ROGERS PARK — A 32-unit building owned by a Chicago nonprofit that provides affordable housing sold to a private developer for $2.4 million last month.
The three-story brick building at 1700 W. Juneway Terrace was owned by the Chicago Metropolitan Housing Development Corporation.
It was sold to William and Lynn Gaddis, property owners and residents in Chicago and Florida.
Chicago Metropolitan Housing bought the vintage property in the mid-2000s at a time when the building was going through housing court, said Rafael Leon, executive director of group.
"This specific building was a troubled building when we bought it," Leon said. "We invested a substantial amount of money rehabbing the units, of our own money, because we didn't receive subsidies from anybody, and tried to keep the rents affordable."
Since then, the area has become "difficult to deal with" for his tenants and those who live nearby, he said.
It's sale was prompted by a convergence of factors, Leon said.
The lush green swath of Rogers Park north of Howard has seen more than its share of shootings in recent years, like the recent shooting death of 18-year-old Darlis Nkolomoni just a few blocks away.
Though Leon said the neighborhood has improved over the years, some crime still persists.
Leon said his tenants often get accused of facilitating drug deals and other crimes because they live in the area, not to mention with the stigma of living in an affordable housing building.
"The area itself has been subject to many complaints," Leon said. "We get a lot of the blame because the building is affordable housing and people think that just because it's affordable housing, it's the one that creates the problems in the area — but that's not the case."
"People blame the building, and the building has nothing to do with it."
Financial stress also added to the organization's list of reasons to sell the property.
Leon said local organizations often referred clients, like refugees or people on a fixed income, to the affordable Juneway building — but many of the tenants who receive subsidies from the state have struggled to pay rent on time due to the budget stalemate.
Among the group's 800 affordable housing units throughout the city, the Rogers Park location is likely the only one suffering due to the impasse because it is home to many who rely on financial assistance from the state.
"In this building, there were several organizations who had tenants living in there and because they didn't receive their grants from the state, they were being late in making the rental payments," Leon said. "When that happened, the entire building suffers."
Though everyone typically still pays, many of those must vulnerable were 60-90 days late, he said.
While his organization offers rents lower than market rate, he had to raise them over the years to help offset the cost of repairs and upgrades, among other factors, Leon said.
Kass Management Services, which managed the Juneway property and brokered its sale, said in a statement it helped usher in those rent increases.
“As rents and underlying property values have risen, landlords in Rogers Park and other North Side neighborhoods have been able to capitalize on strong interest from investors looking to grow their portfolios,” Kass Principal Mark Durakovic said. “We were able to market the property in a way that maximized value on behalf of our client.”
Affordable housing has been a major issue in Rogers Park over the last year, in particular with a 23,000-square-foot Target store topped with 111 apartment units.
Sixty percent of those would be set aside for those on the city's housing authority waitlist, while the remaining 40 percent would rent at market rate. Housing activists and residents have argued a higher percentage should be set aside for low-income renters.
Overall, Leon said the Rogers Park building's closure means Chicago Metropolitan Housing will "move on" to another neighborhood.
"We want to invest in other areas of the city," Leon said. "Eventually it didn't work out for us. It's one of those things where you look at the real estate and you move on."
