Red Star Bulletin Issue #9

Welcome to Issue #9 of the Red Star Bulletin!

The aim of this bulletin is to bring Chicago Democratic Socialists of America members a regular round-up of important legislation, committee meetings, and other updates from City Hall, as well as analysis of what this means for our organizing as socialists.

Make no mistake: the City Council is not friendly terrain for us. We must first and foremost continue to build power in the places it derives from–our workplaces, our neighborhoods, and the streets. But we hope to give CDSA members information they need to assess the electoral project we’re embarking on, and to continue building it into a powerful vehicle for working-class politics in our city.


The Battle for the Future of Woodlawn on Chicago’s South Side Rages On

The Obama Community Benefits Agreement (CBA) Coalition, Southside Together Organizing for Power (STOP), and Jeanette Taylor, alderwoman of the 20th Ward, have been fighting for a CBA to protect the neighborhoods surrounding the impending Obama Presidential Center (OPC) from rising rents and displacement. In July 2019, Taylor introduced a community benefits ordinance (O2019-5589) in the city council. It has the endorsement of 29 aldermen.

Mayor Lori Lightfoot has not met the proposed CBO with open arms. Instead, in a move described by Taylor as a “smoke-and-mirrors” ploy, Lightfoot introduced an alternate version on Tuesday, February 25, after announcing the broad planks of the plan in January.

Taylor’s ordinance includes setting aside 30% of new or significantly rehabbed developments for affordable housing, creating the right of first offer for tenants, developing a community trust fund, freezing property taxes, and establishing an anti-displacement task force.

Lightfoot’s ordinance includes $4.5 million in spending across six “key components”: allowing tenants right of first refusal, expanding Rahm’s Preservation of Existing Affordable Rental (PEAR) program, offering grants for longtime residents to repair their homes, creating a “residential acquisition and rehabilitation revolving finance facility,” developing parameters for selling and developing city-owned land into affordable and mixed-income housing, and enhancing local hiring requirements for development.

The starkest difference between the plans is the area covered. Taylor’s version would protect a two-mile radius around the OPC, encompassing parts of South Shore, Washington Park, and Woodlawn. Lightfoot’s proposal only includes properties within Woodlawn (originally, the Mayor’s plan was limited to three-fifths of a mile). That is an insufficient area of protection, considering the evidence of rising housing costs and resulting displacement surrounding new development in other neighborhoods of the city.

The right of first refusal for tenants requires landlords within the protection zone to offer current tenants the option to purchase their home before the owner can sell to a private developer. While it may help some residents, this provision only develops teeth when coupled with the other prongs of the original ordinance. Many tenants in the areas susceptible to increasing rents don’t have access to the capital necessary to purchase their home; as it stands now, 62% of Woodlawn is cost-burdened by rent, meaning that they pay at least 30% of income for housing. Without the other tenets of her ordinance, as Taylor put it, “this doesn’t protect anybody.”

The other discrepancies between Ald. Taylor’s proposal and Mayor Lightfoot’s aren’t so much differences as they are conspicuous absences from the Mayor’s proposal. Taylor’s robust ordinance does not give developers the option to pay a fee to exclude affordable housing. It requires two and three-bedroom units in larger developments and sets aside all city-owned vacant residential land for affordable housing.

The city’s special consideration, however, is to require newly-constructed complexes with more than 15 units to set aside 20% for affordable housing. Of the 20%, Lightfoot wants to require buildings to reserve 5% of units for those earning less than 50% the average median income (AMI), and 5% for those earning less than 30% AMI. Enforcing this requirement on new developments built only on city land falls quite short of requiring 30% of all new development to be affordable.

Outside of complexes being built on city-owned land, the Mayor intends to lean on Chicago’s Affordable Requirements Ordinance (ARO), which requires developers seeking zoning changes or financial assistance from the city to allocate a certain percentage (usually 10%) for affordable housing. There is, of course, an alternative for developers: they can pay a fee that goes into a fund ostensibly used for affordable housing. Unsurprisingly, many developers opt to pay the fee. The impact of this loophole is becoming clearer as the city becomes more transparent.

