From the beginning of this academic year, two teams in the clinic started working with small business clients instead of the housing related clients. Luckily, our team got a client who we can call an entrepreneur.
Before this clinic, I worked with immigrants as my clients. Most of them need an interpreter to communicate in the United States and they barely have any idea regarding the American law. Facing those clients, attorneys tend to play a controlling role in their cases, as the traditional “attorney-centered approach,” instead of the “client-centered approach.” I remember one time when I spent 20 minutes explaining every possible option to my client through an interpreter. However, the only answer I got was: “You are the attorney. I will do whatever you recommend.” I doubt the same situation will ever happen to an entrepreneurship client.
Usually, entrepreneurs who start small businesses are experts in that field. They are passionate about they do. They are risk takers and idea creators. On the contrary, attorneys are risk averse and sometime, even idea killers. We will recommend having limited liability companies – to limit liability, purchasing insurances – again to limit liability, and putting everything in writing – again, to limit liability. I am learning to balance the risk and cost for the clients, especially when they just started formalizing their business.
In small business, entrepreneurs sever the function of owners, managers, and employees. They make decisions based on both personal interests and business interests. Attorneys need to be aware of those interests. For example, family members may start a small business together. Their family relationship can create an interesting dynamic for the company. Also, a client may insist to keep a business relationship informal for the benefit of their personal relationship. Attorneys have to respect the “common practice” in the clients’ field and situation, and provide as much as protection for the clients at the same time.
It was super rewarding to work for immigrant clients because they usually depend on the attorney so much. For entrepreneurial clients, I feel that we are in this together where we came in with different perspectives and educated each other along the way.
It is difficult to understand the debates in Illinois about the budget crisis. One of the reasons may be attributed to the lack of understanding of how it truly affects people and their day to day lives. My clinic team partner and I recently found out that the Illinois budget crisis has had an impact on one of our affordable housing clients.
In my previous blog post last semester, I discussed the importance of affordable housing organizations providing services to residents to help them transition into the private market. Our client provides services in areas such as education, financial literacy, and employment. The existence of these services helps create a sense of stability for residents with the hopes of making the transition into the private market easier. However, without proper funding, social service providers are either limited in the services provided or unable to provide the services altogether. This affects residents who do not have adequate resources to navigate their everyday lives making it that much more difficult to transition out of affordable housing.
Not only does it affect residents living in affordable housing, but the budget crisis impacts other social service providers and different population segments. Seniors are losing their home health care workers who help them bathe, cook, clean, and take them to doctor appointments. Children do not have after school programs, which forces parents to make other arrangements or work fewer hours. People who suffer from mental health issues are not able to seek the help they need. Until we attempt to understand the advantages of social service programs and those it benefits, there will continue to be a disconnect regarding the value of these programs and more of a willingness to cut funding for these programs. But even with this knowledge, we still may not comprehend the need for these types of services until it is on our doorstep and affects us or someone we know personally.
Additionally, the budget crisis is also having an effect on staff members who work at social service providers. With the lack of a budget, there is an air of uncertainty looming over the workplace. Providers have responded by laying people off because they cannot afford to keep their entire staff. This results in remaining workers picking up additional shifts, which causes them to be overworked. The impact of either losing one’s job or potentially losing one’s job is creating financial stresses for these individuals and their families. These staff workers, just like everyone else, are trying to make a living. The budget crisis is putting people in an extremely difficult position making it harder for individuals to meet certain financial obligations thus causing an adverse effect on their livelihood.
Most of us hope that the budget crisis is resolved soon so that social service providers can continue to provide services for their clientele. Nonetheless, even once a budget is determined there is no guarantee that these services would return.
In Illinois, cooperative corporations can be formed under one of two statutes: (1) the General Not For Profit Corporation Act of 1986 (805 ILCS 105) (“NFP Act”); or (2) the Business Corporation Act of 1983 (805 ILCS 5). In selecting which statute to form under, each and every cooperative makes an individual choice based upon its own characteristics, goals and purpose.
To become a member of a cooperative corporation, an individual pays a sum of money in exchange for an ownership interest in the corporation. The owner essentially buys a share or portion of the corporation. This is often done through a document known as a share purchase agreement. The process and qualifications for becoming an owner are set forth in the bylaws written to govern the cooperative corporation.
Pursuant to Section 106.05, the NFP Act prohibits all corporations formed under the NFP Act from issuing shares. Further, any evidence of contribution shall be delivered to a member but the document cannot be named “share of stock” or by any word or term implying that the instrument is a share” (805 ILCS 105/106.10).
This presents a problem for housing cooperatives organized under the NFP. The housing cooperative’s bylaws, purchase agreements, membership certificates, occupancy agreements and other governing documents cannot refer to an owner’s interest as a “share.” However, there is an easy solution! The statute does not prevent the use of “contribution” or “member contribution” and thus those terms might be an option to use in place of “share.” Those organizing the cooperative corporation can get creative - with the help of qualified legal counsel, of course as there are legal consequences for these choices.
In my previous post, I discussed why I chose to work in the Housing and Community Development Legal Clinic. I concluded, “I wanted to gain a different experience. For the next nine months, I hope to gain a different experience. One that will challenge me, teach me how to interact with clients, and most importantly prepare me to become a better lawyer.” I can honestly say that I learned more about myself and how I need to adapt in order to become a better lawyer.
For some background, when I received my client’s case I immediately searched case law for the answer. Logically, this made sense to me. I have been taught for the last two years that I will find the answer in the case law. However, as Professor Lawton would say, “stay out of the weeds.” She was pointing out to me that when you start your research in case law (the weeds) you neglect all the other sources of law. I skipped the federal and state constitutions, statutes, executive orders and regulations. In all, my research was incomplete.
Professor Lawton has taught me a valuable lesson: when you research, “start broad.” First, understand the question you are trying to answer. Second, map out all the sources of law. Third, narrow the sources of law that is relevant to the issue you are trying to answer. For example, if you are researching a state law real estate question, you will not have to research executive orders. Finally, you begin your research.
For myself, I am consciously thinking about all the sources of law before I begin my research. I will admit I still start my research in the weeds. It is an old habit that I am still trying to break. Thanks to the clinic, I am aware of this and can hear Professor Lawton saying, “stay out of the weeds.”
One of a transactional lawyer’s major responsibilities is to mitigate risk for her clients. A crucial way to mitigate risk is by drafting clear contracts. I found out very quickly this semester that it is easier said than done. In my early stages of writing, I have encountered many obstacles and new insights into the art of contract drafting. With the help of my professor and classmates, I learned some valuable takeaways to consider before putting pen to paper. Here are some of the key lessons I learned while drafting this semester.
Know Your Audience
Many times it is easy analyze a legal issue in a vacuum and assume that you and your client will be the only readers of the contract. Not true! Make sure you are mindful of all of the potential readers of your legal document. A contract may make its way to other attorneys, judges, or third parties. Keep this information in your mind as you are writing.
Another important lesson is to be precise in your drafting. One way to do this is to make sure you are using the appropriate language. Consider the legal effects of using “shall” versus “may.” Avoid using terms that may be ambiguous and have multiple meanings if it does not support your client’s legal issue.
Test Out Consequences
A major way to mitigate risk for your client is to anticipate and plan for potential pitfalls that can arise in a deal. A helpful way to identify and plan for risk is to first consider all of the necessary obligations of the contract. Second, consider how these obligations will be met. Third, determine when and how a breach of those obligations occurs. Finally, make sure that you address all of these concerns while you are brainstorming and writing.
Fully Understand Your Client’s Objectives
Another easy way to improve your drafting is by fully understanding your client’s goal, project, or legal issue. I found it useful to map out the legal issue in a flowchart or diagram. The visual flowchart made it easier for me to spot potential legal issues or gaps in my understanding of the deal. Identifying these issues early on made my drafting much easier and more effective.
These tips have helped me tremendously in my legal drafting. I am sure I will learn many more in the remaining seven weeks of the semester.
During Clinic last semester, we explored and discussed the evolution of affordable housing. Throughout our five part lecture series, we identified the meaning of affordable housing, what prompted affordable housing as well as the development and the redevelopment of affordable housing. What I enjoyed most about this series was learning not only about the legal and business issues, but the social issues individuals faced during that time.
Let's take a second and rewind back to 1967. During this time, one of the social issues affordable housing applicants faced was the segregation of blacks to specific areas of the city. Based on my knowledge of the history of the Civil Rights Movement, it was no surprise to me to learn that segregation of blacks took place by sending black applicants to the developments in the predominantly black neighborhoods. (Nope, I was not surprised at all.)
What did enlighten me was the legal response to the segregation issue. In a 1981 Consent Decree, the Court introduced the concept of Revitalizing Areas where areas with a substantial minority population undergo redevelopment to quickly integrate the areas. Since then, HUD announced the Hope VI program, which revitalized the worst public housing projects in the United States into mixed-income developments. As a result, the Chicago Housing Authority's (CHA) drafted a redevelopment plan called the Plan for Transformation.
Now let's fast forward to the present. It has been many years since the birth of CHA’s Plan for Transformation and many affordable housing units have been demolished and redeveloped. More specifically, it has been over 20 years since the initial demolition began of the former Cabrini Green public housing development. In April 2014, CHA announced its plan for further redevelopment of the remaining vacant areas formally known as Cabrini Green. The plan consists of a goal to build 2300-2800 mixed-income housing units in buildings constructed on fourteen parcels of the total fifty acres of land.
Since then, renderings of the new Cabrini-Green redevelopment have been featured in various online news reports. More recently, the Chicagoist featured a report about a new high rise where two bedroom units will start at $3200 a month. Many viewers of the post expressed concerns about gentrification. Some viewers stated that it was unfair to the many former public housing residents forced out of Cabrini to now charge so much money in rent for market-rate units. Others stated that it was a form of gentrification because the former public housing residents that once lived in the Cabrini Green area would not be able to afford to live in the new units.
After reading the comments from the article referenced above, there are a few notes I would like to share in an attempt to lessen the ‘gentrification argument’ blow. The new apartment renderings to the CHA’s redevelopment plan for Cabrini Green calls for the buildings to be integrated with mixed-income residents. The CHA’s plan states that the units will allocate thirty percent of those units as public housing, twenty percent of those units as affordable housing, and fifty percent as market rate units. In other words, some former Cabrini Green residents will have the opportunity to apply for the units set aside as public housing and live in the new developments for a more affordable rate than $3200 per month. This supports HUD’s plan to revitalize once segregated neighborhoods to be more integrated in support of better community development.
