Adrienne Nelson was living with her sister in a studio apartment in the Uptown neighborhood. They were comfortable, getting by on their dual incomes, paying off bills both old and new. Their monthly rent and utility costs were around $1,200. They called that studio home for nearly 10 years.
But then, in a matter of months, Nelson found herself “homeless and sister-less,” she said.
She lost her job, her sister died and she could no longer afford to pay the rent. She wound up couch surfing with friends and in a homeless shelter for about a year and a half. Nelson said she felt “desperate and lost.”
While living at the shelter, she got a call to let her know that she would be receiving a subsidized housing unit.
“I said ‘Yahoo!’ at the top of my voice,” Nelson said. “The nervousness of how am I going to survive” eased.
Now 68 and retired, Nelson has lived in a subsidized one-bedroom unit for about 10 years in Uptown and relies on her roughly $1,000 monthly Social Security payments to afford her approximately $230 monthly portion of rent and other expenses.
Nelson’s housing subsidy comes from the Chicago Low-Income Housing Trust Fund, an organization in charge of funding and administering more than 3,000 rental subsidies for individuals and families to use in the private market, including migrants.
The trust fund is staring down an estimated $10 million shortfall for its $14.1 million 2025 budget as two of its funding streams have dried up. That number represents subsidies for about 600 units. The trust fund said it has sufficient reserves to fill the budget hole for this year. It has also begun a subsidy attrition plan for units that are or will become vacant as of Jan. 1 (the start of its new budget cycle) to reduce costs. About 16% of those subsidies will not be subject to attrition as they are part of a special program serving those with specific needs.
But questions loom large for the future of the nonprofit, which has recently experienced significant board turnover, lost its executive director and is struggling financially as the city and state face serious fiscal challenges that are being exacerbated by a federal government focused on big budget cuts. Other area housing agencies such as the Housing Authority of Cook County are experiencing funding issues, causing them to pull back from their own housing subsidy programs.
Founded in 1989, the trust fund gives landlords subsidies for specific units to rent to low-income residents, with a focus on serving those making 0-30% of the area median income. In 2024, according to the trust fund’s annual report, the maximum eligible income for a single individual and for a family of four was $23,550 and $33,630, respectively. Renters in trust fund units pay a heavily subsidized portion of rent based on their annual income and unit size.
The nonprofit receives half of the city’s Affordable Housing Opportunities Fund, dollars supplied by developers who pay in lieu of building the affordable housing required at their project sites by the city’s Affordable Requirements Ordinance. Since the state passed a 2021 law incentivizing developers to build affordable housing on-site by offering property tax abatements, the in-lieu fee pot has significantly diminished.
While trust fund leaders, city and state officials and housing advocates support the increase in affordable housing development, they say rental subsidies such as the trust fund’s program need to be sustained because they support the lowest income people in the state.
The trust fund also relies on the state’s recordation fees charged when properties are bought and sold. While the state doubled the recordation fees charged in 2023 from about $9 to $18 with the goal of providing more cash to groups like the Chicago trust fund in the statewide rental subsidy program, the real estate market has slowed significantly in recent years as mortgage rates have risen and housing inventory has shrunk, causing those fees to diminish.
“We have prepared for this moment,” said Monica Watson, the trust fund’s interim executive director and chief of staff. “We will continue to provide affordable housing for the citizens of Chicago. … We’re going to do everything we can to make sure there is no displacement.”
The Chicago Department of Housing did not make Commissioner Lissette Castañeda available for an interview. In response to written questions from the Tribune, the department said, “We appreciate CLIHTF’s diligence in prioritizing that no one is being actively displaced by these changes.”
Funding challenges
The Chicago Low-Income Housing Trust Fund’s budget has fluctuated over the last 10 years, ranging from as low as $9 million to as high as $31 million. It has always relied on unsteady funding streams and survived a lawsuit against the state that caused its state dollars to be inaccessible for a couple of years about a decade ago.
In an effort to help with the budget issues, the city has allocated $5 million in corporate funds to the trust fund every year since 2020. Asked if more could have been allocated, the Department of Housing said it could not speak to funding decisions prior to 2024 but that in a “particularly challenging budget year, we were proud to preserve the full $5 million allocation.”
The trust fund’s 2025 budget was approved with the projected $10 million loss due to a reduction in city dollars from the developer fees fund and increases in rental subsidy payments to keep their rates competitive with the market, said Andy Geer, the trust fund’s board chair.
The nonprofit’s state funding did increase between 2023 and 2024 thanks to the doubled recordation fees but has still been stymied by a lukewarm real estate market. The state also recently conducted its five-year recalculation of the distribution of funds, based on U.S. Census Bureau data for population estimates, for the statewide rental subsidy program, which led to a decrease in the percentage of cash flowing to the Chicago trust fund, Geer said.
