Landlords get funding boost from new Illinois Rental Housing Support Program Act
By Celeste Ntuen
Illinois landlords, housing developers, and tenants are getting a funding boost from recent changes to the Rental Housing Support Program Act (310 ILCS 105/1). Illinois legislators have changed the law that was enacted on Jan. 1 to allow more flexibility in funding distributions to landlords, housing developers and renters.
For some background, landlords and housing developers are affected by the market, and by how many tenants are available to make payments. Landlords and housing developers use rent payments to maintain the rental unit, pay property taxes, and reinvest in their community. There are many areas of Illinois where large numbers of renters are unable to secure affordable housing. Therefore, by subsidizing rent, the new state law limits declining property values, tenant turnover, rental vacancies, and the often-unstable income threat faced by rental property owners.
The law also provides funding support to landlords and property developers for property maintenance and repair to rental units, and to minimize the perils of foreclosure.
For this reason, there are two ways that funds are distributed.
First, funds may be distributed from a local administering agency. Under the new law, local agencies give subsidies to landlords to provide lower rents to tenants. The act creates need-based geographical areas for these agencies. And, whereas prior rental assistance criteria were limited based on the number of units in a rental, the new changes allow for more flexibility, and now includes rental assistance for 1-bedroom, 2-bedroom, 3-bedroom, and 4-bedroom rental units.
Second, funds may be distributed for affordable housing projects. Housing developers apply directly to the Illinois Housing Development Authority, instead of an intermediary administering agency. In fact, the Authority has set aside 10% percent of funds to ensure development of affordable rental housing.
Furthermore, if you are a developer or landlord, tenants are now able to maintain their rental assistance funding even if the tenant’s income goes above the threshold 30% of the area median family income. The new limit is 35% of the area median family income, and a tenant must exceed that cap before they are cut off from rental assistance or subsidization. That is a 5% boost to Illinois landlords, housing developers, and tenants who use rental assistance.
For more information on other new state laws enacted on Jan. 1, here is a brief summary: https://www.illinoissenatedemocrats.com/images/2021/bills-taking-effect-2022.pdf
If you have questions related to rental assistance, contact the law firm of Gardi, Haught, Fischer and Bhosale LTD., and one of our lawyers will provide guidance. You can request a free case evaluation by clicking on the case evaluation button below.