Time to take it up a notch.
The professor warned us, and she was not kidding. It’s not as though the first semester was a walk in the park, but now I have my work cut out for me. At first we focused on the basics; standards of professionalism, client management, and independent research. Now that we have some experience in these areas, she is really pushing us to see what we are capable of. It’s almost like the professor was teaching us how to swim when she fully intended on pushing us in the deep end!
The multiple clients, back to back deadlines, and endless rabbit holes keep me on my toes. Client meetings during winter break, Saturdays spent reading endless statutes, and Sundays spent in the workroom are but a few examples of the dedication that has been created in me by my participation in this clinic. It’s exhausting but it is so worth it. It is so nice to get compliments from clients and have them express appreciation for all the hard work and energy that goes into the work we do. It’s almost equally as nice to have shared a delicious meal with them in their home. I’m grateful to have had this opportunity to work with such good people. I’m even grateful for the not always so nice people who give you the opportunity to work on your client management skills.
I remember getting some guidance and being encouraged to ask questions first semester. Now, we all know what questions we need to ask ourselves to help us get the information necessary to complete the task at hand. We are now able to confidently guide our clients through their matters and feel competent in providing the services we offer.
The second semester has finally started, and I am extremely excited because this is my last semester in law school. I am so happy to be graduating this year - it was definitely a long time coming. As for the clinic, I am so pleased that I am able to be a part of it during my last year in law school. I have learned a lot from being in this clinic. I believe the experiences I gained from the clinic will greatly serve me in the future.
One of the things that I learned is that I really need to work on communication with my clients. During the first semester my partner and I had problems communicating with each other, but we fixed that. Now, I am having trouble communicating with my client. My partner and I will go weeks without emailing our clients or keeping them up-to-date with what we’re doing, and that’s really bad. So this semester I am really going to work on making sure I have contacted my clients at least once a week, letting them know what I am working on when it comes to their particular situation and letting them know if I have any questions.
I have also learned that I have to stop expecting my professor to give me the answer. When I don’t know something I look to my professor for the answer, expecting her to know it, which she does - but she doesn’t tell me. She makes me find it for myself and then explain it. This is a good lesson to learn now, because in the future I will not have anyone to look to for the answer. I will have to find the answer on my own and be able back it up. So I am going to try to do better from now. If I don’t know the answer I will either think through it or look it up. In the end, I’m glad I’ve learned these things now while I can still fix them, instead of down the road.
Are you thinking of starting a business that serves a social cause and also makes a profit? Then you may want to consider structuring your business as a low-profit limited liability company (“L3C”). In 2009, the Illinois legislature amended the Limited Liability Company Act to authorize the formation of LC3s. The aim in creating this new hybrid legal entity is to allow business owners to combine the benefits of pursuing a charitable mission (similar to a nonprofit) with the advantage of earning a profit (similar to an LLC).
What are the requirements of an L3C?
An L3C is a for-profit business entity that has many similar features of a limited liability company (“LLC”) with an additional focus on charitable work. An L3C must have a primary purpose of accomplishing a charitable or educational purpose. Although an L3C is able to generate profit, it must state in its articles of organization that no significant purpose of the company is to produce income or property. Therefore, the goal of generating revenue must be secondary to the overall charitable mission of the company. Also, an L3C must state in the articles of organization that no purpose of the company is to accomplish a political goal. Finally, any company operating as an L3C must contain the term “L3C” in the title.
What are the advantages of an L3C?
One advantage of an L3C is that owners of the company are able to earn profits from their work that contributes to a social cause. This “for-profit” feature of the L3C has an advantage over its nonprofit counterparts because it is able to attract investors that are interested in contributing to a social cause and also interested in seeing a return. A second advantage of an L3C is that its primary business goal is to further the accomplishment of a charitable or educational purpose. The Illinois Limited Liability Company Act requires an L3C and its owners to maintain this business goal for as long as the business exists. This state requirement provides an L3C with an advantage over an LLC that does not have this requirement because investors can rely on the L3C to maintain their charitable goal throughout the length of the investment (see Dana Thompson, L3CS: An Innovative Choice for Urban Entrepreneurs and Urban Revitalization, American University Business Law Review 2, no.1 (2012) at 145.
What are the disadvantages of an L3C?
Although many types of investors are allowed to contribute capital to L3Cs, many private foundations have been reluctant to jump on board. Many private foundations still prefer to make donations to other nonprofit organizations rather than invest in L3CS. In many cases, private foundations do not want to run the risk that their investment in an L3C does not comply with federal tax regulations.
Despite this fact, the L3C legal entity could be a viable business entity option for entrepreneurs in the future.
One of the roles of a lawyer is acting as a counselor to his or her client. It was a slight surprise entering into law school to find that there were few opportunities that allowed students to take on that role. Needless to say, I appreciate this clinic for allowing me the opportunity to take on that role and develop the necessary skills to effectively counsel the client.
When it comes to developing client-counseling skills, I learned that there are two major approaches to client counseling that a student should first understand. Those approaches are (1) the client-centered model, where the lawyer provides objective advice and allows the client to make the decisions, and (2) the lawyer centered model, where the lawyer makes the decision for the client. While both models arguably have the potential to yield positive results for the client, scholars favor the client-centered model because it allows for the client to take ownership of the consequences associated with their risks and decisions.
Once I learned and understood the differences in client counseling, I made the decision to follow the client-centered model when counseling my clients. In making that decision, I was unaware of the variations of difficulty that I could encounter. After facilitating a few client meetings, I picked up on a few things that helped client meetings run smoother and decisions. What helped me the most and allowed me to effectively counsel my business client was learning how to put myself in my client’s shoes and see her business and concerns the way that she sees them. Law students are trained to spot potential risks and issues and act in a manner to avoid risk or resolve issues. So naturally in my client meetings, I identified and described risks that my client did not consider.
I learned that it was best for me to walk my client through various scenarios to identify potential risks and issues instead of simply stating the risks and issues. This method allowed my client the opportunity to not only visualize the risks and issues, but also make her own decisions regarding the methods we could implement in avoiding those risks and issues. My client was then able to see from a business standpoint why those methods were important and give more value to our attorney-client business relationship. At that moment, I saw the true value and effectiveness in the client-centered lawyering model.
The Housing and Community Development Legal Clinic is easily one of the most valuable courses I’ve had the pleasure of taking while at DePaul. And as unbelievable as this might sound, I really enjoy all my classes (with the occasional exception, of course). This has already proven to be so much more than just a class; not only am I learning things that only life (i.e. not books) can teach you, I’m getting the chance to work closely with some really talented people. I also am developing new (and strengthening existing) relationships that I hope will continue long after we complete the one year program and go our separate ways.
My learning experience has been enhanced through our discussions, case rounds, and client interactions. I believe that our small class size and diverse group helps foster communication, but ultimately it is everyone’s attitude that actually transforms the space into one that allows for the unfettered exchange of ideas. It’s as though we all have this understanding that we come from different backgrounds and bring something different to the table. You can tell some thought went into this program. The professor incorporates thoughtful reading articles to complement the textbook so we get a nice balance of the fundamental concepts along with examples of the application in practice.
The most enlightening aspect of participating in the Clinic has been the client experience. Books simply cannot teach you about the transformation from a student to a practitioner. I’m just a law student stepping into the shoes of a practicing attorney, assuming this role that is associated with the competent practice of law. And as if this weren’t disconcerting on its own, we have real clients that are actually relying on us for guidance. I’m comfortable working with clients in other settings, but cannot yet bring that same comfort level to my dealings here. I would be fooling myself if I purported to be an expert in any area of law at this point in my academic career. I try to be cognizant of the fact that I am a novice and this is a learning process. So, when I find myself in situations in which I search for an answer to a question only to find that it depends on the answer to another question which subsequently reveals 20 more, I try to keep in mind that the frustration is a part of the learning process and I try not to let it get to me. And so, I draw on what I’ve learned from my other classes, dig into my research, and use my good judgment to fill in the gaps. I’m learning so much and having lots of fun along the way. It’s only through the learning process and by gaining experience will I be able to elevate myself from novice status to the next rung up.
A nonprofit organization is an organization that uses its
surplus revenues to further achieve its purpose or mission, rather than
distributing its surplus to owners. The
most common examples of nonprofit organizations are churches and schools. One of the most appealing qualities of a
nonprofit organization is the possible tax benefit. Illinois-approved non-profits are exempt from
paying state income taxes in Illinois. Non-profits must apply for, and receive,
an additional exemption from the state sales and property tax. With regard to the
federal income tax exemption, the entity needs to apply to be qualified as a
In order to be approved as an Illinois non-profit, the
nonprofit organization has to meet a “high” standard set forth by the
state. First, Illinois requires a
nonprofit organization to have at least three directors. The directors together will control the
direction of the organization. Furthermore, a nonprofit organization has to maintain minimum company formalities
to protect its directors from liabilities and maintain its tax-exempt status. As required of most business entities, the nonprofit
organization is prohibited from commingling company and personal funds. The directors of the non-profit organization
must meet at least once a year. The
organization must maintain records of meetings by the directors. Maintaining corporate formalities helps
protect the directors of the nonprofit organization from personal liability for
the obligations of the organization. However,
there are few exceptions to this protection from liability: the directors could
be liable when he or she personally and directly injures someone, guarantees a
bank loan or debt, fails to ensure the organization deposits taxes or files
necessary tax returns, or intentionally, fraudulently, or illegally causes
harm. More importantly, the directors
and employees of a nonprofit organization can only make “reasonable” salaries
or they may jeopardize the organization’s tax-exempt status. Lastly, no “dividends” like those issued by
for-profit corporations, can be issued by nonprofit organizations.
Due to all the requirements and paperwork, running a
nonprofit organization is unlikely to be a part-time job. A startup and small organization may want to
evaluate the worthiness of the tax benefit given its comparatively strict
corporate formality requirement.
