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Mayor Richard M. Daley said today he will introduce an ordinance at the September 8 City Council Meeting aimed at ensuring the continued affordability and stability of Chicago neighborhoods, better informing condominium buyers about building conditions and better protecting renters who are impacted by condominium conversions.
“The creation of more quality affordable housing for individuals and families is one of the ways that we are building a better future for the people of Chicago. Affordable housing is the cornerstone of a strong neighborhood,” Daley said in a news conference at Blackhawk Park, 2318 N. Lavergne Av.
The ordinance embodies the recommendations of the Mayor’s Condominium Conversion Task Force, which was chaired by Alderman Ray Suarez (31st) and which released its report today.
Daley said that in the years prior to the recession, Chicago experienced a significant increase in the development of new condominiums and in the conversion of apartment buildings to condominiums.
These conversions brought increased stability and investment to neighborhoods and offered new opportunities for homeownership for many first-time homebuyers, he said.
On the other hand, condominium development raised several concerns. It sometimes displaced existing tenants who couldn’t afford to buy and depleted the City’s existing rental housing stock faster than it could be replaced.
In addition, new condo buyers may not have had the ability to assess the quality of their new homes. In the most extreme cases, unscrupulous developers were defrauding buyers and lenders.
“With these concerns in mind, we created the Task Force to help us protect consumers and find a balance between the benefits of condominium conversion and its potential challenges,” the Mayor said.
Daley said that, obviously, the Task Force was established in a different real estate market, but its recommendations are good ones that support the City’s goals of protecting rental tenants and making sure condominium buyers are well-informed prior to their purchase.
“These proposals will serve residents and neighborhoods now and when the housing market begins to rebound, so there’s no better time to enact them into law,” he said.
The proposed ordinance will:
- Establish a Condominium Registration Program for new and converted condos that will require developers to show they have provided existing rental tenants with notice of the conversion and shown buyers detailed information about the property.
- It will protect existing rental tenants during condominium conversions by increasing the required tenant notice period from 4 months to 9 months and requiring that relocation assistance be provided to existing tenants affected by the condo conversion.
- It will strengthen disclosure requirements for new and converted condos by requiring that new buyers are given a standardized and easy-to-understand Disclosure Summary about the physical condition of the building prior to purchase.
In addition, but not included in the ordinance, the City will enhance its existing outreach programs targeted to existing tenants in apartments under conversion, prospective buyers and recent condo purchasers.
The City is also rolling out a pilot website providing information about disciplinary actions taken against developers and general contractors in the City, searchable by address associated with that disciplinary action. The City plans to expand the website with more information that will be useful to homebuyers, including information connecting the history of work (by address) performed by developers and general contractors in the City. The Site can be accessed at: www.cityofchicago.org/bacp
Daley said the proposal builds on previous steps the City has taken to address issues associated with condominium conversions. It will complement programs such as the Troubled Buildings Initiative, under which abandoned and fraudulently converted condos are converted into affordable rental housing.
The City has also protected rental tenants who have been caught up in the foreclosure crisis through no fault of their own. It created the Foreclosure Assistance and Information for Renters – or FAIR – campaign to ensure renters know their rights and responsibilities when the building they live in goes into foreclosure, and the City Council passed an ordinance to ensure renters get their security deposit returned, even after foreclosure.
“The ordinance we will propose Wednesday will help improve the quality of life for every Chicagoan, and help strengthen and sustain neighborhoods all around the City,” he said.
Task Force Members:
Alderman Ray Suarez, Chair (31st Ward)
Alderman Carrie Austin (34th Ward)
Alderman Helen Shiller (46th Ward)
Brian Bernardoni, Chicago Association of Realtors
Nick Brunick, Applegate & Thorne-Thomsen, P.C.
Kathy Clark, Lawyers’ Committee for Better Housing
Dave Dubin, Dubin Residential
Adam Gross, Business & Professional People for the Public Interest
Gené Moreno, Chicago Rehab Network
Mark Pearlstein, Levenfeld Pearlstein LLC
Delia Ramirez, Humboldt Park Social Services
Paul Roldan, Hispanic Housing Development Corporation
Caleb Sjoblom, Rogers Park Community Development Corporation
Elizabeth Todd, Metropolitan Tenants Organization
Bob Webster, Community Investment Corporation
Joe Williams, Granite Development
Karry Young, Karry Young Development
Commissioner Rich Monocchio, Department of Buildings
Commissioner Norma Reyes, Department of Business Affairs and Consumer Protection
First Deputy Commissioner Ellen Sahli, Department of Community Development
Commissioner Patti Scudiero, Department of Zoning and Land Use Planning
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