Assessor Holds Class 9 Discussions

The Cook County Assessor’s Office held a small forum in March consisting of property owners, mission-driven owners/developers, other stakeholders and Assessor staff involved in the Class 9 program to discuss the current state of the Class 9 (Class S) program. Historically, the Class 9 program has assisted owners of affordable housing cut their taxes as much as 50% compared to other multi-family buildings without the incentive. However, as a part of a plan to end the bias against multi-family housing built into the Cook County Classification Ordinance, the difference between the taxes paid by a building without the incentive and a building with the incentive has shrunk.

For tax year 2011 (payable in 2012), multi-family buildings with and without the incentive will share the same assessment level. Buildings in the Class 9 program will continue to benefit from being compared to ‘like’ buildings, i.e., buildings with income streams based on the pricing of affordable units, and receive additional benefits, such as recognition of the increased expenses associated with providing affordable housing as well as other risks as captured in the capitalization rate used in the income method of valuation.

However, these benefits are not well understood and they may not be adequate considering the costs to enter the program, including rehabilitation costs and administrative costs. The forum focused on the current rehabilitation requirement and the dollar threshold used. One of the suggestions at the forum was to provide participants in the Class 9 program with periodic details of these ‘other’ benefits, showing side by side comparisons of with and without the incentive.

New Federal Energy Funding

As most owners know, energy is one of the least predictable operating costs in multi-family buildings. It's also one of the largest. That’s the bad news. The good news is that there are new resources related to energy assistance. Resources primarily come from two sources: U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Energy (DOE). Here are some details.

HUD funds are targeted in two ways.

1) For Public Housing Authority-owned properties only

2) For project-based section 8, section 202 and section 811 properties proposing to do extensive green rehabilitation. $250 million is available nationally, but this is a very competitive grant application process with probably only one or two projects awarded in Chicago. Applications started being accepted on June 15th, and the fund has since received nearly 400 applications. Application information and FAQs can be found on HUD’s website.

DOE Funds are also targeted in three ways.

1) $240 million will be available in Illinois over two years for weatherization. Of that total, $140 million will be available in Cook County. Community and Economic Development Association (CEDA) organizations will implement the program. However, the funds are currently primarily targeted to single family housing. Currently, tenants at multi-unit buildings must request funds individually in order for a building to qualify. The Preservation Compact is working to facilitate use for multifamily preservation. Members of The Preservation Compact are working to develop a list of assisted properties that can be presented to the state to demonstrate a project-ready pipeline. Please contact Stacie Young, at 312.362.5947 to add your property to the list. If you would like to apply directly, call CEDA's Energy Hotline at 800-571-CEDA (2332)

2) Energy Efficiency and Conservation Block Grant. $101 million will be available in Illinois for a variety of energy efficiency purposes, including fuel efficient vehicles. It is likely that a significant amount of the funds will go for municipal buildings. Of the total funds available in Illinois, Chicago will get $27 million and Cook County will get $12 million. To get a grant, local government agencies need to submit an energy plan to the US Department of Energy.

3) State Energy Program (SEP). Approximately $103 million in federal funds will be administered through the state. Approximately $30 million will be available for building energy efficiency, including residential buildings. Applications for this competitive bid process will be taken by the Illinois Department of Commerce and Economic Opportunity in the near future.