Fioretti wants law limiting rogue developers (Chicago Journal)

By Matthew Blake

October 6, 2010

 

As 2nd Ward Alderman Robert Fioretti prepares a likely run for mayor, he is trying to establish his bona fides as an advocate for renters pushed out of affordable housing. Fioretti plans at the monthly City Council meeting Wednesday to breathe some life into the Sweet Home Chicago ordinance, which sets aside tax increment finance (TIF) dollars toward affordable housing. He also plans to introduce a resolution calling for a developer accountability ordinance.

The alderman should be familiar with the problems of reckless developers and displaced tenants — the 2nd Ward is a city leader in foreclosures, especially condo foreclosures that have pushed out renters. Tenants have either been displaced when the building was converted to a condo or when the owner entered foreclosure.

Fioretti readily acknowledges these problems, but says the blame lies more with the mayor and his pliant followers in city council.

“For the past three years I have been shaking my head and scratching my hair,” Fioretti said. “The mayor and City Council just haven’t been interested in holding banks and developers accountable.”

More neutral observers partly share the alderman’s view.

“There is no policy infrastructure to deal with condos because [before the housing bubble] they were such a small part of the marketplace,” said Brian White, executive director of the non-profit Lakeside Community Development Council. “There is not one person in all of city government whose primary responsibility is dealing with condos.”

White added that the magnitude of the real estate problem requires a federal and local response much greater than what has so far been enacted or even proposed. In other words, no one city official can be blamed.

Regardless, Fioretti, who ran for alderman in 2007 as a foe of what he judged to be runaway South Loop development, still must contend with the especially poor housing conditions of his ward.

The Chicago Rehab Network, a coalition of community development organizations, did an analysis last month of Chicago Department of Community Development numbers. They found that, “Since 2007, Chicago has seen 8,207 condominium units complete the foreclosure process with the greatest number occurring in the 2nd, 20th, 49th and 50th wards.”

Further, the “vast majority of these are conversions from rental properties resulting in the displacement of tenants.”

A study published in July by the Woodstock Institute, a nonprofit research and advocacy group, revealed the overall foreclosure problem in the 2nd Ward. In the first half of 2010, the ward saw 392 foreclosure filings, a 45 percent jump from the first half of 2009. The 392 filings represented the third highest number of any ward.

Fioretti wants to reverse this trend through both a developer accountability ordinance and the Sweet Home Chicago ordinance that 27th Ward Ald. Walter Burnett introduced in March.

Fioretti has yet to introduce an ordinance himself that takes on developers who are guilty of substandard building design and misleading marketing that has hurt owners and tenants alike.

But he will introduce a resolution tomorrow calling on the relevant City Council committees — buildings, license and consumer protection, housing and real estate — to write an ordinance that “discourages” opportunistic developers from “proliferating in the future.”

It is not clear when such an ordinance would actually materialize. Fioretti spokesman Chris Foltz says that is up to the committees.

Meanwhile, the Sweet Home Chicago ordinance would set aside 20 percent of money collected from property taxes in city hall-designated TIF districts. This amounts to roughly $100 million, as the city collected $495 million in TIF money last year. By the end of the summer the number of alderman sponsoring the bill jumped to 26, a majority of the 50-member city council.

However, the mayor’s office has raised objections to some language in the bill and, in a Sept. 23 joint Finance and Housing Committee meeting, chairman Ald. Ray Suarez (31st), declined to put the ordinance up for a vote.

“Suarez suggested that we instead form a blue-ribbon commission,” says Julie Dworkin, director of policy at the Chicago Coalition of the Homeless and an advocate for the ordinance. “He set no time limit or date for when a vote would take place.”

This is the kind of political inertia that Fioretti talks about changing.

“The mayor and some aldermen just want to use TIFs as piggybanks for their own political purposes,” he said.

No ward, however, receives more TIF money than the 2nd, and little of that money has gone to affordable housing.

Fioretti stressed in an interview that he is constantly raising the issue of foreclosures and displaced tenants. And community advocates concur that he is a regular at neighborhood housing meetings. But he might leave City Council with few concrete victories on behalf of 2nd ward residents victimized by the mortgage crisis.

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