Can McLean County Overcome Its Low-Income Rental Housing Crisis? | WGLT

Can McLean County Overcome Its Low-Income Rental Housing Crisis?

Oct 23, 2017

In September, the GLT investigative series Landlord v. Tenant revealed increasing tensions between landlords and lower income tenants, who are often forced to rent substandard housing.

For the past two years, the McLean County Regional Planning Commission has been gathering information on needs in the county, including housing. The commission began its work in 2015, after the League of Women Voters of McLean County issued a study on housing that uncovered some troubling trends.

The League study found that rents in McLean County are higher than in nearby Champaign, Peoria, Sangamon and Macon counties. The study also revealed that half of all renters pay more than the recommended 30 percent of income toward rent.

About a quarter of all households are “severely rent-burdened,”  paying more than 50 percent of net income monthly rent, the study concluded.

When rent takes such a large chunk of a family's income, “Something is going to be compromised,” said Laura Furlong, chief executive of the Marcfirst social service agency, who coordinated the League housing study.

“Quality child care, good nutrition, health care for your family, those are the things that end up getting compromised,” Furlong said.

GLT’s Sound Ideas invited Furlong, Vasudha Pinnamaraju, executive director of the McLean County Regional Planning Commission, and Jeremy Hayes of the Bloomington Housing Authority to discuss possible solutions to the county’s affordable housing needs in response to Landlord v. Tenant.

From left, Jeremy Hayes of the Bloomington Housing Authority, Laura Furlong from Marcfirst, and Vasudha Pinnamaraju from the McLean County Regional Planning Commission.
Credit Judith Valente / WGLT

The Bloomington Housing Authority oversees federally subsidized housing in Bloomington-Normal.

Most of the new homes built in the Twin Cities in recent years have been large and expensive, reflective of the county’s median income of $79,000, Pinnamaraju said.

By contrast, the median income of people living in public housing or receiving federal Section 8 housing vouchers toward rent is $11,000, Hayes said.

Although sales prices dropped slightly in 2016, the median price of a single family home in Normal is about $160,000, according to two real estate market surveys. In Bloomington, the median sales price of homes is in the range of $175,000 to $176,000.

The market price of housing has increased the burden on the county’s lower income residents, particularly the working poor.

Aging Stock of Low-Income Housing

The Landlord v. Tenant series found an increasingly aging stock of low-income housing is adding to the problem. Bloomington and Normal cite landlords on average about 3,000 times a year for housing violations, but there is little incentive for landlords to make repairs because the demand for rental housing is high.

The burden falls heavily on the county’s working poor, who must contend with high rents, even for units in poor condition. Compounding the problem is that Bloomington and Normal each have only two housing inspectors, to inspect some 20,000 rental units annually.

Furlong said the League study found a critical need for affordable, permanent housing. The League also recommended additional support for citizens with special needs, such as the mentally ill, physically challenged and formerly homeless.

There needs to be a multiagency approach to solving the housing crisis, Furlong said.

“We realized there wasn’t just one entity looking at housing. There were a lot of silos, but not necessarily a global picture of what was happening in our community,” she said.

“The thought was we really need a body in our community that will look globally at housing needs and moving forward on what solutions we might need,” Furlong said.

“We also saw a need for data. There was not a one-stop shop for what was happening in the (local) housing world.”

Pinnamaraju said the planning commission has been trying to piece together that data over the past two years since the League issued its report.

She said the data shows rents are generally affordable in McLean County. However, those rents also reflect the high median income level of county residents—what the market can bear.

“The problem lies with that percentage of our population who cannot afford those rents,” Pinnamaraju said.

“Apartment rents of $650 a month we generally consider affordable. But what we don’t have information on is quality of affordable housing. The data therefore cannot tell the full story," Pinnamaraju added.

Long-Term Effort

Pinnamaraju said there isn’t one sweeping solution to the problem, and any fixes will require a sustained, long-term effort.

“A key recommendation is we need to have a multi-jurisdictional, public-private group looking at these issues and addressing these much more holistically than we have in the past,” she said.

Educating tenants on their rights as well as stricter code enforcement are also among the commission's recommendations, Pinnamaraju said.

The planning commission is expected to issue the complete findings of its regional study Nov. 1.

Hayes of the Housing Authority said there are currently 600 public housing units in the Twin Cities owned and managed by the Housing Authority and available to low-income tenants.

There are approximately 820 units available to residents who receive partial subsidy of their rents through Section 8 housing vouchers. Section 8 holders do pay 30 percent of their income in rent, no matter the amount of rent charged by the landlord. The government picks up the remainder of the rent owed.

About 200 private property owners participate in the Section 8 program.

However, "There are thousands more families who would qualify for those programs than we have units or vouchers,” Hayes said.

There is an especially high demand for affordable single-family home rentals, he added.

Furlong said county and city officials could do a better job of trying to attract developers who will build housing for low income residents.

The Town of Normal, for instance, recently agreed to give $800,000 in sales tax breaks to a shopping center owner. Rivian Automotive received tax credits from Normal to move into the vacant Mitsubishi plant, and Portillo's, a restaurant chain, also received assistance from the town to locate there.

"We can't afford to just dismiss a big chunk of our economy."

Bloomington paid to extend sewer lines to a private development, The Grove, which lies outside the city's limits. Bloomington also helped finance the building of its downtown arena by floating $30 million in bonds, and has subsidized its operation yearly.

The arena is currently mired in a scandal. Several officials from the private company that managed the arena were recently indicted for allegedly embezzling an estimated $1 million that should have gone to the city from its food concession receipts and other revenue.

“There are tax credits that would be available to developers that don’t necessary have to come through the cities. There are state or federal resources that we can bring her,” Furlong said.

She said there was a tax credit program available a few years back for developers to redo and ready homes that had been foreclosed on in the last economic recession, so they could be sold to people with disabilities and on lower incomes. However, few low-income families took advantage of the program—perhaps because they didn’t know about it,” Furlong said.

“Many of those houses did not go to people with needs. And once they were on the market for I believe it was 90 days, they could go on sale to the (general) public,” she added.

Local government should be willing to provide supports to help lower income tenants and first-time homeowners meet their financial obligations, Furlong said.

Hayes said having a stable supply of affordable housing helps not only lower income renters, but the entire community.

“This is an issue that touches everybody much more than they realize. These (renters) are the people who take care of your children, care for your elderly parents, the people who take care of you at the grocery store and do a big chunk of the service jobs in the community, who need some sort of subsidy,” Hayes said.

“We can’t afford to just dismiss a big chunk of our economy,’’ he said.

“If we don’t invest in that workforce, we will have gaps all over our community,” Furlong said.

“People who don’t have housing are going to require a higher level of service. They are going to end up in the ER, or homeless and needing much more supports. So (housing) is an investment up front that saves us money in the long run,” she added.

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