Chicago mayor spends $700K per ‘affordable’ apartment unit

Chicago mayor spends $700K per ‘affordable’ apartment unit

Chicago Mayor Brandon Johnson’s first effort at building “affordable” housing is costing nearly $700,000 per unit. Similar units in the same area cost $126,583.

Chicago Mayor Brandon Johnson’s first affordable housing development is costing $700,000 per apartment unit in a neighborhood where existing units sell for $126,583, according to public records.

It also compares to the $500,000 cost of building a luxury apartment downtown.

But the “affordable” housing project is not downtown: it is in one of the city’s most dangerous neighborhoods. Chicago taxpayers will spend $30.6 million to build the 44-unit complex, an Illinois Policy Institute investigation found.

The development is called CARE Manor and is now under construction at 4531-55 W. Washington Blvd. in the West Garfield Park community. It will cost $695,682 per unit.

For comparison, 29 of the 44 units will be two-bedroom apartments. Zillow estimates the average market value of a two-bedroom home located in the same 60624 ZIP code was $126,583 in September.

The typical cost of building an upscale apartment in downtown Chicago ranged between $450,000 and $500,000 per unit, according to developers interviewed by Crain’s Chicago Business last year.

GMA Construction Group, a longtime city contractor started by Chicagoan Cornelius Griggs, will receive $1.16 million for building CARE Manor. It could be more if costs rise, because GMA is to be paid a percentage of the final construction cost of the apartment building.

Ethics laws forbid city contractors to donate to siting mayors, but Johnson received three contributions totaling $10,000 after he took office from Kyla Griggs, whose address was the same as GMA’s headquarters, 3520 S. Morgan St. Cornelius Griggs has a daughter named Kyla who has interned for the company.

Johnson returned $3,100 of the $10,000 campaign contribution to Kyla Griggs as of December 2024. State records note it was a refund of an amount over the contribution limit. The $3,100 was part of $46,500 accepted from city contractors by Johnson as an “oversight” that was returned to them. No explanation was available as to why Johnson did not return the other $6,900 from Kyla Griggs.

When reached for comment, a lawyer for GMA said the company has never violated Chicago ethics laws and has never contributed to Johnson’s campaign committee.

United for Better Living, a nonprofit overseeing the development of this first affordable housing project under Johnson’s new program, will collect nearly $1.7 million in developer fees from the project. It is based in West Garfield Park.

The non-profit is run by the Rev. David Todd Whittley, who also serves as the senior pastor at the Corinthian Temple Church of God in Christ down the street from the development.

Whittley is also one of the 10 appointed commissioners on the Public Building Commission of Chicago, which was formed to oversee the construction and renovation of municipal buildings and infrastructure but did not have authority over the CARE Manor project. He has been on the commission since 2016 since he was appointed by Mayor Rahm Emanuel. Mayor Johnson is the commission chair.

United for Better Living did not respond to requests for comment.

CARE Manor is Johnson’s first project using his Housing and Economic Development bond program. Of the $30.6 million, $9.5 million is from local tax increment financing districts.

“We’re taking bold steps to address the housing crisis by investing in developments that will bring more affordable homes to communities across Chicago,” Johnson said. “These projects are a testament to our commitment to ensuring every resident has a safe, affordable place to call home, while fostering inclusive growth in our neighborhoods.”

The Chicago Department of Housing’s spokesman said a few factors have increased the cost of CARE Manor and other affordable housing developments in the city.

“The construction costs for affordable housing in general are influenced by several factors, including rising material costs, higher interest rates and their financial structure,” housing spokesman Rima Alammarae wrote.

“Our affordable housing developments are also typically smaller, with 50-60 units, which does not allow for the economies of scale that larger high-rise, market-rate developments can benefit from.”

Alammarae said the per-unit cost of CARE Manor will be higher than the $126,583 two-bedroom market rate because the development will have 14 three-bedroom units. One apartment will have a single bedroom. She said the constructions costs for affordable housing are also typically higher than market-rate housing.

“Aside from this not being the case due to its financial structure and nature, affordable housing is not just about providing a roof over someone's head,” Alammarae wrote. “It's about creating safe and sustainable living environments that enhance the quality of life for residents. Therefore, they should be built to a high standard with high-quality materials.”

Johnson championed his $1.25 billion Housing and Economic Development bond as a means of spurring the creation of housing, businesses and new jobs in Chicago’s underserved communities. It is not the city’s only high-cost effort to create low-income housing.

A Chicago Tribune investigation in 2018 found the developer and lawyer who started the non-profit Better Housing Foundation made millions in upfront fees from the purchase and conversion of 81 homes into affordable housing units. The non-profit leaders promised to use state-sponsored bonds to expand affordable housing on the city’s South Side and provide social services for tenants.

Instead, Chicago Housing Authority records show 64 of the 81 foundation-owned buildings deteriorated to the point of becoming uninhabitable under the foundation’s supervision. No social services were provided to residents.

Spending nearly $700,000 to build a single affordable housing unit is fiscally irresponsible when the city is facing a nearly $1 billion budget shortfall and Johnson is calling for higher property taxes and creating other tax schemes.

The City Council should conduct a full audit of the CARE Manor project. Taxpayers deserve a decent return on their investment, and a unit that is 5.5 times more than market-rate housing is far from a decent return.

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