DEVELOPMENTS

222 South Riverside Plaza, Suite 2200 | Chicago, IL 60606-6109 | www.cicchicago.com

cicRecipient of the 2012 MacArthur Award for Creative and Effective Institutions

Community Investment Corporation • Chicagoland’s Leading Multifamily Rehab Lender

cic acted on 9,375 affordable units in 2014CIC made $33.5 million in 80 loans and grants from all sources as of the end of FY2014 on September 30 for 1,308 units of affordable rental housing. Through direct loans and grants, housing court receiverships, buying and selling troubled properties, and working with public agencies to preserve assisted housing, CIC played a direct role in preserving 9,375 affordable units in 2014.

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December • 2014

9,375 UNITS preserved by CIC activities

$17.7 MILLION in Energy Savers loans/grants since 2008

1,574 LANDLORDS/MANAGERS attended 65 Property Management Training sessions

8,333 UNITS in 407 BUILDINGS recovered since the Troubled Buildings Initiative began in 2003

53 CONDO BUILDINGS with 555 UNITS transferred to new owners

1,500 AFFORDABLE UNITS preserved through The Preservation Compact

Thanks to cic’s capable staff and investments from 39 financial institutions, cic continued:

• to lend for acquisition and rehab, • to conserve energy in multifamily

housing, and • to train a record number of property

managers.

Working with the City of Chicago to correct code deficiencies in multifamily buildings, CIC recovered buildings destroyed by failed and fraudulent condominium conversions, and transferred bad buildings to responsible new owners.

2014 CICHIGHLIGHTS

2 | CIC DEVELOPMENTS

Below are some FY2014 highlights:

MULTIFAMILY LOANS In FY2014, CIC approved 59 loans for $31.4 million to preserve buildings with 1,049 units. In buildings financed by CIC, 95% of the units were affordable to people with 80% of Area Median Income or less, and many were affordable to people with incomes much less than that.

TROUBLED BUILDINGS INITIATIVE This year, the Troubled Buildings Initiative (TBI) recovered another 62 of the city’s toughest buildings with 1,342 units. Since it began in 2003, the TBI partnership of four City departments, Housing Court, and CIC/CII (Community Initiatives, Inc.) has addressed 718 buildings with 13,969 units and recovered 407 buildings with 8,333 units.

DISTRESSED CONDOMINIUMS Working closely with the City, CII filed condo deconversion orders on 9 buildings and sold 12 buildings with 122 units to new owners to restore their rental status. Since 2009, CII has transferred 53 buildings with 555 units for conversion back to rental housing.

MULTIFAMILY ACQUISITION/DISPOSITION In FY2014, CII transferred to capable new owners three multifamily buildings with 84 units. Since 2003, CIC/CII has acquired and transferred 202 buildings with 3,472 units to be rehabbed and preserved for affordable rental housing.

ENERGY SAVERS Together with Elevate Energy (formerly CNT Energy), CIC continued to help property owners substantially reduce their energy consumption and utility costs by approving $1.5 million for 19 loans for buildings with 465 affordable rental units. Since 2008, CIC has approved $15 million in 122 loans, and 34 grants for $2.8 million, to conserve energy in buildings with 5,352 units.

PROPERTY MANAGEMENT TRAINING In FY2014, CIC’s Property Management Training program taught 1,574 landlords and managers the basics of property management in 65 presentations throughout the six-county area. From its inception in 1998, CIC has provided training to more than 14,000 apartment owners and managers.

THE PRESERVATION COMPACT The Preservation Compact led successful efforts to preserve affordable rental housing in six publicly assisted buildings with 1,500 units.

From left to right: HHCD Board Chair, Jackie Taylor Holsten; HHCD Executive Director, Kendra J. Freeman; CIC President, Jack Markowski; and President Peter Holsten of Holsten Real

Estate Development Corporation.

Holsten Human Capital Development (HHCD) honored CIC President Jack Markowski with the Community Sustainability Award October 16 at a reception at Loyola University. The award honors “individuals who have played a significant role in building healthy communities throughout the city of Chicago.”

Community Sustainability Award

CIC President Jack Markowski

was elected Chairman of the

National Association of Affordable

Housing Lenders at the annual

Board meeting in November.

CIC DEVELOPMENTS | 3

Reports confirm affordable housing demand in Cook County

More than 130 investors, developers, policymakers and housing experts attended a workshop November 6 to learn about resources available for investors in 1-4 unit rental properties. The Preservation Compact, CIC, Chicago Community Loan Fund and the City of Chicago hosted the workshop.

cic loan pool renewal on track

The Preservation Compact’s new 2014 report, Strategies that Work, demonstrates that demand for affordable rental units far outstrips the supply and outlines strategies to address the growing need. The report also sheds light on the dual nature of Cook County’s affordable rental housing market and the challenges it faces.