The Chicago Housing Initiative reports that the ARO has generated a paltry 444 affordable units between 2007 and 2017. Of those, only 22 had three bedrooms. At a time when 51% of Chicago households are cost-burdened by housing and the city’s black population is being forced out in record numbers, Chicago must prioritize increasing affordable housing stock and protecting current residents.

Lightfoot’s ordinance also fails to establish a community trust fund. Under Taylor’s ordinance, the trust would be used to help longtime residents with home repair, property tax relief, and rental assistance; it would form community land trusts, co-ops, and affordable housing developments; and offer job training and workforce development.

Lightoot’s plan does call for “enhancing local hiring requirements” and providing grants for longtime homeowners to repair their homes. Those who have owned their home ten years or more and make less than 120% AMI would be able to apply for up to $15,000 from a pool of $1 million. The mayor’s plan also allocates $500,000 to Renew Woodlawn, a program intended to help people with low and moderate incomes buy homes.

Jeanette Taylor is operating with a clear dictate from her community: making the city more equitable for black and low-income people. Lightfoot appears to be playing the cynical role of the ‘adult in the room.’ It seems that little has changed from the Emanuel administration, as the other two components of the Mayor’s plan—expanding the PEAR program with a $1.5 million transfer from the ARO fund and creating a finance facility with another $1.5 million—are both fundamentally market-based ‘solutions’ designed to deal with market-created problems.

The Mayor boasts that her agenda has the support of the community. She intends to push her plan through quickly; residents only had until March 6 to submit their input. The ultimate fate of working-class people near the OPC still hangs in the balance. While Taylor seems to think there could be a path forward working with the Mayor, negotiations could fall apart quickly—or, just as likely, the concessions may be untenable for socialists.

Lightfoot TIF Reform Plans Announced
In February, Mayor Lightfoot introduced a plan for reforming Chicago’s Tax Increment Finance (TIF) program. According to a press release scant on details, the plan calls for more transparency, tighter review standards, and more focus on neighborhoods and equity. TIF works by changing the way property tax is diverted. TIF districts are created by the city council and must comply with state laws that limit them. In practice, these laws are sufficiently loose to allow a district to be created almost anywhere.  When a district is created, the dollar amount of the property tax levy from the area is frozen as a base value for the duration of the TIF district (typically 23 years). As property values increase due to inflation and other factors, the difference between the corresponding increased amount of property tax and the base value amount (this is the “tax increment”) is used to fund projects within the district. Often, the city borrows against the future value of the district by issuing bonds and using yearly TIF income to service these loans. This fund is used for infrastructure, affordable housing, subsidizing private development, and public capital projects like parks, school buildings, and transit facilities. It is this last item that has brought the most scrutiny from activists (including the Grassroots Collaborative and the Chicago Teachers Union), who charge that the subsidies are unnecessary and unethical handouts to developers and real estate companies.

Although TIF districts are now a frequently-used funding mechanism across towns and cities of all scales, the scope of Chicago’s TIF use is exceptional. According to City Lab, in 2017, Chicago had 143 TIF districts, which generated $660 million–equivalent to more than 10% of tax revenues in the city. The suburbs have followed suit; of the $14.4 billion collected for property taxes in Cook County, $1 billion was diverted to TIFs. Unlike property taxes, which are levied for a specific purpose, program, or municipal entity, these TIF dollars amount to a slush fund disbursed according to the rules of local power politics. Developers are often the beneficiary; as can be seen by examining the interactive TIF portal.

TIF funding in Chicago has long been shrouded in secrecy, likely in order to keep sweetheart deals away from the public eye. Thus, Lightfoot’s move to bring more transparency into the process is welcome, although it remains to be seen whether it will actually result in more accountability and democratic control over these programs. Both the Emanuel and Daley administrations, after some cajoling by the city council in 2009, implemented TIF transparency initiatives that have not stopped the funneling of funds towards private development. More information is certainly helpful to activists, but it does not fundamentally change the rules of the game; developers will still have the initiative in seeking funds, leaving opponents with only the choice of how to react. Transparency in public finance might be fundamental to democracy, but it does not replace it.

