LCBH helps save the KCRO

While much of Lawyers’ Committee for Better Housing’s (LCBH) recent work has focused on preventing evictions during the COVID-19 pandemic, reminders of a previous housing crisis that placed tenants in peril came roaring back this spring. In late April, an adverse court decision struck down the Keep Chicago Renting Ordinance (KCRO). Thanks to the collective action of LCBH, Communities United (CU), and First Ward Alderman Daniel LaSpata, the City Council passed a revised and improved KCRO on July 21st. This urgent response rested on the likelihood that large numbers of tenants may once again face eviction due to building owners being unable to pay their mortgage.

The KCRO was originally passed in 2013 after years of advocacy by LCBH and community partners responding to the housing crisis that began in the late 2000s. For several years following the housing crash, tenants living in foreclosed buildings were left in legal limbo, often unable to pay rent to the original owner while knowing next to nothing about the fate of the building and any potential new owners. In those circumstances, many renters were evicted from their homes or were not extended new leases by new ownership, leading many to heightened housing instability thereafter.

An important provision in the original KCRO said that new ownership was required either to offer tenants a new lease with rents set at no more than 102 percent of their previous payment, or to pay the tenant $10,600 in relocation assistance to help them resettle elsewhere. That mechanism kept thousands of people stably housed or able to move successfully since the KCRO’s passage. However, on April 30, the Illinois Appellate Court for the First District ruled in Riviera v. Bank of New York Mellon that the 102 percent rent limit constituted a violation of the 1997 ALEC-sponsored Illinois Rent Control Preemption Act, and that the rest of the ordinance could not function without the provision in place, effectively striking the entire ordinance down. While the decision was still on appeal by Ms. Rivera’s counsel (Cameron & Kane, Lawyers’ Committee for Better Housing and Jenner & Block), a legislative fix also appeared in partnership with the City Administration, First Ward Alderman Daniel LaSpata, and concerned Chicago Housing Justice League members from LCBH and Communities United.

The revised ordinance saved the KCRO from oblivion and strengthens protections for renters in foreclosed buildings, an important fix given the possibility that these kinds of cases will reappear in the wake of the pandemic and during periods of cyclical breakdowns in the banking industry. For example, the original ordinance only applied to buildings that had already been purchased by a new owner after a foreclosure had been completed; now, if a building is bought before the foreclosure is finalized, renters are still protected. Moreover, for fear that new owners will side-step their obligations by offering leases at astronomical rental rates (a concern of the Rivera court), renters are now given the opportunity to refuse to resign a lease with the new company and opt to take relocation assistance instead, an important addition that will give tenants greater flexibility in determining the best steps forward for themselves and their family. Ultimately, the new ordinance adopts nearly all of the recommendations made by Justice League members to go even further than the original bill, an important development that can protect even more renters.

"The amendments both fix and strengthen the KCRO, continuing much needed relief for thousands of renters who have done nothing wrong but are pressed to move from the home and neighborhood they’ve known for years or even decades. We certainly appreciate working the City Administration, Alderman LaSpata, and support from the Chicago Housing Justice League in getting this done," LCBH attorney and Justice League founder Frank Avellone said.