R92-17 AMENDING THE COMPREHENSIVE HOUSING AFFORDABILITY STRATEGY

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. �' . Page 4 While much work can and will be done to renovate vacant and economically feasible properties, it may also be preferable to place a stronger priority on questions of housing affordability for existing homeowners. In addressing homeowner cost concerns, it would also be appropriate to consider the select . housing/affordability needs of the City's expanding senior citizen population. Further, the 1990 census information suggests that rental property owners, offering moderately priced dwellings, may find it difficult to achieve rental income levels that justify a reaonable return on investment. While there are many factors which influence the operating costs for rental units, the pro forma always begins or ends with questions of reasonable debt service. Thus, I would recommend that the City staff resources should maintain a knowledgable understanding and working relationship of and for the various financing tools that can attract an investor to include low/moderate income rental properties in their portfolio. To illustrate this point, I will offer two program examples drawn from the Federal Home Loan Bank Board of Chicago that have evolved from the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) . Although FHLBB membership was formerly restricted to the thrift industry, FIRREA now permits banks, S&L's and savings banks to all join in the Home Loan Bank Board's special leveraging resources via membership investment. The attached materials highlight the FHLBB's Community Investment Program (CIP) and the Affordable Housing Program (AHP) , which may both prove useful to stimulate lender and investor interest in low/moderate income housing objectives. As a closing set of comments, I would like to offer that the new "CHAS" process will tend to create a series of acronyms that may delay lines of understanding between lenders, investors and governmental resources. In the early days of the successful Section 8 Moderate Rehabilitation Program (circa 1978) , I remember the strong reluctance of the financial institutions. Even as the local bankers were then feeling the effects of the Community Reinvestment Act (aka CRA) , these same lenders wanted to know more about the Section 8 Program and how various lenders could share, rather than fully bear, the loan portfolio risk.