The other major aspect of Lightfoot’s proposed reform has to do with how projects meet the criteria to be eligible for funding. By statute, private developments that receive TIF funding must demonstrate that they would not be viable “but for” TIF assistance. The intention is to incentivize private development to promote economic growth, but avoid handing public money over to companies that don’t need it. However, the criteria for making this determination are notoriously loose and prone to exploitation. For instance, it recently came to light that the study the city council members relied on to determine whether or not The 78 development was viable without TIF money was commissioned and paid for by Sterling Bay–the very developer requesting funds, an obvious conflict of interest.

Lightfoot is seeking to strengthen the “but for” vetting process in an explicit bid to improve social equity. In principle, this is a welcome move consistent with Lightfoot’s claim that in spite of her crucial support for Lincoln Yards, developers should “enjoy this moment in the sun because you’re never going to get a deal like this again out of the city of Chicago as long as I’m mayor.” However, the Mayor’s office has outsourced the development of these criteria to AECOM, a multinational engineering, planning, and construction corporation with a history of gobbling up smaller companies and squeezing dollars out of public coffers under dubious circumstances. AECOM is the company responsible for the construction of Chicago’s controversial new Fire and Police training academy, which received TIF funding and was opposed by a large coalition of social justice organizations including the Chicago DSA. AECOM has also received lucrative contracts for the construction of prisons in New York City. Since 2000, they have racked up $133 million in fines for fraud, making false claims, and various employment and environmental violations.

It is unconscionable that in an effort to end graft and improve social equity in TIF distribution, the mayor has tapped a company with direct interest in courting TIF dollars, a track record of facilitating injustice, and a history of defrauding the government. It is unclear exactly how and why exactly AECOM was selected over the city’s own planning department, or an entity with a less problematic position. We can only speculate that it was out of a technocratic predilection for expertise. Certainly AECOM is an expert in TIF funding, just as a fox is an expert on hen houses.

There are other aspects to Lightfoot’s proposed slate of reforms, but the details on these remain sketchy. Notably, Lightfoot’s press release flags an interest in lobbying for changes in state law that would allow money generated in downtown TIF districts to be spent in outlying neighborhoods–an initiative similar to Rahm Emanuel’s Neighborhood Development Fund. While redistribution from the central business district into communities that have faced systemic disinvestment is desirable, it matters whether it is done in the name of opening up new real estate markets for developers or for the benefit of working class Chicagoans.

There is no doubt that TIF funding has resulted in significant sums of money being spent on projects that benefit the public good, particularly affordable housing, parks, and new schools. However, there is little evidence to suggest that these projects wouldn’t have been carried out anyway if property taxes had been levied normally. Certainly, their use as a vehicle for incentivizing private development creates too many opportunities for misuse, particularly when studies are at best ambivalent on their overall effectiveness in generating the promised economic benefits. Even with sorely needed reforms, the problem with the TIF structure is the underlying assumption that urban development must work through the wasteful practice of subsidizing private profit and placing the public trust in the hands of developers. Our call must be for investment in our communities, not by begging the wealthy for breadcrumbs, but through progressive taxation and the allocation of funds through truly democratic processes to the benefit of working-class Chicagoans.

What Bernie’s Green New Deal Means for Chicago’s Working Class
Bernie’s $16.3 trillion Green New Deal is not just the most ambitious and sweeping climate plan put forward in this presidential race; it’s a recognition that the climate crisis touches all of our lives in real and immediate ways, and that we can’t have environmental justice without economic justice or economic justice without environmental justice.

With an investment nearly ten times more than the one proposed by Joe Biden, Bernie’s plan will benefit all of us, concretely improving our lives and transforming working-class communities across Chicago—because the climate crisis isn’t ‘out there’; it’s right here, and so are the changes we need to make for a livable future.

