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The City’s Reparations Subcommittee held a meeting by zoom on June 19, and the discussion focused almost entirely on a revised draft of a Home Buyer Assistance Benefit Program. The program, as modified by the Subcommittee, will help first-time home buyers with a down payment up to $25,000. As proposed, to qualify for the assistance, a home buyer must be a Black resident who suffered discrimination by the City, or be a descendant of a Black resident who suffered discrimination by the City in the period 1919 to 1969.

The funding will come from the City’s Reparations Fund. Last November, City Council decided to deposit into a Reparations Fund up to $10 million in City tax revenues collected from the sale of recreational marijuana.  Council also created the Reparations Subcommittee and asked the committee to consider the viability of two recommendations: 1) housing assistance and relief initiatives for Black residents in Evanston and; 2) various economic development programs and opportunities for Black residents and entrepreneurs in Evanston.

Three aldermen serve on the subcommittee: Robin Rue Simmons (5th Ward); Peter Braithwaite (2nd Ward); and Ann Rainey (8th Ward).

The Home Buyer Assistance Program

“Based on the community feedback process that we had last summer, we had dozens of recommendations for remedy policy, and one that was a priority was housing,” said Ald. Simmons, Chair of the Subcommittee. “So with that we’re moving forward prioritizing housing and business. But we’re starting with housing.”

Referring to the reduction in the Black population in Evanston in recent years, she said, “It’s important that we focus on that. We can retain our Black community, we can invite Black Evanstonians back home, we can welcome them home with initiatives that help them have ownership in our community, help them and their families build wealth, give us the voice that we should have here in this community.”

Nick Cummings, Deputy City Attorney, summarized some of the program’s key provisions in the revised draft, as proposed to the Subcommittee. He said the program is substantially similar to some federal programs, such as Community Development Block Grants. The proposed budget for the program is $250,000.

He said the program would be open to first-time homebuyers purchasing property in the City of Evanston to be used as their principal residence. Under the proposal, the homebuyer would be provided down payment assistance in the amount of $10,000. The assistance would be in the form of a no-interest forgivable loan, which would be funded from the City’s Reparations Fund.

Unlike the first draft of a homebuyer assistance program, there is no requirement that the first-time homebuyer purchase property in the Fifth Ward, but they could purchase property anywhere in the City. An eligible property includes a single family home, a one- to four-unit building, a townhome or a condominium.

Mr. Cummings said the down payment assistance is to remedy “historical segregation” that has taken place in Evanston, resulting in “heavy concentrations of black residents in singular areas.” He said, “This is to try to help provide availability of diversity across the City.”

Under the proposal, a home buyer must agree to own and occupy the home as their principal residence for 10 years, and the loan would be forgiven on a prorated basis over the 10 years. If the buyer sells his or her home before the 10 years are completed, the buyer would be required to repay the amount of the loan that was not forgiven at the time of the sale. That amount would be put back in the Reparations Fund.

Mr. Cummings said, “Certain circumstance may arise where the City would provide a waiver where a buyer needs to refinance. It might not be a hard and fast rule.”

He explained why the benefit would be provided as a forgivable loan rather than a grant. He said grants can often be considered taxable income, and if it’s a forgivable loan, “It doesn’t count as income and there’s no tax consequence to them.”

Eligibility of the Homebuyer

The proposal limits the homebuyers who may qualify for the down payment assistance. The proposed eligibility criteria are:

“Applicants must meet the following criteria:

“a. Be a Black resident; and

“b. suffered discrimination in housing as a result of City ordinance, policy or practice; or

“c. is a direct relative to a Black Evanston resident who resided in Evanston between 1919 to 1969 who suffered discrimination in housing as a result of City ordinance, policy or practice.”

Ald. Simmons said the City’s law department prepared the criteria. She said, “We have to deliver this program in a way that it can be defended based on the documented historical policy, practices and actions on behalf of the City of Evanston …”

She asked Mr. Cummings to explain. He said, “The 50 year timeframe that we came up with is based on some research that staff has done as well as some outside [people] that have helped us out in terms of identifying discriminatory practices by the City during that time frame. That is not to say that there are not City practices that continued to have a disparate impact on Black residents in the City of Evanston. But we don’t know about it. So right now we’re still trying to collect this information, and if there is a Black resident that came to Evanston after 1969 and there was an incident of discrimination in housing as a result of some City ordinance, policy or practice, we would want that brought to our attention as part of the eligibility criteria. And even as recent as the 90s or 2000s, if this was happening that’s something we need to know about so it can be rectified. That’s the whole purpose of the program, to try to rectify past wrongs on behalf of the City.

“With respect to proof, to be perfectly honest, we’re still building that out. Part of that, though, is we need to understand what all the City has or has not done. When we have a full understanding of that, it will enable us to show how people can …

Mr. Cummings mentioned an article discussing that there was a displacement of Black residents, and “the City issued licenses to developers to actually physically move people out of one place and place them in another. That would be some good evidence of proof of discrimination there. Again we’re still trying to build this out. This is a proposal at this point. But these are some of the things we’re looking at. We’re still looking for additional resources to help us understand the extent of the City’s complicity in the discrimination.”

Amendments to the Proposal

Subcommittee members focused on two aspects of the program, the amount of the down payment assistance set at $10,000, and the total budget set at $250,000.

Ald. Rainey said regarding the $10,000, “I don’t think that in terms of assisting with a down payment that’s going to be that helpful in this day and age, with the cost of housing.

“If we’re going to make an impact, I think the very minimum should be $25,000.”

Ald. Rainey said if the benefit was higher it would increase the buyer’s chance of obtaining a mortgage loan, and also help to reduce their monthly payment.

Ald. Braithwaite asked, “Could we amend the language to be ‘up to $25,000.’ It gives us flexibility. What would we need to add to go ‘up to’ that dollar amount.”

Mr. Cummings said they would need to add some criteria to use in deciding on the amount.

The members of the Subcommittee decided to change the down payment assistance from $10,000 to “up to $25,000” and to consult with a lender to assist in defining the criteria to use in deciding on the amount. They decided not to use a percentage of the purchase price as a criterion.

Ald. Simmons said the proposed budget of $250,000 was based on an estimate of the amount of sales tax revenues that would be generated on the sale of cannabis and that would be remitted to the City this fall.

When Ald. Rainey said based on more recent information that she projected it would be $400,000 by November, Ald. Simmons suggested raising the budget of the housing assistance programs to $400,000. She said if the City does not collect the $400,000 by November, “It is coming. Folks are buying cannabis. If we don’t get it in this calendar year, we certainly can make this program available in the future.”

Ald. Rainey added, “As the money comes in we can administer the program.”

Ald. Simmons moved to increase the budget to $400,000, noting that it included not only the homebuyers benefit, but also the proposed benefit to help new and existing homeowners to preserve, rehab or renovate their homes.

The motion passed.

Next Steps

Staff was asked to submit a revised Homebuyer Benefit Program at the next Reparations Subcommittee meeting and a proposal for a benefit to preserve, rehab or renovate homes of existing new or existing homeowners at the following meeting.