This is my first time being a part of a Legal Clinic and honestly it was not what I was expecting. To be totally truthful, I’m not sure what my expectations were going into it. All I knew was that it would be a great opportunity because I would be getting hands on experience working with clients and improving my research skills. What I did NOT expect was to be pushed so far outside of my comfort zone that I would break down in tears in front of my professor.
Being a part of a Legal Clinic is completely different than being in class and learning about the law. In a class the professor tells you what to read, what to research, and that there is an answer out there to my questions. In the Clinic, Professor Lawton does guide you, to some extent, but you have to figure out what to research. And sadly, there is no easy answer to your client’s legal question. I learned that lesson the hard way. I spent several hours researching, searching every database I could think of and came up with no answer. To my astonishment, when I told the professor that I tried and could not find the answer, a tiny smirk appeared on her face. She knew I would do that, and she knew there would be no answer. I found out that I would have to come up with the answer myself, by reading statutes, case law, executive orders, state polices, etc. I was dumbfounded, I just couldn’t believe it, and finding out this awful truth only added to my stress.
Transitioning from classroom to Clinic has definitely been one frustrating process for me. I keep expecting the professor to tell me what do, what to research, where I can find everything I need. But instead she just looks at me, and calmly says, “Well what do you think you should do next? What do you think you need to research to provide a sufficient answer to your client?” And I cannot express just how frustrating and annoying that is! And I know she asks me these questions to prepare me for the real world, because when I am out there working my boss won’t tell me what to do or what to research; I will have to figure all that out on my own. So, even though I appreciate my professor for taking the time to teach me how to be an effective lawyer, it still frustrates me to no end.
But even though this is an EXTREMELY frustrating and stressful process, I am so grateful to be experiencing it. Professor Lawton is one of the hardest, most honest, and best professors I have ever had. She makes me want to do better and keep trying, because she told us as long as we don’t give up, she won’t give up on us. And since I can use all the help I can get, I will not be giving up. I will continue to push myself and I know I will stumble along the way, but that’s ok, because I know Professor Lawton will be there to show me why I stumbled and how I can avoid stumbling in the future.
One of our clinical projects this year involves an
organization that provides affordable housing throughout the City of
Chicago. Affordable housing is provided to those who meet certain income
requirements and can include families, seniors, people with disabilities,
formerly homeless individuals, and veterans. One of the organization's
goals is to transition tenants from subsidized housing to private
The term stability is an important concept to understand in
the context of affordable housing. Stability has various definitions
according to the person defining it. It could be a term used to describe
employment or a permanent place of residence. One of the difficult
challenges is how an organization incentivizes its residents to transition into
the private market when stability is of concern.
A possible approach would be to offer certain services to
residents in areas such as education, financial literacy, and employment. Residents would have an opportunity to learn information and apply it to their
lives. At the outset of this project, I did not understand how to determine the
type of information that should be presented to residents. I believe that
this would depend on resident needs, but what I have come to find out is that
the answer is less complex. Some of the knowledge I have acquired
throughout the years in private housing is knowledge that I have taken for
granted particularly because it is not afforded to everyone. Examples of
this could be tenant rights, landlord obligations, or budgeting concerns when
utilities are not included as part of rent. Offering services is not
intended to be the answer to the question about how to help people transition
into the private market, but it is a start. Affordable housing is a contentious
issue not just amongst residents and organizations, but also amongst cities and
Recently, there was an article
in the Chicago Tribune titled, "Developer, Builders Sue City Over
Affordable Housing Rule." The article is about a lawsuit between
developers and the City of Chicago regarding the Chicago Affordable
Requirements Ordinance. The ordinance requires developers to set aside a
certain percentage of units for affordable housing or to pay a fee. This article highlights an issue that is disconcerting. Most people would
likely agree that it is important to create a safe, affordable living
environment for everyone. However, people are not comfortable with the
solution of having affordable housing available in their neighborhoods
What is a housing cooperative?
A housing cooperative is a multi-unit dwelling formed when
people join democratically to own or control the housing and related community
facilities in which they live (http://coophousing.org/resources/owning-a-cooperative/buying-into-a-housing-cooperative/). Unlike a condominium in which each unit is
independently owned and all owners contribute financially for the maintenance
of the common areas, a housing cooperative is owned by a cooperative
corporation established for the purpose of owning the property and running the
cooperative. Therefore, the residents of the co-op do not own any real property
but instead own shares of the cooperative corporation.
Owners typically acquire shares through a share purchase
agreement. A share loan is a special type of loan that provides those who wish
to acquire a share in the cooperative with borrowed shares if they do not have
the capital to buy in up front. Those who obtain a share loan are provided with
funds from the lender to cover the monthly carrying charges to the cooperative
The monthly carrying charges paid by residents cover the
cooperative corporation’s expenses in running the co-op and may include blanket
mortgage payments, property taxes, management fees, maintenance costs,
insurance premiums and utilities. All expenses are shared by the owners of the
corporation. Even though co-op residents do not pay real estate taxes directly,
federal tax law allows all residents to deduct their share of the cooperative’s
tax payments, as well as their share of the mortgage interest payments and any
share loan interest payments, on their personal income taxes (http://www.investopedia.com/articles/pf/08/housingco-op.asp).
The co-op residents gain the right to occupy the property
through a proprietary lease or occupancy agreement. All applicants are screened
and approved by the cooperative corporation, in accordance with its bylaws or
rules, in order to become residents or owners. Housing co-ops must abide by the
Fair Housing Act and cannot discriminate based on age, sex, race, sexual
orientation or religion (http://www.washingtonpost.com/realestate/condos-vs-co-ops-whats-the-difference/2013/04/25/f673e29c-a5e6-11e2-b029-8fb7e977ef71_story.html).
Applicants can only be rejected based upon financial criteria and an
unwillingness to abide by the cooperative’s rules and regulations. Typically,
the residents of the co-op are also owners of the cooperative corporation.
The owners gain equity depending on the type of cooperative
in which they join. The three common types of housing co-ops in the United
States and Canada include: (1) market-rate housing cooperatives, (2)
limited-equity housing cooperatives, and (3) leasing cooperatives (or
In a market-rate cooperative, the owner can buy or sell her interest at
whatever price the market will bear and acquires equity similar to that of
other types of home ownership (http://home.howstuffworks.com/real-estate/buying-home/housing-cooperatives.htm).
Limited equity cooperatives have restrictions on how much equity residents can
earn and how much they can profit from the sale of their shares in the corporation.
This type of cooperative is typically designed to offer affordable housing and
are advantageous to individuals who would not otherwise qualify to purchase a
home. In a leasing cooperative, the property is owned by outside investors who
lease the property back to the corporation.
Housing cooperatives offer a number of advantages to owners
of the cooperative corporation that are different from that of other types of
ownership. Unlike condominium and independent home ownership, owners have no
personal liability in the cooperative’s mortgage. However, if one owner is
unable to pay their share, the burden does fall on the rest of the cooperative
to cover the difference. In addition, owners have control over the decisions
made with respect to the property. Pursuant to the bylaws of the cooperative
corporation, the owners and residents are able to vote on changes made to the
As described above there are a number of advantages and
disadvantages to cooperative living. The decision to join a housing cooperative
is personal, and all housing cooperatives are unique. It is recommended that
one fully researches the cooperative before they choose to join. For additional
information regarding living in a housing cooperative, please visit http://coophousing.org/living-in-a-cooperative/.
Going into the Housing and Community Development Legal Clinic,
I wanted to try something different. At an early DePaul alumni event I asked
lawyers, “if you had to do law school all over again, what would you do?” An
overwhelming number of lawyers said they would take a legal clinic course. At
the time, I didn't know what a legal clinic course was or why the lawyers said
to take it. Now I am beginning to understand.
After my first two years of law school, I felt like I was in
the same position as my junior year of college. “I am almost done with my degree,
but I haven’t done enough to translate that school work to real world
application.” I have completed multiple internships ranging from working with a
senator to working with Fortune 500 companies. While in law school, I worked
for a mid size firm and did an externship for a judge. Still, none of this is
like having your own client.
As a student, you are told what to do. As an intern, you are
told what to do. As a student in a clinic, the client tells you what it wants. It
is the student’s job to find out what that means. Unlike in class, the problem
your client wants solved does not have a perfect answer. It is frustrating
because everything a student has learned so far tells them there is a perfect
answer. Welcome to the real world.
It feels strange typing this, but now I am the lawyer.
Instead of the person taking notes in the meeting, I am the one leading it. The
role change is scary. I have a strong sense of responsibility to my client,
which I can't say I ever had before. For the next nine months, I hope to gain a
different experience. One that will challenge me, teach me how to interact with
clients, and most importantly prepare me to become a better lawyer.
Why did the new lawyers suggest taking a law school clinic? The obvious answer is that it's the first time you are the lawyer. However, it is much more than that. It teaches you the real truth: there is rarely a right answer. For me, that is exciting.
Tax Increment Financing (TIF) is
a community development program that uses the property taxes collected on the
incremental growth in property values in “blighted” areas to fund private
investment and infrastructure improvements in the area.
the City of Chicago, when an area is approved to become a TIF district, the
Cook County Clerk designates a base Estimated Assessed Value (EAV). The usual
taxing districts, like the schools, parks, and libraries, receive property tax
revenue based on the base EAV. The property taxes collected on the difference
between the base EAV and the new EAV are then supposed to be invested into the
development of the district.
The use of TIF in Chicago has
been a subject of a great deal of scrutiny for a lack of clarity and for the
implementation of TIF districts in areas that already show signs of growth and
development. During the process of starting a TIF district, the district holds
open meetings and forums for community participation. However, after the TIF district has been
approved, there are few opportunities for community members to give their
feedback on the development process or the use of the funds raised by TIF.
To promote transparency in TIF
usage in the City of Chicago, the City Council passed the Tax Increment
Financing Sunshine Ordinance.
