City Investigating Program That Helped Representative Guiterrez's Daughter
Ex-Ald. Ocasio set up housing effort, bypassing City Hall
May 4, 2010 BY CHRIS FUSCO AND TIM NOVAK Chicago Sun-Times
suntimes.com
The City of Chicago's inspector general has opened an investigation into an affordable-housing program under which U.S. Rep. Luis Gutierrez's daughter was able to buy a condominium at a discount, despite family income of more than $93,000, and resell it after 14 months at a 55 percent profit.
There is now "an open investigation" of the program, which was overseen by the now-defunct 26th Ward Affordable Housing Committee. That's according to the city's Community Development Department, which referred the matter to the inspector general as a result of a Chicago Sun-Times investigation, published Monday.
City housing officials said they hadn't been aware of the program, which was championed by former Ald. Billy Ocasio (26th) as a way to build his ward's stock of affordable housing, and are concerned that two developers who took part might have done so in a way it appeared they were building affordable homes subject to the city's stricter rules, though that wasn't the case.
"It is not acceptable to us that one of our programs dedicated to providing affordable housing to moderate-income home buyers has been named in legal documents without our permission or knowledge," said Molly Sullivan, spokeswoman for the Community Development Department.
Under scrutiny: the four-unit building at 1834 N. Kedzie in Humboldt Park, where Gutierrez's daughter Omaira Figueroa bought a new, two-bedroom, two-bathroom condo in June 2008 for $155,000, selling it a little over a year later for $239,900 -- $84,900, or 55 percent, more than she'd paid.
City officials also are looking at a project at 2502 W. Haddon. The original developer of that building said that one of its three condos would be affordable through a city program called CPAN -- Chicago Partnership for Affordable Neighborhoods. It was supposed to sell for $165,000. But citing the weak housing market, Ocasio's successor, Ald. Roberto Maldonado, agreed to let it be sold at market price. The actual sale price: $195,000.
Another project that came under the 26th Ward program -- at 1214 N. Campbell -- also was supposed to include a CPAN unit, to be priced at $155,000. Instead, it's on the market for $224,900.
The 26th Ward program "wasn't an official government program," according to Ocasio, who quit the City Council last year to become a senior adviser to Gov. Quinn. Even so, Ocasio said city officials knew of the initiative. "Nothing should be a surprise to them," he said.
Sullivan said that the way the 26th Ward program was structured leaves the city "without any assurance that the housing unit was sold to a qualified buyer" who met income-eligibility guidelines.
When Figueroa bought the condo under the 26th Ward program in 2008, she and her husband -- who have a child together and two other children of his -- together were making $93,828 a year, according to records from their government jobs. That exceeded the top income the city would have allowed for a family of five to buy a home through the CPAN program -- $81,400.
Figueroa was deemed eligible to buy an affordable home in 2005 after submitting her income to a not-for-profit group that worked with the 26th Ward Affordable Housing Committee, Gutierrez said. Her family's income rose sharply by the time she actually bought the home in 2008, but, under the 26th Ward program's rules, she didn't have to re-qualify, Gutierrez said.
Under CPAN rules, buyers deemed eligible for affordable housing have to complete their purchase "within six months at the qualified income or resubmit their paperwork," according to Sullivan.
Ocasio said he started the 26th Ward program after developers complained that CPAN rules had become too cumbersome and costly. Under the program, developers could get lots rezoned for condos in Ocasio's ward only if they agreed to include at least one affordable unit and to give Ocasio oversight of how those affordable units are sold.
In the case of the building on North Kedzie in which Figueroa bought the lone affordable condo, developer Roman Popovych twice declared that the building would be part of CPAN, not the 26th Ward program, according to documents filed with the Cook County Recorder of Deeds. The first time that happened was in February 2006. And in an "amended declaration" in December 2006, Popovych and Ocasio said "one duplex unit on the first floor . . . will be sold as an affordable unit for the amount of $155,000 as determined under the City of Chicago's CPAN program."
But on May 29, 2008 -- 10 days before Gutierrez's daughter bought the condo -- Ocasio and Popovych amended the document again, this time to say the condo would be sold under the 26th Ward program, rather than the city program.
Ocasio now says that 1834 N. Kedzie was "never a CPAN building" and that the declarations were meant only to show that the 26th Ward program was modeled after the city's CPAN program. |
