Case Study: Chicago's Low Income Housing Trust Fund
Chicago's Low Income Housing Trust Fund
Chicago focuses a majority of its Low Income Housing Trust Fund resources on the Rental Subsidy Program -- a nationally recognized model for assisting very low-income individuals. The Trust Fund is used to subsidize rent for extremely low-income households (earning less than 30 percent off area median income) through quarterly payments made directly to landlords.
Discretionary funds from the City of Chicago's corporate fund, as well as HUD grants and other federal assistance, have been used to support the Trust Fund since its inception. In 2005, the City of Chicago made a 5 year commitment totaling $5 million from proceeds from the privatization of the Skyway (a 7.8 mile toll road connecting to the Indiana Tollway). The commitment was renewed in 2010 with a $1.3 million allocation of proceeds from the sale of parking meters.
The Trust Fund was also designated by the Chicago City Council to receive 40% of the fees developers pay for zoning and/or administrative relief which allows them to build at a higher density than normally allowed. Funding from this source is used to support long-term investments with forgivable loans and grants.
In addition to the City's efforts with the Low Income Housing Trust Fund, the State of Illinois passed the Rental Housing Support Act in 2005, establishing a statewide rental assistance program for extremely and severely low-income households. The program is administered by the Illinois Housing Development Authority and funded through a $10 document recording fee, which is assessed on all real estate documents in communities across the state. Ninety percent of funds collected are returned to the local entity to support permanent affordable housing.
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