Ordinance, which passed by a 48-0 vote in 2009, was passed to allow taxpayers
access to information on the use of TIF funds without having to file a FOIA
request. It calls for each active TIF District to publicize information
regarding the establishment of the TIF District, employment data, as well as
the annual reports submitted to the City’s Community Development
Starting in 2014, the
Chicago Department of Housing and Economic Development was required to post
even more detailed information on each TIF district. On the TIF data portal,
there is a searchable map
that allows the general public to see the boundaries
of Chicago’s 165 TIF districts and information regarding the infrastructure and
redevelopment projects within them. (http://webapps.cityofchicago.org/ChicagoTif/
This is an important step towards
improving the public understanding of the use of TIF in their neighborhoods. Moving
forward, publication of the underlying reasons for the designation of each
district as a TIF district could also help promote understanding. Since TIF
districts are supposed to go in areas that are either blighted or in danger of
blight, publicizing the blight factors present in an area (like age of
structures, inadequate utilities, dilapidation, or lack of community planning)
could encourage accountability in the decision making process and make it
easier for taxpayers to understand the problems that the TIF money should be
used to remedy.
Food deserts. Yes, you read that correctly - food deserts,
not desserts. Sadly, food deserts lack the sweet aftertaste of desserts; rather
these deserts are communities that lack healthy, fresh food options. These
deserts are especially prevalent
in African American and Latino communities throughout the Chicagoland area.
Arguably, while food deserts may have decreased in recent years, a number of
obstacles still remain when expanding access to healthy foods in Chicago.
Late last year, The Washington Post published an article announcing an 18,000 square-foot Whole Foods moving into the center
of Englewood, “one of the poorest neighborhoods in Chicago” and a classic
example of a food desert. To contrast the desolate stretch of city that has
become Englewood, the Post identified the Whole Foods retailer by its parodied
name, ‘Whole Paycheck,’ a reference to its high prices. The author of the
the new structure as a “gamble,” one that could potentially change what some of
the residents eat on a daily basis. Greater access to healthy foods is the very
goal of community stakeholders in Englewood who hope more food options mean
healthier residents overall. Despite the skeptics, many had high hopes for the
future of the Englewood community.
This future, however, dimmed earlier this year when a study
was published by the Public Health
Nutrition Journal that looked at the effect of supermarkets in food
deserts. The study did not address the population health of Englewood in
Chicago, but rather examined the Bronx neighborhood in New York, a comparable
case study. Researchers spoke with specific residents of the Bronx neighborhood
and asked them questions about their eating and food buying habits in six-month
The results were “sobering:
“[w]hile there was an increase in those who said they shopped at the
supermarket between the first and second rounds of questioning, that difference
disappeared a year later.” Additionally, despite the access to fresh fruits and
vegetables, there was a similar decline in produce available in homes after the
year mark. While healthy food was available at the store, cost was the
determining factor for most families making food-buying decisions.
It is clear from the study that access to healthy, fresh
foods is a necessity in many food deserts around the country, but it is not the
only determining factor in improving community health and diet. “Just building
a supermarket is not enough.” Access is only part of the equation; the challenge
is ensuring that these healthier foods are making its way from the store
shelves to the dinner plates of the community.
While there is no single answer to this issue, it is clear
from my time in the DePaul Housing and Community Development Legal Clinic that
the entire community needs to be involved in the resolution. From stakeholders
to residents, a greater and stronger community can flourish if differences are
set aside and the greater interest of health and well-being is the primary
focus. Eliminating food deserts in Chicago, and around the country, would be
the cherry-on-top for the beautiful dessert that we call health.
The Social Impact Research Center, a Heartland Alliance
Program, recently released its 15th annual report
on poverty in Illinois.
The report gives a survey of where Illinois stands compared to other
states regarding "key poverty factors." According to the
report: 24 states have a lower poverty rate than Illinois, 34 states have a
lower unemployment rate than Illinois, 33 states have a lower rate of
households paying over half their income on rent than Illinois, 22 states have
a lower uninsured rate among children and working-age adults than Illinois, 21
states have a better on-time high school completion rate than Illinois, 17
states have a lower food insecurity rate than Illinois, and 15 states have a
lower asset poverty rate than Illinois. The report also notes that at $721 billion, the Illinois
state economy is the fifth largest in the nation.
The report urges Illinois to do better at
addressing poverty in order to assure the financial stability of the
Poverty factors are often
For example, as the study
notes, affordable housing “ensures people can hold down jobs, study, and have
enough money for other basic necessities.”
Of particular interest to me, in November of 2014, one in
every 848 housing units in Illinois was in a stage of foreclosure.
In my opinion, the remarkably high
foreclosure rate highlights a major problem area Illinois needs to
address. High rates of foreclosure are a detriment to many areas of the
The state is not receiving
tax money, residents are left struggling to find places to live, and banks are
not receiving any mortgage payments. By addressing the foreclosure
problem, Illinois will be able to aid numerous sectors of the
This past summer New York City’s Department of Housing
Preservation and Development approved plans for a new high-rise luxury condo
building on Manhattan’s Upper West Side (40 Riverside Blvd.). The 33-story
building will have 219 units, including 55 affordable housing units. The
development has caused controversy because the building will include a separate
entrance and separate elevators for affordable housing residents. The separate
entrance has become know as the “poor door.”
City is well known for its large population and density. In New York, as in
many major cities, there is a shortage of housing. There is a particular
shortage of housing for low to middle income residents. Providing affordable
housing has moved away from public housing and has become more reliant on the
private sector to build housing for low to middle income residents. Private
developers are offered incentives to include affordable units in new developments by
tax breaks and zoning variances granting rights to build more units.
entrances are accredited to recent zoning changes that allow developers to
build multiple building segments on a single site, thus not requiring
affordable and low-income units to be integrated within market rate units and
allowing affordable and low income units to be completely segregated.
to the developer, the affordable unit residents will pay $850 a month for one-bedroom
apartments and $1,100 a month for two bedroom apartments (for perspective, $1
million in New York City can purchase about 430 square feet). To qualify for
the affordable units, a resident would need to earn less than 60% of the area’s
median income. For a family of four, that is about $52,000 a year (which is
twice the federal poverty level and above the U.S. median household income).
entrances highlight an underlying social issue. There is a real need for
affordable housing for low and middle income individuals. The construction of
more affordable housing and providing access to affordable housing is undoubtedly
positive. However, where the alternative seems to be no housing at all, a
challenge to an individual's meaning of worth seems to be a questionable price
The clinic experience has been filled with opportunities both small and large to fall or fly. The clinic, by nature, asks us as clinic students to step outside of our comfort zones. This push has been exciting, terrifying and everything in between.
There has been one clinic experience that stands out to me as an exercise in personal evaluation and growth. As part of one of our projects, my teammate and I had to make a trip to a notoriously dangerous neighborhood in Chicago. I was aware of the neighborhood’s reputation, and I was extremely hesitant to make the trip. I decided to discuss my concerns with the professor and my teammate. I was asked to do some research and back up my concerns.
I came back the next week armed with a couple of articles and studies done in the neighborhood we were planning to visit. In a second discussion with the professor and my teammate, we looked at more than just the crime rates for the neighborhood. We talked about what kind of crimes were occurring and what we would do to be safe while we were there. After our talks, I wouldn’t say I felt comfortable, but I was willing to step beyond what was familiar to me and go with the team to the neighborhood.
After the trip, I looked back at the experience and the reactions I had. Everyone we met was friendly and engaging. The neighborhood didn't feel much different from the parts of the city I was more familiar with. I genuinely enjoyed the work we did while we were there.
This experience in the clinic taught me that it is okay to be hesitant about some things, but you have to be able to set back from the concern and analyze it rationally. My trip to this neighborhood was very pleasant, but I had done the research to feel more aware and comfortable with my decision. I felt like I had ownership of my choice to go. The clinic put me in a situation that I felt was unfamiliar, which scared me. I came out on the other end with a better understanding of not only that neighborhood, but also my responses to being asked to step outside of my comfort zone.
My name is Alex Sparhawk, a second-year student at DePaul University College of Law. During my time with the Housing and Community Development Clinic, I had the fortunate opportunity to be partnered with Allen Thomas, also a second-year law student. This last year we worked with the Institute for Housing Studies and the Metropolitan Mayors Caucus conducting legal research on different policy related projects. As our year with the clinic comes to a close, Allen and I had a conversation about our clinic experiences. My comments are in regular font below; Allen’s are in italics.
So to get the ball rolling . . . . What expectations did you have before entering into the clinic, and do you think those expectations were met?
My expectations were general ones such as getting experience in an area like municipal and state law relating to housing and housing issues, so working with the Institute for Housing Studies and Metropolitan Mayors Caucus has been great. I think the experience I’ve been most surprised by, though, is how working for our client evolved as we went along and, by the end of the year, came together to be something bigger. The smaller pieces we worked on initially, like a short memo detailing the differences between home rule and non-home rule municipalities, became a piece of a much larger project of researching the authority of those two different municipalities when they enter into an Intergovernmental Agreement for joint enforcement of a rental registration ordinance. At the time we worked on those initial memos, I didn’t perceive a connection between them, but in the second semester of the clinic, those separate pieces – home rule, liens, an overview of rental registration ordinances, a look at landlord licensing – have really come together to be a part of something bigger. That part of our clinic work I have found to be very exciting and to be a great experience that I wasn’t expecting when we first started.
How about for you? Has the work we’ve done matched your initial expectations? Any experiences that you weren’t expecting?
I would have to say I had similar expectations coming into the clinic. For a while now I have known my legal interests lie in real property related matters and I hoped the clinic could offer actual working experience in the field. To be fair, I thought the primary work load would involve landlord-tenant issues. But, I think our assignments involving policy-related legal research have been a rewarding experience. Individually, the work product we produced last semester seemed disjointed and unrelated. Ultimately, however, the pieces fit together in a much larger scheme. I really valued the opportunity to work with IHS and MMC on a project that has potential to affect thousands of people in the Chicago-land area and it was an experience beyond my expectations.
One of my favorite moments was being called a “colleague” by the lead attorney charged with drafting the intergovernmental agreement you had mentioned earlier. Having the opportunity to sit down and knowledgably discuss a challenging legal issue with a practicing attorney was definitely something I did not expect coming into the clinic. I think the meeting we had with Attorney Denzin went very well and was a rewarding experience.
What has been your favorite experience? Do you feel that your experiences working at the clinic has helped develop any particular skill sets?
