A buddy downstate emailed me this study, noting one other blogger already has written about it.  His point; there’s a temptation to simply do what generates surplus income for the municipality.If Champaign follows the trends illuminated by the study, they will become a city of high end single family home, high end apartments, and national big box stores.

Would a logical pathway for DG see the CBD and Ogden Avenue taken over by national chains, as they generate (downstate, at least) more sales tax surplus per 1,000 square feet than do local businesses?    See Naperville.

There would be less talk of more middle income, affordable, insert-your-favorite-catchphrase-here types of homes, only high end single family homes and downtown apartments.  Surprisingly, attached homes like the high density townhouses currently languishing unsold around DG (especially downtown), would be cut back; they have a net cost instead of providing a net surplus of revenues.

Note to village: Champaign also plans to raise developer fees across the board to help balance their budget.

Pointing out the obvious, the reason high end homes make money for the muni is any given sized family tends to impose the same level of expenses on a muni whether they live in an  expensive $1-million-plus home or a $300 thousand modest home, yet the real estate tax based revenues make the big home owner pay well over three times more.  The cost burden on the library, schools, police, fire, etc. are about the same.

But without that imbalance, DG would be up the creek like every other western ‘burb.  We need our expensive homes with their expensive RE tax bills, and generally speaking, most owners of the big expensive homes can afford the burden.

The danger zone.

DuPage County has been seeking the ability to do whatever it wants to when it comes to developing real estate, under the cover of “affordable workforce housing” and “by right” use.

Despite opposition from every community that is aware of it, the county continues to push this potential program towards their goal. On April 21st and 27th, the village council met and wrote up a resolution declaring it’s opposition to the county attempt to create “Affordable Workforce Housing” in unincorporated DuPage County.

There are three components to this attempt to circumvent rational zoning laws:

• Senate Bill 1451, sponsored by State Senator Randy Hultgren (Wheaton) and Senator John J. Millner (Bloomingdale), would permit the county board in counties over 500,000 (excluding Cook) to use county funds to sell, lease, or exchange county property, including but not limited to a partial interest in property and to sell, lease or exchange property at less than fair market value, to achieve any housing need of the county and to benefit the residents of the county.  There are four counties that fit that requirement: DuPage (929,192), Kane (501,021), Lake (710,241), and Will (673,586).  Coincidence that bill sponsors are from DuPage?
• DuPage County’s Neighborhood Stabilization Program (NSP) pumps a one time federal payment of $5,176,438 into a program designed to “provide funding for the acquisition, rehabilitation, and resale of the many foreclosed homes peppering the neighborhoods of DuPage County.  The county, at it’s discretion, can continue the program past the first year, and put additional funds into the program if it decides to.
• T-01-09-Proposed Amendments to the DuPage County Zoning Ordinance relative to Workforce Development Housing (AWFH) Regulations (Request to Send to ZBA for Public Hearing) covers that zoning changes that council and staff fired off the resolution against.

DuPage Mayors and Managers Conference has also weighed in against some aspects of  this.  T-01-09 itself essentially eliminates one of the fundamental tenets of comprehensive county planning, that being deferring development approval to municipalities for areas that are within 1 mile (some counties 1.5 miles) of the municipal border.  This zoning amendment would eliminate the applications process planners use to look at building projects individually.

How it is now: “We want to do this; take a look, is this okay?  Will you let us?”

How it would be: (silence until bulldozers show up).

That could be an explosive problem in Downers Grove, where we have an unincorporated area on the southwest side that has, like everywhere else, many foreclosures going on that could be future high density developments.  Last year DG successfully used that deferred jurisdictional authority to stop a development project proposed by Pat Trowbridge which consisted of 24 townhouses on 2.75 acres of land.

This is what was called for in the original development the village opposed and prevented.  24 townhouses on 2.75 acres of land.

This is what could be built “by right” on the same property, with no say by the village.  38 townhouses on the same 2.75 acres of land.

Why do that?  Why change the zoning requirements and regulations, in many cases loosening the county’s own rules for things like density, setbacks, stormwater compensation, and required utility hookups?  Why open the door for severely overcrowded development projects being crow-barred into low density residential areas?