Strategies that Work was released in conjunction with the annual report of DePaul University’s Institute for Housing Studies, The State of Rental Housing in Cook County: An Examination of Lending Patterns to Small Multifamily Rental Buildings. The DePaul report provides further evidence that the County’s low- and moderate-income neighborhoods, which were hit hardest by the foreclosure and economic crisis, are still struggling in the aftermath.

Since 2009, lending to multifamily rental buildings in the County’s low- and moderate-income neighborhoods has lagged significantly behind lending in middle- and upper-income areas. In addition to highlighting the need for investment in low- and moderate-income neighborhoods, The Preservation Compact report reveals that more than 523,000 County households need affordable rental housing today, up from 461,000 in 2005.

More importantly, the report shows that the gap between the supply of affordable rentals and the demand is more than 176,000 units. The gap occurred even though the number of affordable units increased from 296,000 to 347,000.

“The expanded number of affordable rentals is largely due to the temporary entry of single family homes into the rental market,” said CIC President Jack Markowski, chair of The Preservation Compact. “Of greater concern is that demand for affordable rentals still outpaces the growth in supply.”

The County’s affordable rental units are crucial to the local and regional economy, providing housing for people who work but do not earn enough to support home ownership. Most affordable rentals are in privately-owned buildings that are at least 75 years old. Preserving and improving these units requires investment and rehabilitation.

“We can’t build our way out of this crisis,” said Stacie Young, director of The Preservation Compact. “Any new construction of affordable rental housing requires significant public subsidies, which are in very short supply. Preservation is the key to maintaining the existing supply of affordable housing.”

The money CIC lends local investors to acquire and rehab affordable multifamily buildings comes from a pool of capital made available from 39 investor banks. CIC is well on the way to meeting its goal of having $200 million available to continue the Multifamily Loan Program for another five years, through March of 2020, and to provide needed credit to underserved communities.

With $190 million in preliminary commit-ments, investors have shown continued support for CIC. The dollars will finance the acquisition and rehab of 7,500 affordable rental units. CIC is working closely with investor banks to confirm the commitments. Nearly all current CIC investors are renewing, and a number of new investors are poised to add their institutions to the pool.

While CIC has a variety of valued and effective programs, the Multifam-ily Loan Program is the foundation for all of our work. The program’s renewal will keep CIC lending in the communi-ties we have long served.

cic profile: ANDRE COLLINS

CIC DEVELOPMENTS | 4

How did you get into this business? I started my career as a financial statement auditor, travelling an average of three weeks out of the month. Two years after college, I bought my first home but thought it best to get rental income to offset the 75% loss on mortgage payments due to my extensive travel schedule. So I purchased a 3-unit building and learned that in addition to getting a solid understanding of how to acquire rental property, I had a passion for real estate. As a result, I purchased more rental properties, rehabbed buildings and developed new construction multifamily condominiums. I also moved from my day job as a financial statement auditor to an analyst/financing role for mixed-use real estate developments. Now I do acquisitions and dispositions for CIC.

How did you come to work at cic? While employed at Related Midwest, I worked with Jack Markowski on the affordable housing component of the Roosevelt Square Development. Later, at Quest Development Group, I worked with Jack Crane on financing potential developments. I developed a strong respect over the years for these two CIC people and their passion for community development. When I had an opportunity to work with them and to rekindle my passion for acquiring properties in a way that reminded me of the days when I began my personal real estate portfolio, I was excited to join CIC as the acquisitions manager in the 1-4 unit program.

What’s your favorite part of working at cic? The ability to create a significant positive impact in neighborhoods similar to those I grew up in is one of the primary reasons I work at CIC and have such an affinity to redevelopment of distressed real estate properties. CIC also has a good understanding of how real estate entrepreneurs operate, as well as the financing tools they require. The community development mission of CIC aligns well with the needs of real estate developers.

Understanding real estate and financing

Andre CollinsAcquisitions Manager, 1-4 Unit Properties

CIC Senior Vice President Michael Bielawa Sr. speaks at a program October 28 celebrating the first successful use of the City of Chicago TIF Vacant Building Rehab Program in front of a multifamily building at 1860 S. Komensky. As a partner in the Troubled Buildings Initiative, CIC/CII took over the property and marketed it for sale, and served as underwriter and administrator for the TIF grant. Pangea Properties purchased and rehabilitated the building, which now is fully occupied.

What changes do you see on the horizon for this business? Due to CIC’s new 1-4 unit loan program, I predict there will be a significant increase in smaller real estate investors becoming more savvy in their investment strategies as they take the next step of becoming a multifamily investor with CIC.