Concerning improving skills, I’ve definitely improved at statutory interpretation. In a classroom environment, especially in the first year of law school, the case book really guides a student through the statutes. Here’s a statute, here’s a great case for illustrating how courts apply the statute, and then here’s some notes fleshing out what other courts have done and why they did it. It’s all nicely organized and makes perfect sense. Very clean. But going to the statute as it appears in the statutory code, then finding cases (or legislative history or advisory opinions from the attorney general or whatever else is out there) that help illustrate the statute, and finally applying it to the question the client has asked is a whole different animal, especially when there isn’t a case on point and the question has never been addressed before. And I really think I’ve gotten better at that part of legal research. Although I’m not sure I’m entirely comfortable with the ambiguity that sort of research can ultimately result in, I’ve at least come to accept the possibility of a less-than-absolute answer.
My favorite professional experience was the same as yours. Not only the potential impact of the work being done on rental registration, but at the beginning of this semester when the pieces we had worked on in the previous semester fell into place as a part of a larger whole. It was a great moment when I finally understood the big picture and everything just made sense. I have to also mention that the weekly status meetings with you, me, and Professor Lawton had some of my personal highlights from the clinic. Maybe my favorite was the meeting when, as soon as we started mooting an upcoming meeting with the client, I could not clearly state the phrase “necessarily implied by or incidental to.” I had been saying this phrase for months without a problem and then, out of nowhere, I couldn’t say it for the life of me. That meeting is closely followed by the ten-minute explanation of “ parcels of land” when nothing I said seemed to make it clear that there were two separate and distinct parcels of land – “one for the bridge and one to maintain the conservation area” -- and it really would’ve helped had I maybe said “two parcels of land.” Also, worthy of mention was the status meeting when, before the meeting, you and I were focused on following the agenda (at least, I was focused on following the agenda), and as soon as the meeting started, you jumped right to the third item on the agenda.
Maybe those are “had to be there moments,” but they still make me laugh. Any moments not related to work for clients that stand out for you?
Our weekly team meetings have been particularly enjoyable, and there were definitely a few “had to be there” moments. The meetings were useful for ironing out our legal viewpoints on the particular issues we were researching, and provided a great opportunity to get to know one another better. Sometimes our discussions stick to the legal issues, others were about job prospects, and a few times we took the opportunity to gripe on how cold this winter has been.
Or how early the meetings were....
Class time is something else I really enjoyed because as a group we hit it off very well. We are a diverse group of individuals from different backgrounds and with different perspectives. That has led to some interesting discussions and viewpoints. I appreciated that everyone actively participates in class discussion and the energy of the group has been very positive. We have developed to be more than classmates and have grown to be friends. I think because Prof. Lawton encourages participation and the structure of the class being small in size has helped in that regard.
Overall, I would recommend this course to any student interested in transactional legal work especially those interested in real property and community development related issues. It’s a much different law school experience than your typical course. The clinic is a sort of hybrid course that includes a lecture aspect and work experience aspect. It provides an opportunity to directly interact with clients and apply the law to their particular set of circumstances. I have been very pleased with this experience and the opportunities created by it.
I would definitely recommend the clinic to another student. I thought it was a great experience, and looking back, it was a good decision on my part to enroll in the clinic. Not only did I enjoy the classroom portion of the clinic and working with the client, but it’s so much fun writing cover letters when I can actually write about relevant work experience.
In the Housing and Community Development clinic we often discuss a variety of community development programs. We talk about what the goal of community development is, or should be, how to achieve those goals, and what the pros and cons of the innumerable programs are. Through these conversations I've discovered all types of programs and initiatives that I had never heard of, from Tax Increment Financing to Smart Growth plans to bringing business development to underdeveloped areas.
One of the most interesting projects I've heard of during this time is The Plant. The Plant is a food business incubator located in an old meatpacking building. In an effort to create a new type of organization, The Plant has connected numerous organizations in one building with the idea of creating an environmentally friendly, one stop shop for food businesses. Located on Chicago's south side, The Plant will incorporate indoor farming, small food businesses, and a brewery.
The Plant promotes a net-zero energy, closed loop model, in which the waste created by commercial kitchens is used to generate energy. Aquaponic farming creates a symbiotic relationship to grow vegetables and fish. The goal is to show that manufacturing and growing can happen in a sustainable way. The Plant's only focus, however, is not just being environmentally friendly, nearly all the businesses will be for profit, and will create an estimated 125 jobs.
I find this idea so interesting because it's not only community development but focuses so much on the environment as well. Too much I feel that developers, and government agencies view community development too narrowly. Often it seems that people look for one problem to fix, whether it be a lack of affordable housing, a lack of grocery stores, or a lack of accessible public transportation. Here however, The Plant has created a business that will be environmentally friendly, profitable, rehabilitate an abandoned building, provide restaurants for the surrounding community, and create jobs and educational opportunities all at once.
According to a Chicago Tribune article on March 3, 2014, several real estate companies in Illinois are having homeowners fill out forms to decide whether they will allow guns inside of their homes during showings. If the homeowner checks the no box, a sign will be posted in the front yard of the home alerting prospective buyers there are no guns allowed on the property. This rule only applies to the showing of the homes and not what buyers are allowed to do after purchase. These new rules are being implemented at agencies across the state due to the passage of the concealed carry law in Illinois. The concern is for the safety of the agent while showing homes. Many agents like the idea of having the signs in the yards of the homes, however some are not too sure it will be effective. Michael Golden, the founder of @Properties in Chicago, thinks the idea is a good one, but enforcing it is another problem. Other agents and real estate companies share the same sentiment as Mr. Golden agreeing that there is no real way to enforce the rule short of patting down prospective buyers.
Even though many other businesses have started to put the “no gun” signage in their windows, it raises a different problem in the real estate arena. A big concern among agents is running away potential buyers who might be conservatives and feel offended by the signs. The end goal is to sell the home and it might not be worth the risk to insult a potential buyer before they even set foot inside the property. This will definitely put the homeowners who chose to have the signage on their property at a disadvantage.
While I agree with the reasoning behind implementing this policy, I do not believe it will be effective. Yes, a real estate agent's safety while showing homes is of the utmost importance, but if someone intends to do harm they will do it regardless of a sign. One agent in the article brought up this very point. You don’t want to risk deterring potential buyers by posting a sign that is definitely not going to deter a criminal. In the comments below the article, one man stated while he was viewing a home a sketchy man walked in and was staring down the real estate agent waiting on him to leave. In fear that he might do her harm, the agent asked the commenter to stay and after a stand off for about 15 minutes he had to walk her to her car. The sketchy man did not leave until she pulled off and it was clear he was not there to view the home.
I focused on that comment in particular because it raised a good point that an agent’s safety is at risk regardless of concealed carry. They show homes everyday to complete strangers having no idea what intent or ulterior motive they may have. There are many violent crimes that occur without weapons and a “no gun” sign will not save you from those crimes. Also, hanging a sign will not stop people from bringing in their guns during the showings. For this policy to really be effective the agents would have to wand potential buyers or send them through metal detectors, which I’m sure is something they do not want to do. Not to mention that they are not qualified to handle an un-cooperative buyer. Now it becomes a matter of cost, will companies resort to these methods and hire security to enforce them at the properties? Sounds a bit extreme, right?
Overall, the intent behind the policy is great but the real estate market is far too consumer friendly to take the risk and set these boundaries. The main goal is to sell homes and not insult the buyers. I am not saying that all buyers would be offended by the signage, in fact it might make some more at ease. I am simply saying that I do not think it is worth the risk of insulting someone who might very well have the ability to purchase the home. This is still a very new concept but I am curious to see how many real estate companies adopt this policy and how many homeowners opt to have the “no gun” signage placed in front of their homes.
Being in school for 20+ years, it is often difficult for soon-to-be attorneys to view themselves as anything but students. Though functioning as lawyers while in working in clinic, there is sense that there is a safety net surrounding the student. They are able to perform the legal work and analysis in the clinic, while having a steady hand nearby, guiding and assuring nothing bad will happen. Being more then three quarters of the way through the clinical experience and watching the hand full of students prepare for their first steps outside of the comfort of student life, there is a moment of pause and reflection. Growth has occurred in the passed months that have truly prepared the students for those next steps.
A natural shedding of the student identity occurs throughout the clinic process. During the first meeting with the client, the unknowing, insecure clinic student holds onto whatever preparation and notes they have as if they are the only weapons left for them to fight with. The answer to any question a client may have is printed in black and white on the piece of paper grasped tightly in front of them. As soon as that student gets asked the curve-ball question they didn’t see coming, their face goes a bit pale. They struggle. They learn. They answer the question. They move on. This initial struggle is one of the biggest moments for that student. It begins that transition of having to rely on the knowledge and skills that they have gained rather than their casebooks and outlines.
By the second semester of this experience, those notes and preparation are two of many tools in the toolbox brought to a client meeting. They are accompanied by confidence, newfound knowledge, experience, and a sense of ease. There is a refinement that comes with the student being allowed to make those calculated risks that only the clinic environment provides. The mistakes and lessons that most attorneys painfully struggle through durinf their first years in practice are introduced a bit sooner to the clinic student so that they can start mentally preparing for the road ahead.
The next challenge the student has to overcome is making sure that the client and other professionals view them the way they view themselves. Just as the students initially need to prove to themselves that they are able to take on the real legal world, the clients that they work with often need reassurance as well. Another transformation takes place in this sense. As the student gains that sense of confidence, the client gains confidence as well. So much of being professional is the ability to carry oneself in a professional and competent manner. The client can sense this. The confidence that the student has gained fills up the room and puts the client at ease. They are able to look to the student as their acting attorney and are secure in the idea that their issues will get resolved.
As the end of the clinic fast approaches, this transformation from student to professional is more tangible than ever. These newly acquired skills are being used on a daily basis. There is reassurance that once the student is removed from the learning environment, they will be able to take on the new role that they are thrust into. One of the most fundamental realizations gained from the clinic is that others will perceive the student the way they choose to be perceived. By having confidence in their abilities, students are able to command the respect of even the most seasoned professionals.
One of the reasons I decided to move to Chicago is the splendor of the downtown city skyline. It is, in my opinion, one of the most architecturally beautiful cities in the United States. And because I am interested in the development sector, I usually like to keep up to date with ongoing and planned projects in the area. Not long ago I came across an article in the Chicago Tribune
 claiming that the developer in the failed “Chicago Spire” project has found a new investor to resume construction. For those of you unfamiliar, the Chicago Spire is a 150-story mega skyscraper designed by Spanish architect Santiago Calatrava to be constructed near Navy Pier.
