Local Government Funding for Housing Development in Chicago: A Comparison of Funding for Nonprofit and For-Profit Groups

Abstract

This article compares City of Chicago Department of Housing (DOH) funding for nonprofit organizations with the city's funding of for-profit developers, finding that DOH provides more generous funding for for-profit groups through its flagship program. Nonprofits receive more overall money through the other two programs analyzed, though the subsidy differences are more ambiguous than in the flagship program. The study determines that important distinctions exist between the rental products produced by nonprofit and for-profit housing development groups in Chicago. Nonprofits tend to employ DOH funding to reach the lowest income households, whereas for-profits seek moderate-income renters in more stable neighborhoods. These distinctions begin to break down, however, when the funding structure requires all recipients to produce very low rents.

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