Higher density means more units equals more profit potential along with the lower prices.

24 units was too high a density for the village.  Add in an additional 14 units, mix in  T-01-09, and the village has no say.  That would create affordable workforce housing, but it’s also a development that throws the entire area out of kilter, out of density guidelines, and into potential flooding, something we don’t need more of here in DG.  On the plus side, it does allow for cheaper units to be built.  By building so many more of them, the developer can still make a handsome profit.

Naperville is the latest community to wake up to the potential nightmare this county undertaking represents, and they have also responded overwhelmingly in the negative.  In response to all the negative feedback, County Board member Kyle Gilgis (District 3 Downers grove), who has headed up the county effort, said the county will hold weekend informational meetings on the matter.  I could not find any information on the meetings on the County website.

Downers Grove straddles two districts, 2 and 3.  Should you wish to weigh in for or against workforce development housing as currently proposed by DuPage County you can get emails, addresses and phone numbers for all board members here.

Any white areas, even seemingly inside municipalities, are fodder for Affordable Workforce Housing development under proposed county rule changes.

I’ve been thinking about the essay, Emma Doesn’t Live Here Anymore ever since a friend called it to my attention several days ago.  What is intriguing is that it appears to define the dilemma of our local housing situation – a choice between teardowns at one end of the spectrum and the negative aspects of low-income rental housing at the other end.  Comments in the essay and by other readers suggest developers are the source of both situations.  This is an interesting observation, but not the issue I want to pursue here.

I get a sense that the author of Emma is not thrilled by the prospect of either alternative – teardowns or indiscriminate rentals – occurring in his neighborhood.  But given the choice between a teardown and a rental, he’ll take a teardown as the lesser of two evils.  Perhaps other readers of this thread feel similarly.

But maybe this provides the beginning to a possibly fruitful discussion.  By pointing up these two alternatives, has this essay framed the issue for us?  If these two apparently less-than-desirable situations comprise the extremes –- teardowns vs. potential slum situations –- are there middle-of-the-road alternatives that, in the author’s words, would help retain the “original charm” of homes like Emma’s and, by extension, preserve the character of Downers Grove neighborhoods?

The hope expressed for a makeover by Armando Montalongo and his Flip This House crew is one solution, but admittedly an unlikely one.  And it would solve the problem for only one house in one neighborhood.  What about all the others?

I suggest that readers consider what some realistic middle-ground alternatives might be, if there are any.  I’m no expert in this area, but here are three discussion-starters.  While they may not be workable, they may help to get readers’ creative juices flowing:

Idea #1. What if a local social services group were to team up with local Realtors to screen potential renters?  Criteria would be candidates’ judged potential to succeed if given a chance.  This scenario might include a rent-to-buy option.

Idea #2. What if an organization were to buy endangered, moderately-sized homes like Emma’s, fix them up and then sell them to middle-income families?  Organizations like this exist. The Community Housing Association of DuPage (CHAD) is one that is active in our county.

Idea #3. What if a group of neighbors were to form a partnership and contribute funds to buy Emma’s place (or a home like Emma’s), fix it up, and rent or sell it?  At minimum, they could likely obtain a tax deduction from depreciation while they held the property and/or split the profits from the eventual sale.

These are just ideas, and they may or may not be applicable to Downers Grove.  The objective is to start a serious conversation that produces some real world approaches in this forum that a) help preserve our neighborhoods, b) offer workable alternatives to teardowns, and c) prevent our neighborhoods from taking a downward turn.

It would be ideal if several realistic scenarios could be generated by the contributors to DGReport and then presented as recommendations through the village’s Total Community Development program (TCD3).  The village is encouraging all types of local groups to submit community-related ideas and concerns as part of the TCD3 effort.  Preservation of the original charm of older homes and of neighborhood character is a goal worthy of representation in TCD3.

So:  Any ideas?

I liked Emma.

Actually, I never really met Emma but I knew she was living in there somewhere inside that battleship grey bungalow with the cracking stucco just down the street.