As it was planned, the project would tower above downtown and be the focal point of the city skyline. Due to the economic downturn, the developer of the project, Garrett Kelleher, was unable to secure enough financing for the $1.5B project. It quite literally never got off the ground. Since 2010, the project has been tied up in a protracted legal battle and the property was put into receivership, killing the development. Kelleher is still the owner of the property, but according to the article, owes more than $93M in principal, interest and late fees on the mortgage. No construction on the site has occurred since 2008 and a 76-foot-deep foundation hole remains at the 400 N. Lakeshore property.
Kelleher bought the property in 2006 for $64M with a mortgage from Anglo Irish Bank. During the foreclosure crisis, the Irish National Asset Management Agency took over the debt which it later sold last summer to Related Midwest, a real estate development firm. In 2010, Lorig Construction, one of the construction companies responsible for building the ramps to and from Lakeshore Drive, initiated foreclosure proceedings against Kelleher’s company, Shelbourne North Water Street, LP, and it has since been placed into receivership. As I’ve come to learn through my work at the clinic, under Illinois law a mechanic’s lien or construction lien, like Lorig’s, is statutorily given priority over the value added from the improvements constructed. This can often frustrate mortgage companies who expect to have priority by recording their lien documents first.
Last November, Related filed a federal lawsuit against Shelbourne seeking repayment of more than $95M of guarantees it had made on the project. Shelbourne was subsequently forced into bankruptcy. As part of the litigation, Shelbourne could file a reorganization plan to exit the bankruptcy proceedings, which would involve a plan to pay off the existing debts owed to the creditors. Surprisingly, last January Shelbourne filed a reorganization plan seeking court approval to move forward with an investment of up to $135 million from Atlas Apartment Holdings LLC, a Northbrook-based apartment development and management company. According to the article, Shelbourne has stated that the amount would enable it to pay all bona fide bankruptcy claims in full and as part of the deal Atlas would become a stakeholder in the development project for the site. There is no detail in the court documents about the additional funds needed to construct the twisting, 2,000-foot tower that was to be the tallest building in the Western Hemisphere. Nonetheless, it appears that actions are underway to continue work on the once famous Chicago Spire.
 Mary Ellen Podmolik, Chicago Spire developer gets funding, wants to resume project, Chicago Tribune, Feb. 7, 2014, available at http://www.chicagotribune.com/business/breaking/chi-chicago-spire-20140207,0,6626095.story. All factual statements and inferences contained in this blog post have been drawn from this Chicago Tribune article.
The United States Constitution declares in its preamble that the American government operates “to promote the general welfare.” To achieve this end, federal, state, and local governments regularly implement laws. But, to the dismay of racial minority groups, many of these laws often seek to promote the general welfare of some citizens, not all. Housing law, in particular, is a perfect example of the systemic discrepancy in governmental execution, as the provision of sufficient housing is still a racially divided and racially influenced matter.
One should take note that the Constitution declares every American citizen is entitled to the unalienable rights of “life, liberty, and the pursuit of happiness.” This grandiose language can be pragmatically interpreted to suggest that these rights include the ability to freely purchase and rent property. For Black Americans, however, this right, was, and still is, very much context specific. Historically, Black Americans were not given the unalienable right to freely purchase or rent property in white neighborhoods. Prior to the 1950s, Black Americans were lawfully kept out of white neighborhoods through use of racially restrictive covenants. For example, deeds or lease agreements would often include these covenants to prohibit residential properties from being occupied by Black Americans. However, the landmark United States Supreme Court case, Shelley v. Kraemer, turned the use of racially restrictive covenants on its head. The Court in Shelley established that the enforcement of a racially restrictive covenant in state court created an equal protection cause of action in violation of the Fourteenth Amendment.
The effort to abolish racial segregation in housing did not stop with Shelley. Congress passed the Fair Housing Act of 1968. This federal law prohibits discrimination in the selling and renting of homes on the basis of race or color. Yet, after this law surfaced, Black Americans were still forced to live in segregated and impoverished neighborhoods primarily due to racial tensions and local residential zoning laws.
Zoning is a method used by local governments to regulate land use. For example, local governments can designate certain regions of their municipalities for residential, commercial, or industrial uses. Ordinances may even specify the type of structures permitted to be developed on a plot of land. Local governments can draft zoning ordinances in such a way as to promote the interests of some of its citizens, while excluding others, especially Black Americans. Because Shelley v. Kraemer and the Fair Housing Act taught the country that overt discriminatory practices in housing were unacceptable, exclusionary zoning practices were put into full effect. Rather than overtly declare that Black Americans were prohibited from moving into white neighborhoods, zoning ordinances established development requirements or restrictions to make it nearly impossible for Black Americans and low-income individuals to afford housing. For example, an exclusionary zoning ordinance might impose strict density restrictions, thereby prohibiting the development of multi-family housing structures. Alternatively, the ordinance might mandate a lot size requirement to promote development of single-family homes, which require purchasers to secure home-loan financing from a bank. These ordinances increase the amount of housing or development costs, closing the door to housing opportunities in the face of low-income individuals. Using these zoning laws, local governments can effectively ensure a type of socio-economic segregation, which consequentially has a disparate impact on low-income Black Americans.
A relatively recent example demonstrating the use of exclusionary zoning occurred in Westchester County of New York. In 2006, the Anti-Discrimination Center sued Westchester because of its racially segregated towns and exclusionary zoning practices. In 2009, Westchester County and the Department of Housing and Urban Development (HUD) entered into a settlement agreement, requiring Westchester to build 750 affordable housing residences in an effort to promote racially and economically integrated societies. Although Westchester was ahead of schedule with the development of these residences, the county placed these homes far from affluent white communities governed by exclusionary zoning laws. The settlement agreement provided that Westchester County must promote nondiscriminatory housing practices such as eliminating any zoning rules that prohibit the development of affordable housing. However, the County Executive, Rob Astorino, vetoed a bill that would require landlords to accept government vouchers as rental payments in affluent areas. According to Astorino, he vetoed the bill to take a stand against unwarranted invasion by HUD and the federal government.
To be sure, Astorino’s stand for federalism and state power is severely misplaced when asserted in the context of racial and economic disparities in housing. Exclusionary zoning practices are the modern day representations of the “racially restrictive covenants” once banned by Shelley. These practices represent failed equality in the housing market for racially and economically diverse groups. These practices further drive a dagger into the beating pulse of the promise made by the Constitution that all citizens have the unalienable rights to life, liberty, and the pursuit of “property.” Finally, these modern day practices signify a loud crying contradiction to the American government’s declaration to promote the general welfare of its citizens. The preamble could quite literally read “We the people . . . promote the general welfare [of our economically valued white citizens, while disregarding the basic needs of the urban black poor,]” and it would appropriately capture the sad reality of our housing system today.
I started out writing this blog on a positive note. I wanted to discuss Veterans Treatment Courts (VTC’s). I wanted to highlight how helpful VTC’s are because they bring together resources that a veteran would otherwise not reach out to or know about. I wanted to talk about how these VTC’s actually work to “cure” criminal behavior by cutting through the symptoms and addressing the underlying causes. I wanted to point out the low recidivism rate of these treatment courts. And then I did my background research regarding veterans and mental health. As a veteran, I knew the numbers were bad. I knew that America was sending its best and brightest off to fight in two wars that it lacked the resolve to commit to. I knew my brothers and sisters were returning home with hidden injuries. I didn’t realize how bad the situation was. At this point, the focus of this article will be just to highlight some of the astounding numbers in order to raise your awareness level.
We should first talk about suicide. Twenty-two veterans a DAY commit suicide. Let that number soak in for a minute. Approximately every hour a veteran takes his or her own life. Think about that next time you are sitting around in class, watching the clock tick down. And this number is probably severely under representative of the true number of veterans that take their life on a daily basis because a few large states aren’t included in this report (California and Illinois). I don’t have some deep analysis about why this is happening. I’m not here to analysis the way the VA and the Armed Services are attempting to combat this epidemic. I’m only letting you know it is an entirely unacceptable state of affairs. The most powerful country in the world should not ask its citizens to serve in its defense and then allow this to occur.
The numbers for other problems aren’t any prettier. Some studies estimate that one in three veterans returning home from Iraq or Afghanistan suffers from either Post Traumatic Stress Disorder (PTSD) or depression. A RAND Corporation study, published in 2008, looked at 1.6 million veterans since 2001 and concluded that forty-seven percent of veterans returned home from Iraq or Afghanistan with either PTSD, depression, or a traumatic brain injury (TBI). The study went on to mention that a lot of veterans returning home had various combinations of the above mentioned conditions. Additionally, twenty-percent of veterans turn to heavy drug or alcohol use when they return home. Between 2005 and 2006, the number of veterans still in the Army that were involved in an alcohol related incident exploded from 1.73 per 1,000 soldiers to 5.71 per 1,000 soldiers.
I devoted this whole article to the numbers because I think just including a paragraph or two in a larger article on VTC’s would sell the problem short. This is a legitimate crisis, and with the wars winding down, many veterans are leaving the military support structure and reentering the civilian world. When I talk about VTC’s and their importance in a later blog post, it is important to comprehend the sheer enormity of the problem that society and civilian courts will face in dealing with a segment of the population that sustained these hidden wounds while serving their country. Veterans don’t need fancy beer commercials. They don’t need you to stand at a baseball or football game when the national anthem is played and they don’t need you to stand up and clap when a veteran is honored at a sporting event. They need contributions to programs like VTC’s, job training programs or other reintegration programs.
The amount of work that a lawyer has for a given week often ebbs and flows. One week you will have more than you can handle, while the next week you will have barely enough to keep you busy. When you’re lucky, lawyers can manage their workload based on their own personal preferences and schedules. However, sometimes outside circumstances, such as supervisor or client requests, dictate the times in which work must be completed, and you must hurry up and wait.
Tasks and projects that require fast work surface often in the legal field. Sometimes, your supervisor requests that you write a brief, pleading, or research memorandum. While you are more than willing to complete the task, often your supervisor’s given deadline may be far less desirable than you wanted. Other times, one of your clients may request that you do an initial draft of a contract or give her an answer on a legal question. Once again, even though you may genuinely want to do the work, her expectation of when you can reasonably finish it may be unrealistic. Despite being doubtful that you can finish the projects on time, you always defy all odds and get it done in time – even if it means pulling a late night.
