CR_Summer2020_Online
The official publication of the Chicago Association of REALTORS®.
The official publication of the Chicago Association of REALTORS®.
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normally zoned for housing — for example,<br />
some basements and attics qualify, as<br />
do coach houses. One prominent and<br />
recognizable example of an ADU? In the TV<br />
show “Happy Days,” the Fonz lived above<br />
the Cunningham’s garage. The City is taking<br />
pragmatic steps to reverse decades of<br />
regulation which forbade ADUs. The matter<br />
will be debated in City Council and while<br />
the final outcome may be less desirable<br />
than some would hope for, any legislation<br />
that incentivizes the construction of more<br />
housing units is a win for affordable housing<br />
and a win for the REALTORS ® !<br />
WHAT’S NEXT FOR REAL<br />
ESTATE & ADVOCACY<br />
As we prepare for the post-COVID-19 world<br />
and return to normalcy, it also means a<br />
return to an environment in which private<br />
property rights are under attack, attempts<br />
to add bureaucracy will delay transactions<br />
and most importantly, we will all be asked<br />
to dig deeper in our pockets to fund the<br />
City of Chicago, the County of Cook and<br />
the State of Illinois.<br />
Prior to the COVID-19 crisis, a multitude of<br />
bad policy ideas were under discussion.<br />
Now, some of those ideas are in hyperdrive<br />
and knee-jerk responses from elected<br />
officials are abundant. To name a few:<br />
• Rent holidays/ rent abatement<br />
• Relocation fees for tenants (Fair<br />
Notice Ordinance)<br />
• Giving those with lapsed leases more<br />
time to move out (90 days notice in the<br />
Fair Notice Ordinance)<br />
• Just cause evictions, which strip the<br />
landlord from choosing new tenants<br />
unless the tenant fails to pay rent or<br />
engages in criminal activity<br />
• Tenants having right of first refusal for<br />
the sale of large buildings (Woodlawn<br />
Housing Preservation Ordinance)<br />
• Introduction of a City version of the<br />
Just Housing Ordinance<br />
• A Bill of Rights specific to Senior<br />
Citizen Housing<br />
REALTORS ® need to be aware of the<br />
challenges forthcoming. You have a<br />
dedicated Government Affairs team who<br />
attends hearings and council meetings<br />
and meets with senior staff of on your<br />
behalf. But as always, you can help us,<br />
help you! Respond to any Call for Action<br />
sent to you — and encourage your peers<br />
to respond as well. Elected officials must<br />
hear from you to know and understand<br />
“The Power of R!”<br />
Soon, October and November will be here<br />
— and the changing of seasons brings<br />
about municipal budget proposals. At that<br />
time, both the Mayor and the Cook County<br />
Board President will present budgets.<br />
Both units of government have obligations<br />
to fund pensions and, as with most other<br />
big cities, both units of government saw a<br />
significant decrease in the collection of tax<br />
revenue. As of early this summer the city<br />
projected a deficit in excess of $ 700 million.<br />
Undoubtedly, tax and fee increases will be<br />
part of each proposal.<br />
After the Great Recession of 2008, we<br />
persevered; post-COVID-19, we will also<br />
persevere.<br />
BREAKING DOWN<br />
$1 DOLLAR OF RENT<br />
There exists a misconception that rental housing owners enjoy large margins<br />
and can continue operating in the absence of rent payments.<br />
Only 9 cents of every $1 are<br />
returned to owners, including the<br />
many apartment owners who are<br />
themselves small businesses and rely<br />
on this revenue to make ends meet,<br />
and investors, which include public<br />
pensions and 401ks, on which many<br />
Americans rely—whether or not they<br />
reside in rental housing.<br />
Approximately 39 cents of every $1<br />
pays for the mortgage on the property.<br />
Roughly two-thirds of the apartment industry<br />
has private lenders and are ineligible for<br />
federal mortgage forbearance via the<br />
CARES Act. This is a critical expense, as<br />
mortgage foreclosures put all residents<br />
at risk of losing their housing.<br />
With so much discussion around rent payments during COVID-19,<br />
the rental housing industry would like to explain<br />
the breakdown of $1 dollar of rent.<br />
10 cents of every $1 is spent<br />
on capital expenditures, including<br />
roof and HVAC replacement and<br />
other important repairs that help<br />
ensure quality housing for America’s<br />
40 million rental housing residents.<br />
27 cents of every $1 covers payroll expenses, including<br />
paying employees who operate and maintain the property,<br />
ongoing maintenance, utilities, insurance and the like.<br />
14 cents of every $1 goes to property taxes, which in turn supports the community through financing for schools,<br />
teachers, emergency services and other important local needs.<br />
Between mortgage payments and investor returns, which help support many Americans’ retirement plans, and dollars put back into the<br />
apartment community to ensure quality living for residents, a rent payment is much more important than one might otherwise realize.<br />
Source: National Apartment Association 2019 Survey of Operating Income & Expenses in Rental Apartment Communities; U.S. Census Bureau<br />
2015 Rental Housing Finance Survey; Real Capital Analytics; Redstone Residential<br />
Note: Figures based on averages and approximations; because apartment community spends vary based on size and location, among other factors, one cent remains that can fall into any of the listed categories.<br />
WE WANT TO HEAR<br />
FROM YOU<br />
Keep in mind: your Government Affairs staff<br />
is here for you. Our monthly Coffee with the<br />
GADs meetings are excellent venues for you<br />
to share your concerns.<br />
As needs and hot topics arise, please call or<br />
email us to request issue specific webinars<br />
or programming you desire. This brings<br />
more value to you as a member and makes<br />
sure our staff is meeting your needs.<br />
Sign up to receive REALTOR ® Party Mobile<br />
Alerts: text REALTOR to 30644.<br />
Contact your GADs Kristopher J. Anderson,<br />
Director of Government & External Affairs and<br />
Adriann Murawski, Director of Government<br />
Affairs.<br />
Reprinted with permission of the National Apartment Association.<br />
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