Her flower boxes were weathered and peeling but the flowers themselves always meticulously arranged and cared for. Her lawn never looked great but it was neatly trimmed.

She always kept the shades pulled down tight across the old window panes regardless of the time of day; not a single shaft of sun would invade her living room that she didn’t personally welcome. She was in there all right and, like so many older folks who live alone, she seemed to prefer to keep to herself.

The first winter I spent as a proud homeowner here in town I was looking forward to that first big snowstorm so Icould fire up the new snowblower (a gift from my Dad) and slay the drifts in the driveway (pathetic, I know).

When that first storm came I knocked on Emma’s door and offered to clear her driveway and sidewalks. She shuffled cautiously into the screened in porch and, backlit by the cold fluorescent light in the entryway, and eyed me suspiciously.

She then waved me off with a ‘no, leave it alone’, and back inside she went. I understood; she didn’t know me. I cleared her sidewalks anyway but left the driveway alone.

The last few years weren’t kind to the little grey stucco. The dandelions were the first thing I noticed, followed by the
shades pulled wide open day and night and the porch light that was always on. Seems Emma had moved away.

The rumors around the neighborhood were many, but the balance was that she couldn’t keep up with the demands of an old house and an older body, and had moved in with her kids. That snowy evening on her porch was the first and last time we ever spoke.

Predictably, the house was snatched up by a local developer with plans to build two grand houses where Emma’s once
stood. The grey stucco sat on a double lot and had “teardown special” written all over it’s sagging porch. I didn’t
mourn it’s fate.

Only a month earlier I walked through an even older home two doors down during it’s pre-knockdown estate sale, where even the baseboards and window hardware were available for a price. I bought an old lawn edger (the kind you push) and walked around the deserted bedrooms and creepy basement.

Like Emma’s home, this place only meant something to the people who were raised here. Now, stripped of the laughter and the memories it was exposed for all it really was — a crumbling old home whose value was a fraction of the land it sat on. The demolition took place a few days later and now, a month later, the old grey stucco had its own date with the bulldozer.

Then a funny thing happened on the way to the quick flip. The housing market tanked, and with it went the buyers forthose new Craftsman style two-stories that seemed to be popping up everywhere. The grey stucco sat, undefended and unaltered, for almost a year.

A caravan of four cars pulled up late one night last fall, and an uneasy feeling pulled in with them. I couldn’t imagine that any sane person would have bought Emma’s old home to actually live in it; it needed more work than the Blodgett House.

The following morning I watched from my porch, hoping Armando Montelongo from Flip This House would
be leading a camera crew around the exterior pointing out where the hot tub was going to go and how best to fit in an addition and retain the home‘s original charm.

I didn’t see Armando. I saw a brindle pitbull take a crap on the parkway and a burly looking young man with a neck
tattoo lead it back up the sagging porch, back into Emma’s house. The porch light had burned out.

Instead of taking his lumps and selling the property at a loss, the developer decided to rent it, and the saga of “Section 8 house” began. For those who are not familiar, this from the U.S. Department of Housing website:

The Section 8 Rental Voucher Program increases affordable housing choices for very low-income households by allowing families to choose privately owned rental housing. The public housing authority (PHA) generally pays the landlord the difference between 30 percent of household income and the PHA-determined payment standard-about 80 to 100 percent of the fair market rent (FMR).

Key statistic: The public housing authority generally pays a percentage to the landlord, AKA, the developer. The same developer who was poised to build a home you couldn’t afford right next door to yours has now put out the welcome mat for creepy Neck Tattoo Guy, his pit bull mix and a scary mix of his friends and family and the government is going to pay him to do it. Right next door.

If you brought over a bundt cake, the frosting would curdle when you crossed the threshold. Enough has been written on this blog regarding the opposing concepts of affordable housing and the insane teardown phenomenon, but there is a gray (stucco) area that no one ever wants to discuss.

What happens when the developers move on and leave behind dilapidated homes occupied by an ever-revolving cast of interesting tenants who have no roots here, no interest in establishing any and couldn’t care less what condition they leave the property in?