Getting a project done within the requested time frame can give you both a sense of relief as well as a sense of accomplishment. Since you were given such a strict and short time frame within which to complete the project, you would expect to have feedback or comments on the project very quickly, if not immediately. However, that is not always the case. Sometimes your supervisor or client gets busy and cannot offer you any sort of response to the work that you have accomplished. Although you may have skipped meals and sleep in order to get the desired product finished, they may not even look at it that day – or even that week! It’s not that your hard work has gone unappreciated or unused, but it has just not received the immediate attention that it seemed to require, especially based on the short time frame within which you had to complete it. It often seems strange that you had to rush and stress so much just to have your work put on the back burner.
Although it can be incredibly frustrating to be forced to hurry up and wait, it is also important to remember to value the free time that you have as a result. Even though your work on the project may have consumed all of your time and exhausted you, it is now done, and you can relax for the time being. While you are waiting on your supervisor or client to give you their feedback on the project, you can complete other tasks or work that you have. Or even better, maybe you could just take a break. Despite any frustration that may accompany the hurry up and wait paradigm, it is always important to remember that in the busy life of the lawyer, lulls in work are hard to come by, so they should be greatly appreciated.
Many lawyers, especially transactional lawyers, must depend on and work with various individuals, both inside and outside of the legal profession, in order to get projects done. Sometimes things go perfectly. The project gets done on time, and it seems like it’s from a dream. However, sometimes things go wrong. The project is not done on time, and it seems like it’s from a nightmare.
This post will analyze a hypothetical situation in which a team of student lawyers is required to work with an individual outside of the legal profession in order to complete a project for their client. In this particular scenario, the individual who was assisting the team has failed to complete the project as requested by the team and required by the client, delaying the delivery of the final project to the client by an entire month. The analysis below presents some hypothetical ways to incorrectly react to the individual’s failure to complete the project based on the needs of the team and the client, followed by some suggestions for how student lawyers should appropriately deal with these types of situations.
What NOT to do: being too passive
1. Just wait to see what happens. Maybe the individual will realize what she has done wrong and contact you concerning how you can work with her to remedy the problem.
2. Send a gentle, confused email. Who knows, maybe the details about the project were somehow lost in translation. A reminder email might stimulate the individual to remember your explicit and clear details about how the project should be completed.
3. Avoid the individual. Maybe the pressure of the deadline was getting to the individual and she needed some distance. Perhaps once you give her a little space, she will deliver a stunning, new project that is exactly what you wanted.
4. Try to fix the project yourself. I mean, its totally outside of you area of expertise, but in order to get things done the way that you want, sometimes you just have to do them yourself.
What NOT to do: being too aggressive
1. EMAIL, EMAIL, EMAIL. They can’t ignore you forever. If it takes bothering them to get what you want, then fine. Everyone is busy, so they should be able to get back to you in at least one of the ten emails you sent them.
2. Send a rude, demanding email. If they’re not going to take you seriously, show them you mean business by sending a threatening email. Sometimes being nasty will get your point across.
3. Yell and pick a fight with the individual. Show her who’s boss by intimidating her. You want her to know that this is your project and you don’t want her to mess it up.
4. Call the individual’s supervisor. If the individual you’re working with doesn’t want to help you, then go above her head. Demand to speak to her supervisor – the supervisor will surely understand your point of view and fix the problem for you.
Finding the right balance
Each of the above actions is an extreme example of an ineffective way to deal with an individual who has failed to deliver the project in the way that the two of you had agreed. Every student lawyer needs to find his or her own voice within the clinic and figure out the best methods for clearly communicating with individuals in order to achieve the desired final project. In most situations, the best way to manage individuals who are helping with your project involves finding a balance of all the methods mentioned above. It is important to be assertive with the individuals you are working with, but to also give them room to do their job as well. It is crucial to gauge each particular situation to figure out what tactic will be the most effective in order to get the project finished. This is a skill that every student lawyer must develop, and it just takes time and experience to find the right balance when working with individuals on projects.
The author is a current student in the DePaul Housing and Community Development Legal Clinic. The opinions expressed here are those of the author and do not represent the opinions of the Clinic, the law school or the University.
In my last blog, “Money Makes Things Happen: What is Causing the Change in Law Schools,” I described how market forces are affecting law schools. Those market forces are tightening the hangman’s noose on law schools. The Wall Street Journal Law Blog reported in October that the number of law school applicants dropped 12.3% from 2012. Total applications took a similar hit and dropped 17.9% compared to last year. In addition, Professor Paul Campos of the University of Colorado reported in his blog “Lawyers, Guns & Money” that approximately eighty percent to eighty-five percent of law schools are currently running on operating deficits. Campos says, “Since 2010, first-year law-school enrollment is down nearly 25 percent and tuition revenue is down by about 15 percent in real terms.” He goes on to state that costs have not declined in a similar fashion, resulting in the operational deficits.
With this new information, it is irrefutable that law schools must adapt or die. The real questions are (1) will a particular law school adapt or die and (2) if a law school adapts, how will it adapt. In the following section I will address question number two and describe a few of the larger scale ideas floating around on how to change law schools.
- Dissolving or Reforming the ABA: This isperhaps the most sweeping reformation idea out there. The argument put forth in support of this action is that because the ABA over regulates the law school industry through accreditation requirements, the law school industry has been hampered from adapting to market changes. I think reforming the ABA accreditation requirements is a very real possibility and will allow law schools the ability to adapt to changes in the market. I do not think dissolving the ABA is a good idea because its regulation of lawyers greatly benefits our profession. The ABA’s regulation of lawyers allows clients to bestow an incredible amount of trust and confidence in us as lawyers. Reform the ABA accreditation standards, but keep the ABA. The other critique of this course of action is that it does nothing right away to alleviate the glut of new lawyers.
- Dissolving Third Tier Law Schools: This would provide immediate relief to the problem of more lawyers being produced than there are jobs for. In addition, demand for the remaining law schools would immediately pick up, perhaps alleviating some of the budget problems discussed below. The problem of how this would be accomplished is perhaps insurmountable. The ABA certainly doesn’t possess the power to just simply “dissolve” a law school. If the free market supports a third tier law (a problem that might work itself out if the budget predictions of Campos are to be believed and given time) school than there are no straightforward ways to end the law school.
- Dis-enrollment of the Bottom Third of 1L’s: One suggestion is that after first year grades are received, some of the third and second tier law schools dis-enroll the bottom third to quarter of students. Some schools, like John Marshall, already have practiced this. This addresses some of the problems of lawyer over production, but would have to be practiced nationwide to address the scale of lawyer over production. One problem is who would mandate and enforce this practice? If too many schools practiced this there would be a weird “race to the bottom” situation in which students began applying to lower ranking schools to avoid the risk of dis-enrollment in higher ranking schools.
- Shortening Law School: This is the most likely change to occur. Earlier this year President Obama spoke out in favor of shortening law school to two years. Even some in the ABA have spoken favorably about this change. The immediate impact is less student debt for a law school graduate. But does this really address the problem of too many lawyers? I like this change and I think it is about time (ABA has discussed this since the 70’s), but I don’t see this addressing the core problem of too many law schools graduating too many lawyers.
I hope that the sheer scope of some of these actions drives home the point that law schools are on the precipice of change. The very fact that some of these actions are being debated shows the seriousness of the challenges facing the legal education industry. This coming change will be enormous in scope and unavoidable. Eventually you adapt or die, and I’m not sure which one law schools are going to choose.
The author is a current student in the DePaul Housing and Community Development Legal Clinic. The opinions expressed here are those of the author and do not represent the opinions of the Clinic, the law school or the University.
According to an October 17, 2013 article in the Chicago Tribune the Chicago Housing Authority may be considering changing the policy on allowing ex-offenders in public housing. Ex-offenders have long faced barriers when trying to gain access to public housing. Currently HUD requires public housing authorities to establish a lifetime ban on admission for people who have produced methamphetamine and sexual offenders who are subject to a lifetime registration requirement. Local public housing authorities, however, are able to add their own restrictions on top of those that are federally required. The CHA denies applicants for Housing Choice Vouchers if either the applicant or a household member has engaged in drug-related or violent criminal activity during the 5 years prior to screening. Often though, when enforcing the waiting period the CHA looks at when the ex-offender was released from prison and not at when the offense took place. This means that many ex-offenders are denied access to public housing many years after their offense took place.
While many people may support denying ex-offenders access to public housing, they may not realize the consequences. Homeless shelters are often the only place these people have to go, the Chicago Tribune article cited a study that showed 48% of the people using homeless shelters in Chicago are ex-offenders. Because CHA includes household members as those who are banned, often this means that families cannot be reunited for fear of losing housing for the entire family. Juvenile offenders are not exempt and cannot rejoin their parents' household so they lose out on the support system their family may be able to provide, a support system that is essential to their successful rehabilitation in many cases. Ex-offenders without stable housing, and without support systems are more likely to re-offend, yet the CHA has prevented them from having either.
While the CHA has made nothing official, former CHA CEO Charles Woodyard seemed to suggest that the Authority was open to the idea. The problem now is how to implement it. How can you explain to the residents of mixed-income developments, which were developed partially as a response to the crime of former CHA buildings, that they will now be living next to ex-offenders? How will the screening process work? Which offenses will no longer require a waiting period? What will CHA do to ensure these developments remain safe? Undoubtedly there will be many opponents to allowing ex-offenders access to public housing, but it's also clear that something needs to change.
You want to sell your house. You have a showing today -- potential buyers are going to look around your house, and if they like what they see, they’ll make you an offer. You’ve just finished raking the leaves and cleaning up outside, making sure your house looks good from the moment those potential buyers step out of their car -- curbside appeal, your real estate agent likes to call it.
You look down the street. A little ways down, a house has stood abandoned for almost a year. The family that used to live there couldn’t afford the mortgage payments -- nice people, maybe not so good with money -- so they left. They said they were going to move in with family down south until they got back on their feet.
