Small landlords who charge affordable rent struggle to stay afloat

When people think of the beloved small businesses in their neighborhoods, they likely picture the cupcake shop and the bookstore. These businesses enrich our communities, but there’s another small business owner who provides something far more essential: housing.

Landlords — though a more descriptive term with less baggage is “small housing provider” — who own a handful of Chicago’s iconic six-flats or similar smaller buildings are crucial to our housing ecosystem.

While many associate affordable housing with government-subsidized buildings, most low- to moderate-income families in Chicago rely on naturally occurring affordable housing (also known as NOAH): privately owned, unsubsidized housing that is affordable without government intervention. This housing accounts for 75% of affordable rental housing nationwide, and in Chicago, much of this is in smaller buildings.

For instance, in 2021, 30.7% of Chicago’s units that cost less than $900 a month in rent were in two- to four-unit buildings, and most of these are owned by housing providers who operate fewer than 10 buildings.

But these small building owners face mounting challenges. On the two- to four-unit side, buildings are disappearing as they’re converted into single-family homes.

Within the multifamily building sector, rising costs and limited financing are forcing some small owners to sell to larger investors, many from out of town. If they sell and Chicago loses more small owners, rents will likely increase and the need for government resources to bridge the gap — potentially not an option under the incoming presidential administration — will grow.

It's unclear what will happen in the second Trump administration. Perhaps already scarce housing subsidies become scarcer. Regardless, local support for natural affordable housing is more important than ever. We must support the small building owners who are quietly preserving affordable housing in our city.

On a federal level, it’s crucial that small building owners have the same access to benefits, through the Small Business Administration, that other small businesses have.

Another hurdle is access to capital, especially if small housing providers operate in disinvested communities like the South and West sides. Financing is crucial for purchasing and rehabilitating the thousands of affordable rental buildings in our neighborhoods.

Community development financial institutions are critical. As nonprofit, mission-driven lenders, we know our markets and borrowers very well. We can finance smaller, local development projects, including affordable housing, when larger banks cannot.

These institutions also work more closely with their borrowers, ensuring small building owners have the tools and knowledge to succeed as property owners.

Which is another key piece of the puzzle: education. My organization, the Community Investment Corporation is one of the community development financial institutions that works closely with our borrowers. We offer property management training to help housing providers develop skills to maintain safe and strong housing.

Such training programs should be more available across the country, to ensure all housing providers are equipped to be good stewards of their properties.

Finally, until recently, many local and statewide politicians crafted affordable housing policies without input from natural affordable housing owners. To safeguard these small landlords, we need to give them a voice at the table before decisions are made.

Small, responsible building owners may not have the charm of the cupcake shop or the nostalgia of the neighborhood bookstore, but their contributions to our communities are just as vital, if not more so. It’s time we recognize them as pillars of our neighborhoods. We can preserve Chicago’s stock of affordable housing and keep our neighbors in safe, stable homes.

Stacie Young is president and CEO of Community Investment Corporation in Chicago.

The views and opinions expressed by contributors are their own and do not necessarily reflect those of the Chicago Sun-Times or any of its affiliates.

The Sun-Times welcomes letters to the editor and op-eds. See our guidelines.

Get Opinions content delivered to your inbox.