For those of you who lie awake at night fearful of the developer’s hammer swinging into your neighbor’s old house, imagine how much sleep you’ll lose when your daughter wakes up scared and crying because the man across the street is screaming bad words and his kids are standing around the front lawn at 3:28 in the morning.

Imagine how you‘d feel when you call the police for the third time this year and the flashing lights send rude orange beams onto your son’s bedroom wall. When the cars begin lining up at 10 at night on a Tuesday and you know this night is going to end with a screaming match, a fistfight and an indifferent police dispatcher. Again.

Could be worse. It could be a McMansion.

Here’s an interesting “post-renters” neighborhood dilemma. When Neck Tattoo’s kid (at least I think it’s his kid; there seems to be a dozen that rotate in and out) spends the afternoon hurling chunks of concrete against the stop sign on the corner and the cracking sound bounces around the street like a machine press in a glass shop, do you risk his wrath by gently reprimanding the boy or do you pretend not to hear it? Not to notice?

Do you cross your fingers and hope he has good aim because a misguided toss could easily reach your living room window? Do you really need any of this?

Emma’s house was never the centerpiece of the neighborhood, but at least she didn’t stumble onto the front lawn screaming obscenities and slamming car doors in the wee hours. She didn’t have a pit bull, but if she did I’d venture to guess she would have picked up the doo-doo on the parkway once in awhile.

I don’t know how well the Section 8 program has worked across the country, but I’m certain it’s helped some good people establish a foothold in pride and self esteem.

My experience, and that of my neighbors, has been considerably different. Emma’s home is one of three in the immediate area that is currently being rented and the drama narrative is similar in each case.

I never saw a squad car in the neighborhood when Emma lived here, and I don’t imagine I’ll see one when the new families move into the custom homes I pray are on the horizon when the leases run out.

Where we are now is in-between — a trough between collapse and recovery — and I can tell you from personal experience that in-between totally sucks.

In the meantime, I keep the police on speed dial and an ever vigilant eye on the neighborhood kids when they play in the front yard, fearful that one of our new four-legged neighbors may want to establish its dominance. It’s exhausting, but since Downers apparently has no ‘vicious dog’ ordinance, it’s reality.

Perhaps our village officials would enjoy living next to a snarling personification of a plunging housing market? Perhaps not — maybe they’re all cat people.

It’s unlikely that Emma is coming back any time soon, so I‘m keeping my fingers crossed for a market rebound. When I see that glorious bulldozer crest the hill and bear down on Emma’s house I’ll know the turnaround is approaching.

I plan to take the day off and set up shop on the front lawn with a comfy lawn chair and a cooler of Schlitz, and enjoy the show. It will be the first ‘show’ across the street that I’ve ever watched in the daylight.

Meat is a resident in Downers Grove. Having lost his position at the rubber tubing company during a recent downsizing, he is hoping to catch on as a stockboy at the White Hen downtown.

The buyer expects to close on his first home sometime this week, said Kathy Doremus, a mortgage banker with Community Bank – Wheaton/Glen Ellyn, who has shepherded the deal.

“His reason for buying in Downers Grove was because of the program,” said Doremus. The deal is a bit more complicated than usual because it involves a “short sale.” The seller owes more than the house is worth, meaning the bank that holds the mortgage must agree to take less.

Doremus, who describes the IDHA program as “a passion of mine,” has been working with the program both locally and in West Chicago, where “the city has done a fantastic job of marketing it.”

She says the MCC program is a good way to minimize the impact of the growing number of foreclosures by bringing potential buyers into town.

“In this environment, a program that can help people come in a buy homes is what we need to stabilize the housing market,” she said. “The middle layer can’t move up if they can’t sell their homes.”

The Mortgage Certificate Program provides a federal income tax credit to qualifying buyers and can be used in conjunction with conventional, FHA or VA loans.