Weatherizing and Electrifying Homes. In a city like Chicago, keeping your home warm in the winter and cool in the summer is not only a challenge; it’s a matter of comfort, health, and safety. Older buildings in working-class communities can be some of the leakiest and most energy-inefficient. As of 2017, Chicago had 1.3 million housing units. 1 million of those units were multifamily housing. More than 75 percent of that multifamily housing was built before 1942. Bernie’s plan provides more than $3 trillion in grants for for low- and moderate-income families and small businesses to weatherize and retrofit their homes and businesses, to switch to more affordable and climate-friendly electrical energy for heating and cooling (rather than oil, propane, or fracked natural gas), and to help pay their heating and cooling bills.

Making Housing Affordable, Modern, and Green. Bernie’s Green New Deal will invest $180 billion to make all public housing comfortable, beautiful, and sustainable. For the more than 20,000 Chicago families living in public housing, that would mean on-site renewable energy, grocery stores, community gardens, and childcare—with massively reduced costs and carbon emissions as well as thousands of new jobs with an emphasis on hiring public housing residents. At a time when more and more two-, three-, and four-flat apartments are converted into luxury condos and affordable housing in Chicago continues to decline—with a 180,000-home gap between the need and the availability of affordable units in Cook County—Bernie’s plan will build 7.4 million affordable housing units across the country.

Transforming Transit. More than $3 trillion will be spent to transform personal and public transit for all. Bernie’s plan will provide over $2 trillion in grants to help low- and moderate-income families trade in dirty cars for electric ones, invest $100 billion to make sure the cost of new electric cars is no more than $18,000, and direct $85 billion to building an electric vehicle-charging infrastructure similar to the gas stations and rest stops we have today, so we can all get around easily and sustainably. It will also invest over $400 billion to help agencies like CPS and the CTA replace all existing buses with electric buses, which will not only make our city cleaner, but also improve our health and our children’s ability to perform in school. More than $900 billion will be spent to improve the CTA and other local public transit, and to build a national high-speed rail network with Chicago as a regional hub linking a dozen Midwestern cities.

Investing in Our Communities. Rather than waste billions sending working people overseas to protect the global oil supply, Bernie’s plan will scale back military spending and invest in working-class communities here at home. That includes a $40 billion fund for local climate resiliency and environmental restoration projects, focusing on places such as the recently shuttered Fisk and Crawford coal plants in Pilsen; nearly $35 billion to make sure everyone has clean water, including in the more than 500 Chicago public schools where testing has found lead in drinking water; equitable funding for local parks and public lands, including in urban communities like ours; and $150 billion to help cities and states build publicly-owned broadband networks so we can make the internet freely available to all—especially in neighborhoods like Englewood, Auburn Gresham, and South Shore, where about half of all households lack internet access.

Putting Power in the Hands of the People. The Green New Deal will make sure the transition to a sustainable economy is fast and fair, spending over $2 trillion generating and storing affordable and publicly-owned renewable energy, rather than waiting on private companies whose main goal is profiting off us. And as we fight to #DemocratizeComEd here in Chicago—to put people and the planet over profit by taking over a scandal-ridden company whose shareholders enjoy over $200 million in profit each year which comes straight from our energy bills—Bernie’s Department of Energy will provide support and assistance to cities and states seeking publicly owned energy utilities.

The climate crisis requires rapid and large-scale transformation over the next decade. Bernie’s Green New Deal ensures that transformation touches us all and helps Chicago’s working class for the long haul.

The Red Star Bulletin was conceived by Ramsin Canon and is a project of the Political Education & Policy Committee. This issue was drafted by CDSA members. Special contributions were made by Rebecca Burns, Pat Chesnut, Keefer Dunn, Brent Glass, Nick Hussong, Liz Kantor, Charlotte Kissinger, Leonard Pierce, and Sveta Stoytcheva. Graphics were contributed by Patrick O’Connell. If you would like to contribute to the Red Star Bulletin or have any feedback, email politicaleducation@chicagodsa.org.