and other advocacy groups -the Single Room Occupancy Preservation Ordinance was passed by city council. The ordinance regulates sales and conversions of SROs to maximize the possibility that the buildings remain affordable and provides funds to displaced residents if affordability is not preserved.

Before selling to a private developer for market-rate units, the owner of an SRO must spend six months looking for a buyer who will guarantee that all building units will remain affordable to extremely and very low income tenants for at least 15 years. If, after six months, the owner either cannot find a suitable buyer or cannot reach an agreement after good-faith negotiations, the owner has another four months to find a private developer. If no such buyer is found within four months, the process and timeline are reset and the owner must look for another affordability-friendly buyer.

This process of prioritizing affordability during the building’s sale can be skipped if the owner pays a preservation fee of $20,000 per building unit. These opt-out fees will go into a fund to help existing SRO owners rehabilitate and maintain their buildings.

SRO owners are also responsible for providing monetary relocation assistance to long-term residents, defined by the ordinance as anyone who has lived in the building for at least the 32 consecutive days prior to the notice of sale, conversion or demolition. All long-term residents will be paid a one-time relocation fee of $2,000 or three months’ rent (whichever is greater). If any units in the building remain affordable after the sale, existing residents will have the option of being placed on a waitlist.

In cases where the building is sold to a private developer for conversion to market-rate units, the owner will owe each resident an additional $8,600 supplemental relocation fee (bringing the total relocation assistance to $10,600). This additional rate also applies if residents are ordered to vacate the building not due to a sale but due to a declaration by the City of Chicago of unsafe living conditions.

The emphasis on maintaining affordability at the point of sale for SROs as well as the monetary provisions for displaced residents are commendable improvements in Chicago’s affordable housing system. The most remarkable section of the ordinance in my opinion, however, is the list of resident’s rights entitled “Retaliation Prohibited.” These eight bullet points prevent owners from terminating leases, refusing to renew leases, increasing rent, decreasing services or threatening a lawsuit if a tenant exercises their right to lawfully remedy building or health code violations. Residents are now free to speak to government officials or offices, community organizations, news media, or their building owners about violations or unsafe conditions without fear of retribution. Having been banned from the Lawrence House last winter for talking to tenants about their experiences during the relocation process, I am glad that free speech is restored to residents of affordable buildings.

The scope of this ordinance is groundbreaking, at attested by the wide news coverage it has received both within the city and in Washington D.C. and Virginia. Still, as Alderman Fioretti stated during the City Council meeting to approve the ordinance, “Let’s applaud ourselves for 10 minutes and then move on and try to find ways to have affordable housing in every community in every part of the City of Chicago. Because we all know this is just touching the…problems.” With the help of Fioretti and his fellow aldermen, residents of affordable housing now have a chance for stability.


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