The program allows buyers to take 20 percent of the interest paid on their as a dollar-for-dollar reduction on their federal income tax liability for as long as they stay in the home. The remaining 80 percent of interest paid is used as a standard mortgage deduction

Buyers are also allowed to use the 20 percent credit to reduce their debt load in order to lower their debt to income ratios and qualify for a mortgage, she said. “And because they will be paying less in taxes, they can change their deduction and net out more take-home pay.”

In any case, buyers must meet the credit guidelines of whatever mortgage they are seeking.

“We’re not making bad loans, we’re making good, safe loans,” she said.

The first local buyer, who is purchasing a $210,000 home, “has credit in the high 700s and money in the bank,” she said.

Doremus also recommends buyers attend first-time homebuyer education at the DuPage Homeowner Center, a not-for-profit in Wheaton. Those who do “have a much, much lower rate of foreclosure,” she says. “It creates better borrowers.”

Downers Grove’s MCC program comes at an ideal time, as teardowns of starter homes ease up, the easy mortgages of yesteryear dry up and foreclosures ramp up, Doremus says.

“Because there are so many properties that are foreclosures or short sales, it will truly be a benefit to get homes filled up and someone living in them,” she said. “If we want the economy to recover, we need to promote home ownership and use any way we can to make it more affordable.”

Interest in the program has grown among local real estate brokers since IHDA introduced last fall. Buyers, too, are getting savvy to it. One is a police officer in a neighboring suburb who is actively seeking a home in Downers Grove.
Locally, the MCC program can help eight or nine such buyers purchase homes valued at up to $325,000. As home prices drop, the money may stretch even further.

“Realtors are realizing things aren’t going to change until we get the first-time buyers going,” Doremus says. “We’re in trouble, and here’s a good, solid way to help the community.”

Today’s Reporter carried 40 foreclosure-related legal notices concerning properties in Downers Grove and other nearby suburbs.

One of them, a notice of a foreclosure sale, concerns a house in my neighborhood. A real estate Web site describes it as having 10 rooms, a master suite and a two-car garage. The photos that accompany the listing depict an updated home with stainless steel kitchen appliances and decent baths.

“HUGE PRICE REDUCTION! SELLER VERY MOTIVATED!” the listing screams. The asking price is $350,000.

That claim of motivation appears legit. An auction sales of the property is scheduled for March 5. The judgment amount for the house: $269,216.98.

Waldack, 58, is completing his first term on the council. While not that body’s most dynamic member, he has been an outspoken proponent of public transportation and affordable housing.

Waldack also has displayed an independent streak. His relationship with former mayor Brian Krajewski was adversarial, with Waldack calling for a censure resolution against the mayor after he fired members of five advisory commissions in 2005.

Waldack lent his support to Krajewski’s challenger, Ron Sandack, in the 2007 mayoral election, but hasn’t been a blind follower of the new mayor.

The two parted company last year over Sandack’s promised ethics policy, which Waldack felt would drive campaign financing underground, into the realm of political action committees and other legal venues that would make donations more difficult to track. Waldack also noted during council discussions of the ordinance that his 2005 campaign debt had yet to be retired.

With Waldack in and Tully out, only incumbent Marilyn Schnell has yet to announce her intentions. Rumors have it that several others are still circulating petitions for the council, but we may have to wait until the filing deadline of 5 p.m., Dec. 15, to learn just how many candidates will ultimately stand for election.

The Mortgage Credit Certicate program was made possible by the village council’s decision to cede $1.3 million in private bonding authority to IDHA.

Now comes the dicey part: Given today’s dire economic climate, will the program fly?

“Of course I’m concerned,” said Roger Morsch, IDHA’s director of business and product development, who will administer and conduct training for the local program.

Back in the halcyon days of spring, Morsch told the council he anticipated having the bond cap money committed by December. Now, with mortgage insurance companies requiring buyers to ante up a 10 percent down payment, he’s not so sure.

Market factors are “affecting us by the hour,” Morsch said. Still, there are some bright spots. FHA loans have surged from 8 percent to 50 percent of the mortgage market, because they require only a 3 percent downstroke.

“The irony is that while it’s a scary time, it’s also a very good time to be a first time homeowner,” he said. “You can find some pretty good deals out there.”