What is something interesting about you that most people don’t know?I’ve travelled to India to take pictures of one of the Seven Wonders of the ancient world and plan to travel more to capture more wonders.

cic celebrates TIF building rehab success

Jack MarkowskiCIC President

Let’s create great places to live and do business

affordable rental units, which cost about $40,000 to $50,000 per unit of private funds

Jack Markowski

In this yearend edition of CIC Developments, we review CIC highlights for FY 2014. Over the past year, a wide range of CIC programs and activities helped to preserve more than 9,300 units of affordable rental housing throughout the Chicago area.

While all CIC programs are aimed at preserving affordable rental housing and promoting community development, our activities vary widely across the region. As The Preservation Compact and DePaul’s Institute for Housing Studies have recently reported, strong markets have fully recovered from the 2008 real estate crash. Buildings are fully occupied; rents and property values are increasing. Residents of these communities enjoy a high quality of life. The challenge for CIC is to provide financial tools and other assistance to maintain good conditions and affordability in rental housing in these areas.

Our low- and moderate-income communities, however, present an entirely different story. In these areas, which contain a huge portion of our region’s affordable rental housing, we have seen foreclosure, abandonment, and population loss. While conditions have stabilized somewhat over the last few years, these communities still suffer from depressed property values and are prone to high vacancy rates and flat rents. A scarcity of credit makes it difficult to reverse neighborhood decline.

Some people say: “Given the population loss and the lack of market demand, why would you invest in pre-serving housing in low-income neighborhoods? We have excess housing stock, and it needs to be thinned out.”

Our answer is: “On a regional level, we do not have excess housing stock. In fact, the shortfall in the supply of affordable rental housing continues to grow.” The low- and moderate-income communities that are suffering from disinvestment contain thousands of

CIC DEVELOPMENTS | 5

to fully rehab. On the other hand, it can easily cost $300,000 to build a new apartment – and it requires government subsidies that do not exist.

Obviously, we don’t want to rehab and preserve apartments in communities where people don’t want to live. That’s why targeted community development is so important. This is where community development and preservation of affordable rental housing become one and the same. The greatest portion of our afford-able rental housing stock lies within our low- and moderate-income communities; the greatest threat to this stock is deterioration and disinvestment; we need to make the communities great places to live and do business in order to preserve their rental housing.

At CIC, we’re working with the City of Chicago on the Micro Market Recovery Program and the TIF Vacant Multifamily Rehab Program. From bank investors, the MacArthur Foundation, and the Illinois Attorney General, we’ve secured new resources to address 1-4 unit buildings. And we are working with all of our bank investors to secure $200 million to acquire and rehab apartment buildings over the next five years.

Thanks to all of our partners, and thanks especially to the developers who work in the trenches and put their own time and money at risk. CIC will continue to aggressively pursue preservation of affordable rental housing and community development throughout the Chicago area.

Energy upgrades payable on utility bill

Recent legislation enacted by the Illinois General Assembly allows multifamily building owners to pay for certain energy retrofit improvements with unsecured loans that are repaid with monthly property utility bills. CIC has added “on-bill” financing as an option for multifamily buildings in Chicago, Rockford, and the counties of Cook, DuPage, Kane, Kendall, Lake, McHenry, and Will.

CIC/Energy Savers is accepting on-bill loan applications. On-bill loans are available for properties with five to 50 dwelling units, for loan amounts between $20,000 and $150,000, and for terms of 7 to 10 years. The utility companies serving the area in which the property is located designate eligible measures, including heating and lighting upgrades, that can be financed with on-bill loans.

On-bill loans do not have a second mortgage or lien recorded against the property. The on-bill interest rate is fixed at 5.99%. All on-bill properties can get a free energy assessment by Elevate Energy (855.372.8377).

CIC continues to offer secured Energy Savers loans with 3% fixed interest rate and 7-year term for the retrofit of residential properties with at least five units in the 7-county Chicago area and the city of Rockford.

For more information, contact Jim Wheaton at 312.870.9928 or james.wheaton@cicchicago.com.

222 South Riverside Plaza, Suite 2200 Chicago, IL 60606-6109

cic Community InvestmentCorporation

Non-Profit Org.U.S. Postage

PAIDChicago, IL

Permit No. 8493312.258.0070www.cicchicago.com

What’s Inside December 2014

cic acts on 9,375 units page 1

Affordable housing in demand

page 3

Loan pool renewal on trackpage 3

cic profile ofAndre Collins

page 4

President’s messagepage 5

Call a cic Loan Officer for details 312.258.0070

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