In Chicago's Uptown neighborhood in the 1980s, housing options for low-income residents were rapidly disappearing. Many of the older single-occupancy hotels were being torn down. Apartments were being converted to condos, further reducing the amount of housing available for reasonable rents. The problem, in short, was how to make sure there was enough housing for low-income individuals, families, and seniors who didn't have the means to access quality affordable housing.
Lakefront SRO, a community-based nonprofit organization, now the regional Chicago-land branch of 30-year-old Mercy Housing, stepped into the breach. In 1989, the developer of affordable housing started buying and rehabbing the old hotels and making them available to homeless and low-income individuals. In 2006, Lakefront SRO and Mercy Housing merged and the Chicago organization became Mercy Housing Lakefront (MHL). At that time, MHL began developing homes across the region, including in Milwaukee. MHL developed housing for seniors, single adults, families, and homeless people. In 2006, Bank of America, which already had a longstanding relationship with Mercy Housing, was added to the mix in Chicago.
Mercy is unusual in their approach. They were the one of the first in Chicago to develop permanent supportive housing projects of significant size. They create more than shelter, developing “program-enriched” housing that provides residents with access to supportive services to maintain housing stability and employment skills training like computer literacy and resume writing, so residents who are able to work are better prepared to get jobs and achieve personal independence. For senior residents, Mercy provides a means for them to gain access to a community of new neighbors, reducing isolation and providing supportive services so they can remain independent.
As of 2006, Mercy Housing Lakefront set itself an ambitious goal. Over the next ten years, they plan to leverage $1 billion to build or preserve 7500 affordable homes, create 8000 jobs and prevent displacement of 20,000 homeless people. Since 2006, MHL has been implementing their Chicago strategy with the help of Bank of America. (The bank has been a supporter of the national organization since 1994).
The bank has worked with Mercy on many fronts. First and foremost, it is providing the construction capital and resources that allow Mercy Housing to undertake these projects. But in addition, the bank will typically make longer-term equity commitments. The bank takes a “holistic” approach to their relationship with Mercy, so they will often provide philanthropic support that funds services to the residents of Mercy homes.
Mercy has created construction jobs and has helped revitalize the neighborhoods where it has developed or preserved housing. While some of the positive impact is qualitative—like the creation of expensive condos near their affordable units—some of it is quantitative. Mercy uses a measurement system to track resident stability rates and has found that they have lower resident turnover than the traditional real estate market. Says Cindy Holler, President of Mercy Housing Lakefront, “What excites me is being at the nexus where people, buildings and institutions meet to make communities solid and whole.”
Kristine Jurmu, SVP in the bank's Community Development Lending Affordable Housing Group in Chicago notes what Bank of America brings to the table. “Our typical community development lending project includes multiple sources of capital, both public and private, as well as capital provided through, say, the federal government, the state, or the city. To make these deals happen requires a commitment from all the providers to look toward the mutual endgame, which is to provide affordable housing.”
Holler says, “It's very difficult for someone who's worrying about their housing every single night to think about anything but day-to-day survival. So the first thing we do is put a stable roof over their heads that they know isn't going to be taken away. But the second thing is to make sure there's support that can help them break the cycle of homelessness. By combining the two, you have a formula that can create a lot of success.”
Mercy Housing Lakefront resident Ollie Mason has seen her life transformed by securing affordable housing. She says, “I had been homeless since 2005 and was tired of being on the streets. At my church, I heard about a newly renovated place; I couldn't believe it when I got accepted. I said, is this mine for real? It feels good just to have your own key, your own stove to cook. So now I volunteer in the community garden and I'm going back to school to become a chef. That's my plan for the future.”
Says Holler, “Oftentimes, people say, oh, you're transforming people's lives. No, we don't transform people's lives. What we do is give them an environment where they can transform themselves.”
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