IDHA’s Mortgage Credit Certificate program, which can be used in conjunction with conventional, FHA or VA loans, will provide a federal income tax credit to local buyers.

“It takes 20 percent of the interest paid on the mortgage as a dollar-for-dollar reduction to the federal income tax liability,” he said. Homeowners can use the remaining 80 percent as a standard mortgage deduction.

Most MCC buyers use the credit to increase the amount of their tax refund. However, others may choose to use it to increase their buying power by $10,000 to $14,000. Lenders predetermine the amount of the credit and they allow buyers to add that amount to their qualifying income, Morsch said.

In either case, buyers must meet the credit guidelines of whatever mortgage they are seeking.

IDHA isn’t worried about finding willing lenders, although it’s been so long since some lenders have done FHA loans that they may need to be retrained, he said. Local real estate brokers may also find the program a boon to business.

And while it may take longer than December to complete the eight or nine deals allowed by the bond cap, Morsch is committed to keeping the money in Downers Grove. However, if there are no takers for the program by September 2009, federal deadlines require IDHA to use the bonding authority elsewhere or lose it.

“I’ve told the city, if the money is moving, we’re not going to move it out of here,” Morsch said. “But if we get down to the 11th hour and we can’t get rid of the money, I will move it to another part of Illinois.”

Morsch is well aware that both residents and village council members held widely opposing views on whether a local affordable housing program is necessary or desirable.

“The village really struggled with it.” he said. “There were two very, very vocal sides.”

Morsch will describe the Mortgage Credit Certificate program to lenders and Realtors at 9:30 a.m., Monday, Oct. 13 at Village Hall.

The agency’s Mortgage Credit Certificate Program would offer qualifying middle-income buyers a credit on their income tax.

The program reportedly “works well with young professionals who are financially savvy and understand mortgages,” acting village manager Dave Fieldman told the village council Tuesday. No staff time will be required to administer the program, he said.

The $1.3 million portion of the village bond cap, which the council voted in May to cede to IHDA, will allow for seven or eight mortgages under the MCC program, Fieldman said. The program will be marketed to real estate agents and mortgage brokers, who will then offer it to their qualifying clients.

The council is expected to amend the bond cap transfer ordinance to specify the MCC program, as required by law, on July 14.

Win: Affordable housing advocates and opponents alike get the opportunity to test their assumptions in the real-world marketplace.

While $1.3 million in bonds will help only seven families buy homes, the IHDA program should clarify whether there is local demand for such a service.

Of particular interest: How many applicants will come forward and whether they are first-time home buyers from outside Downers Grove or the village police, firefighters, teachers and other support workers who reportedly can’t afford homes here presently.

Win: The village gets hard data that presumably will either support or discourage a future, larger affordable housing effort.

“I say give (the bond cap) to them, get information and find out if this is a program worth doing in a bigger way next year,” said Mayor Ron Sandack. “Conversely, if there is no activity, if there is no interest, we can do exactly the opposite and look elsewhere next year.”

Win: Ceding the bond cap to IHDA costs the village nothing, although the council voted to jettison the administrative fee — in this case, one percent was proposed — that is customarily charged borrowers from outside Downers Grove.

In fact, IHDA was the only applicant for the remaining bond cap. Had the council denied the agency’s request, the bonding authority would have reverted to the state in the absence of any other takers.

Win: The village may realize a positive economic impact from the program. Commissioner William Waldack — who participated in the meeting by telephone from his hospital room in order to vote on the issue he has long advocated — cited statistics that indicate each housing transaction is worth $28,000 in additional transactions.

He also noted that the bulk of the work on the program will be handled by IHDA rather than village staff.

Win: The IHDA program promises the best chance yet of resolving the continuous controversy that has surrounded the issue of affordable housing since that first, storied meeting of the DuPage United Downers Grove Housing Team in December 2006 and, most recently, in response to the Ad Hoc Committee on Housing report.

If it can quantify the matter in terms specific to Downers Grove, the IHDA program will be worthwhile — no matter what the outcome.