U.S. Rep. Luis Gutierrez hugs his daughter, Omaira, in 2006 after announcing he won't run for mayor of Chicago.
Updated: November 29, 2010 10:24PM
Every time developers asked to build condominiums in his gentrifying 26th Ward, then-Ald. Billy Ocasio had the same answer:
Your project won't be approved unless it includes at least one "affordable home."
One person who benefitted from Ocasio's directive: Omaira Figueroa, the daughter of U.S. Rep. Luis V. Gutierrez, Ocasio's political mentor.
With a $140,000 loan from her parents, Figueroa bought her new two-bedroom, two-bathroom affordable condo in Humboldt Park in June 2008 for $155,000, property records show.
Little more than a year later, she sold it for $239,900 -- $84,900, or 55 percent, more than she'd paid.
Had Figueroa's condo been part of a typical affordable-housing program, that wouldn't have been possible. City of Chicago rules, for instance, now bar affordable-housing buyers from turning big profits when they resell. The rules also require that affordable homes remain affordable -- they can be sold only to buyers who meet income-eligibility guidelines.
Figueroa, though, bought her home through a 26th Ward "community" initiative that "wasn't an official government program," according to Ocasio, who resigned his aldermanic seat last year to take a $125,000-a-year post as a senior adviser to Gov. Quinn.
Ocasio estimated that about 180 affordable condos were supposed to have been created under that program. But it's unclear how many ended up being built and how many have been resold, in part because the program is defunct.
Figueroa, her husband, their son and her husband's two other children now live on the Northwest Side in a two-flat they share with the congressman and his wife -- a building that is outside the borders of Gutierrez's 4th Congressional District (see related story). Figueroa and her husband own 55 percent of the two-flat, according to Gutierrez, who said he and his wife own the rest and live upstairs.
'My father knows all about that'
Figueroa, 30, referred questions about the condo at 1834 N. Kedzie to her father, the congressman. "My father knows all about that," she said.
Gutierrez and Ocasio said neither they nor Figueroa did anything wrong. Nor, they said, did their close relationship give Figueroa an edge to get the home.
"Never," Gutierrez said. "Never. Absolutely not. Never. Never."
Ocasio and Gutierrez also said that campaign contributions they took from Roman Popovych, who built 1834 N. Kedzie, played no role in Figueroa's deal. Gutierrez's congressional fund got $1,000 from Popovych six months before Figueroa bought the condo. The developer and an affiliated company gave Ocasio's aldermanic fund a total of $13,500 between 2004 and 2009.
"I've known Omaira since she was 6 years old," said Ocasio, who hired her to work part-time in his aldermanic office about 10 years ago. "She got no preferential treatment."
Gutierrez said his daughter "participated in a program where the rules were identical for her as they were for dozens of other people." He said he lent her $140,000 because she couldn't qualify for a mortgage from a bank "for a number of reasons," including "probably" her husband's poor credit history.
"That's all I was: I was her dad," the congressman said. "We didn't hide anything. That's why you see a mortgage of $140,000.
"We charged her four-and-three-quarters percent interest because the CPA who does my taxes said that that was an interest rate that was high enough so that the IRS wouldn't say it was a gift."
For years, Gutierrez -- one of the country's most-prominent immigration reform advocates -- has been investing in real estate, making hundreds of thousands of dollars buying and selling homes in Chicago.
Two of his deals involved developers who have since been convicted of crimes: Tony Rezko and Calvin Boender. Gutierrez was never accused of any wrongdoing in their cases. He bought a condo from Rezko and flipped it for a profit. He also bought property from Boender, selling it at a loss.
$93,828 a year
When Figueroa bought her condo on June 9, 2008, she and her husband were making $93,828 a year -- $55,620 from her state-government job with the Illinois Commerce Commission and $38,208 from her husband's job with the city Aviation Department.
The 1,221-square-foot duplex is on the first floor, facing the alley. She paid 41 percent less per square foot than the next-cheapest unit, one that's 1,773 square feet and sold for $385,000 (see graphic).
How the home became affordable housing dates to January 2006, when Ocasio backed a zoning change allowing Popovych to build four condominiums on what had been a single-family lot.
Popovych was among a group of developers who'd found it hard to build affordable homes through programs under the city Housing Department's control. The city "required developers meet all sorts of bureaucratic criteria that was time-consuming and added a financial burden" to their projects, according to Ocasio.
So, about six years ago, Ocasio and community leaders came up with an alternative: Developers would get Ocasio's OK to rezone lots for condos only if they first won approval from a group called the 26th Ward Affordable Housing Committee.
If Ocasio agreed, he would get the City Council to approve the zoning change subject to a "declaration of restrictive covenant." That would give Ocasio oversight of the project and spell out how many affordable units would be required.
Then, not-for-profit housing groups would advertise the homes, set income guidelines for buyers and work to pair them with lenders.
By late 2005, Figueroa and her husband had submitted tax returns and pay stubs as part of a first-time home-buyer counseling workshop run by the Latin United Community Housing Association. Ocasio used to work for the group, which gets about $500,000 a year in government funding.
Gutierrez said his daughter's certificate from the home-buyer workshop was all she needed to qualify to buy a home through the 26th Ward Affordable Housing Committee program.
Under city rules, Figueroa would have had six months to buy an affordable home after proving she met income guidelines.
Under the 26th Ward program's rules, though, there was no time limit. So she was able to buy affordable housing 2Â½ years later -- when her income had risen sharply.
Is that how affordable housing should work-
"I'm not gonna have a conversation about affordable housing in the context of a real estate transaction in which my daughter did absolutely nothing wrong -- unless you could show me she violated some rule, that she got some kind of special treatment," Gutierrez said. "It's just not there."
Figueroa sold the condo last August for $239,900 -- $84,900 over what she'd paid for it.
Gutierrez said she cleared only about $53,000, though, taking into account closing costs and money she spent on home improvements.
By the time Figueroa bought her condo, the other three units at 1834 N. Kedzie had been sold for between $385,000 and $395,000 each.
All three have been rented out and are now facing foreclosure.
The men who bought those condos -- Volodymyr Kuchmiyov and Yaroslav Dzis -- appear to have ties to Popovych, according to court documents. A tenant in one of Kuchmiyov's two units said she'd been paying rent to an office at the same address as a Popovych company, V.P. Interlink Development. A tenant in Dzis' unit said he paid rent to a real estate company called V.P. Interlink at the same address and had never heard of Dzis.
Attempts to reach Popovych, Kuchmiyov and Dzis were unsuccessful.
Ocasio: program a success
Ocasio said he doesn't know exactly how many affordable homes were created under the 26th Ward program, in part because his staff destroyed many of its records when he shut down his aldermanic office.
When he was asked about the program, Ocasio tracked down some documents. But those records don't show who bought those homes or how many have been resold.
Ocasio said that when the housing market collapsed in 2008, he let developers sell some of the affordable units to anyone, regardless of income. "Developers said, 'Look, I can't sell these units. We can't find people to buy them,' " Ocasio said. "And so, at some point ... we said, 'Go ahead. You guys need to get rid of it- Get rid of it.' "
The struggling economy also kept developers from even breaking ground on some projects, Ocasio said. Still, he considers the program to have been a success.
"I think there's worse things that an alderman can do with the power of zoning than to build affordable housing," Ocasio said. "In hindsight, there's always improvements you can make. I think, if we had the money, if we had more support from the city, we would have done all the things that everybody else did. ... We didn't have those resources."