While the trust fund has been aware that its funding streams have been particularly unstable in the last few years, it still was growing its subsidy program until last year. The group has not spent all its money, Geer said, and instead built up its reserves from around $32 million in 2020 to about $70 million at the end of 2024.
The trust fund has about $56.8 million in cash reserves, with the rest taking shape in the form of loans offered to developers and owners who provide affordable housing. So far this year, the nonprofit has dipped into its reserves for roughly $2.7 million.
In 2024, the trust fund created a five-year strategic plan that included prioritizing securing options to diversify its revenue streams to ensure financial stability.
The housing department and the trust fund agreed, Geer said, that by the 2026 budget process, the nonprofit’s structural deficit created by the lack of city funds needed to be addressed. They have now been meeting on a monthly basis to “work through what is going to be a longer term solution,” he said.
One of those solutions has been to take back unused subsidies from property owners and managers. So far, the nonprofit has taken away 37 subsidies this year.
Other remedies could come from philanthropic sources, the legislature and/or through further attrition.
The housing department said it is in the “very early phases” of working with the trust fund to approach philanthropic sources for funding support. If the trust fund does need to start fundraising to maintain its budget, Geer said the nonprofit would need to hire additional staff.
The trust fund retains a Springfield lobbyist and has spent $20,000 through April of this year on those efforts. The lobbyist was initially hired around the time of the lawsuit and was kept on to lobby for the recordation fee boost, Geer said, as well as other relevant legislative issues to the trust fund. Geer said the trust fund will not be advancing anything legislatively this year.
State Rep. Will Guzzardi, a Chicago Democrat who was the housing committee chair when the property tax incentive and recordation fee bills passed, said he was surprised by how successful the tax incentive has been at getting developers to build affordable housing. He said an effort is “underway to look for a solution” to the revenue issues.
“It’s a real challenge,” Guzzardi said. “And we don’t want to undo the really successful affordable housing incentives that we’ve passed. But we do need to make sure that very low-income families get the subsidies they need to stay stably housed.”
Leadership turnover
The budget struggles come as the trust fund recently lost its eight-year executive director and as Mayor Brandon Johnson appointed an almost entirely new board last month.
Annissa Lambirth-Garrett, who served as executive director of the trust fund before her departure in March, declined to comment on the organization’s financial standing. She said her departure did not have to do with the organization or its budget; it was simply a better opportunity. She is now the CEO of a housing nonprofit in Columbus, Ohio.
Watson told the Tribune she would like to become the permanent executive director to ensure “leadership continuity” to support staff as the nonprofit is already undergoing a significant transition at the board level.
The trust fund’s 15-person board has gone without a full slate of members since 2022, said Geer, who has been on the board for about four years and will stay on the board until the 15th board member is appointed. He said the organization had been asking the city to appoint new board members since then. It did not receive new board members until April when 13 new individuals were appointed and one reappointed.
Asked about the delay, the housing department said it worked “diligently” with the mayor’s office to “to identify strong leaders for the organization during this critical time, collaborating with Alderpeople to ensure appropriate representation from across the City.”
The nature of the turnover “reflects a strategic move to ensure CLIHTF is well-positioned to meet its goals and serve the community,” the housing department said.
The board transition, Geer said, has made it difficult to move quickly on the trust fund’s financial issues as the new members are “getting up to speed.” But, he said, residents and their housing stability remain at the top of the group’s priority list.
Future uncertain
Housing advocates and providers both are concerned about the future of the trust fund.
The majority of the trust fund’s subsidies are used on the city’s South and West sides. Some advocates are worried about what the loss of those subsidies would mean to those historically underinvested in communities.
“If we diminish resources for this program, we are diminishing resources for the Black community,” both tenants and landlords, said Mary Tarullo, director of city policy with Chicago Coalition to end Homelessness.
As of this month, the trust fund works with 655 landlords in its rental subsidy program.
Trent Anderson, who owns and manages hundreds of units, is about to lose two of his 143 trust fund subsidies spread across the South and West sides.
“It sucks for me because I have partnered with the trust fund for a long time,” Anderson said. “(The subsidies) provided a certain amount of stability for the building, which is going away.”
Mark Angelini, the president of Mercy Housing Lakefront, a nonprofit housing provider that also offers support services, subsidizes 120 of his 5,000 Chicago-area affordable units with trust fund dollars. Most of the subsidies are in buildings in Uptown, such as Nelson’s apartment. Mercy Housing Lakefront has worked with the trust fund for at least 20 years, Angelini said, and has not lost any units to attrition yet.
In the event that his organization does lose trust fund subsidies, Angelini said it could tap into lines of credit to keep units affordable and maintain building operations in the shorter term. The organization is also in conversation with its other subsidy partners to see if they could help cover costs for the longer term.
Watson, the trust fund’s interim executive director, said she is concerned but “optimistic” about how to get the organization out of its financial plight.
“We will not be deterred in any way.”