Wherever that family moved, they aren’t taking care of the lawn anymore. The dead yellow grass is maybe a foot high, the dead yellow weeds are twice that tall, and there are dead leaves everywhere. That abandoned house’s curbside appeal is zilch, worse than zilch, and it makes the whole street look pretty bad -- makes it look like a street potential buyers don’t want to live on. You know the people coming to see your house today are going to take one look at that abandoned home and its overgrown yard, and think twice about making an offer for your house.
Sure would be nice if someone would at least take care of that lawn. To get that done, you have a couple of choices:
(a) You can call the bank that has the mortgage and ask them to take care of the lawn. Assuming you can find the right person to talk to at the bank -- not a very safe assumption -- it’s not very likely they’ll take care of it by the time of your showing, if they take care of it at all. Banks are in the business of lending money, not landscaping.
(b) You can call the village and ask them to take care of it. They might take care of it . . . eventually. Not by this afternoon, though. And when they do take care of it, you’ll think that’s pretty neighborly of them . . . until you realize that you and your neighbors have to pay for that service with property taxes.
(c) You can do it yourself. But you have to leave for work, drop the kids off at school, run some errands -- do something other than take care of that lawn down the street -- so there’s not enough time. And why should you have to take care of someone else’s lawn?
(d) You can hope the potential buyers don’t notice.
Out of necessity, you opt for (d). The potential buyers, though, will notice, and even if they make you an offer on your house, it will be lower than you wanted -- all because of that abandoned house down the street.
Recently, the clinic team working with the Institute for Housing Studies (IHS) was researching real property liens and prioritization of liens. IHS was interested in understanding liens for several reasons; one of those was the possibility that a municipality might be able to use liens to acquire blighted properties. Ultimately, though, our conclusion was that liens were a poor tool for acquiring blighted properties, in part because the foreclosure process is so slow. In Illinois, foreclosure is estimated to take almost two years.
Earlier this year, the Illinois General Assembly recognized how slow the process was, as well as the damage blighted property can do to a municipality, and passed legislation to speed up the foreclosure process for abandoned residential property.
A lien represents a debt owed to the lien holder, and this lien is secured by property owned by the person who owes the debt. In effect, the property serves as collateral for the debt. To collect on this debt, a lien holder can institute foreclosure proceedings against the property. The end result of these proceedings is that the property is sold at auction, and the debt owed to the lien holder is paid out of the proceeds, if any, of that sale. In the case of one category of blighted property, abandoned residential housing, the additional advantage for a municipality is that the vacant house moves back onto the market.
For abandoned housing, the current owner is no longer taking care of the property, and the costs for keeping up the property -- clearing weeds, boarding it up to keep children or other people out, and otherwise ensuring the property doesn’t present a danger to the community -- fall on the municipality, which means it falls on the residents of the municipality by way of taxes. By moving the property back on the market, the abandoned housing now has a new owner who can take care of it and, more importantly, pay for its upkeep.
A municipality derives a further benefit by getting the abandoned property resold to an owner who will regularly pay property taxes. A municipality relies on property taxes for a large part of its revenue, and those taxes are based on the value of property within the municipality. Neglect of an abandoned property not only decreases its own value, it also has a negative impact on other property in the area, so property values go down, and when property values go down, so do tax revenues. The longer a property remains vacant, the more harm it does to property values, and the sooner the property moves back into the hands of an owner, the sooner it stops losing value and harming the value of near-by properties.
To help alleviate this problem, the Illinois General Assembly amended act 735, section 5 of chapter 735 of the Illinois Compiled Statutes to provide for fast-track foreclosure. To take advantage of this, a lender (the mortgagee) must file a motion requesting an expedited foreclosure process, and the court must establish that the property is abandoned.
Characteristics of abandoned property are set out in the statute, and the property must meet at least two of these. These characteristics include “doors are smashed through, broken off, unhinged, or continuously unlocked,” “law enforcement officials have received at least one report of trespassing or vandalism or other illegal acts being committed at the property in the last 6 months,” and “the property has been stripped of copper or other materials, or interior fixtures to the property have been removed.” There are also exceptions to ensure the property is truly abandoned including the posting of bona fide “for sale” signs, and the building is secure and “in substantial compliance with all applicable ordinances, codes, regulations, and laws” as evidence the home isn’t abandoned.
If the court grants this motion for an expedited foreclosure, the process is potentially reduced from almost two years to 90 to 180 days.
To further aid municipalities, the General Assembly also enacted a fee schedule for foreclosures. This schedule charges a foreclosure filing fee based on the number of foreclosures a lender files in a calendar year, and a percentage of these fees go to municipalities to help defray the cost of maintaining abandoned housing, with the rest going to housing counseling programs in the state.
Some estimates report that 18,000 homeowners a year might benefit from the housing counseling, and being able to expedite the foreclosure process could save lenders $43,000 to $89,000 per property.
All-in-all, these new statutes provide a good incentive to lenders for quickly dealing with abandoned properties and helping municipalities alleviate some of problems that arose after the mortgage crisis.
The author is a current student in the DePaul Housing and Community Development Legal Clinic. These are the opinions of the author and do not represent the opinion of the law school or University.
When applying for the community and housing development clinic in the spring of my first year of law school, a barrage of questions flooded my mind: Do I know enough? What if my client doesn't like me? What if I get stuck in the role of student? But most of all, the question on my mind was “Am I prepared for this?” The blunt answer to this question was no- not because I didn't have a strong foundation from my first year coursework, but because there was no way a law student could truly prepare for the multitude of experiences and roles they would have to take on in the legal clinic environment. These new experiences are unique to the environment.
Within my first two months at the clinic, I have taken on roles that I could have never anticipated. The legal clinic student, like a practicing attorney, takes on different roles for their clients and wears a variety of hats, if you will.
Clinician as actor
I personally experienced this role quite literally, having to act in legal literacy training videos for my client- a feat I was definitely not prepared to undertake. But law student clinicians as a whole learn to manage their own character when speaking with their client. Though we may not have the years of experience our graduated counterparts have, we too have knowledge and an evolving legal background to be able to efficiently work with real world clients. Presenting this persona is a key element to the clinic that I did not anticipate.
Clinician as teacher
Although the initial thought when entering a clinic would be to take on the role of student, I have found the role as teacher to be equally important. When discussing our cases with our peers in the clinic, it is crucial to be able to articulate and educate them on the legal situations we are encountering with our clients. It is through this mutual teaching that often unexpected and valuable lessons are learned.
Clinician as chef
Yes, I said chef. This is not because we are working with food, but rather like a chef who may be experimenting with a new recipe for the first time, law student clinicians have to adapt to the situation. For many of us who are used to following strict guidelines, and not necessarily swaying from the recipe, it can be a challenge to be dependent on real life clients. Patience becomes a key ingredient. Remaining calm in the face of change or the unexpected often creates a sweet and memorable result.
Clinician as Manager
The role of manager is one of most important roles a student can take on in a legal clinic. Each legal student becomes a manager of his or her efficiency. It is up to the legal student to determine how their time can be most valuable while working for their client. Similarly, it is up to the students to keep their projects on track. This is done through standard communication with clients, but there is also a finesse that comes with this territory that is learned through the management process. Finding the correct tone in order to create a comfortable relationship with the client, while still maintaining an air of authority in order to get tasks accomplished and maintain respect, is a difficult balance to maintain. The clinic environment teaches this invaluable communication skill. Being able to effectively communicate and manage client relations is a lesson that will be forever used.
The legal clinic has taught me so many lessons that I had not anticipated. Beyond the lessons, it has given me the opportunity to step into the shoes of an attorney. Through this experience, I quickly discovered the multifaceted nature of the occupation and it keeps me encouraged for the future. The dynamic environment of the Housing and Community Development Legal Clinic has provided a platform for law students to try out the many different roles they will be expected to take on in the real world. Hats off to you legal clinic!
According to a Chicago Tribune article on August 15, 2013, the American Civil Liberties Union (ACLU) filed suit against the Chicago Housing Authority (CHA) for violating the Fourth Amendment’s proscription on unreasonable search and seizures. The suit was filed on behalf of Joseph Peery, a 58-year-old resident of the Parkside of Old Town Developments. This area used to be the Cabrini Green housing projects. The complaint, found on the ACLU’s website, alleges the CHA’s drug policy forces residents in mixed income housing to submit to a drug test before they are approved and every year they continue to reside in the housing. If the residents fail the drug tests or refuse to take them, they are evicted. According to the complaint Peery has never used drugs and has passed the test for the past four years. He believes forcing residents to submit to the tests is degrading and stigmatizing.
The residents are required to go to the business office, urinate in a cup and hand it to an officer. Peery states the procedure is not done privately and is open for anyone to view. After the residents give their urine samples they are required to sit out in a public hallway holding the cup until they are called. Peery states the process makes the residents feel like criminals even though they have done nothing wrong. There is no age restriction on the policy and Peery has witnessed older women, some who are even disabled, being forced to submit to the testing. This drug policy is not enforced at all CHA residences and it is unclear how they decide which units will have the drug testing enforced. Right now the policy is only being enforced in six of the mixed income housing units. Over the years since the program started only 51 people have tested positive for drugs, which is about 4% of the CHA housing population.
I find myself having mixed feelings over this policy. On the one hand I feel that it is put in place for a good reason. There has been a history of drug use and drug dealing among the residents in the Chicago housing projects. Now that the projects are torn down and these residents are living in mixed income housing I can see why the CHA wants to keep a close watch on drug use. In the mixed income housing units there are both low-income residents who receive vouchers and residents who pay the market rate rental prices. Although the property managers are not supposed to inform the regular residents who is low income and who is not, many residents are at least aware if the property they are residing in welcomes low income residents. I can see the concern some of those residents may have, especially in certain areas, about what is being done to prevent drug use and crime.
The residents of these units argue that just because someone is using drugs does not mean they pose a threat and the CHA should be worried about the drug dealers. While there is a point to that argument, residents could be equally concerned with drug users. If you are living next to people who use drugs their house may become known as the “drug house” where all the other drug-using residents come to do their drugs. This can definitely become problematic and cause the regular residents to move out. Word travels fast and eventually the unit will become known as drug infested and will no longer be mixed income housing. It will eventually become straight low income housing due to market rate residents not wanting to live there, which will make it a housing project like Cabrini all over again. I believe this is what the CHA had in mind when they started enforcing this policy. The policy applies to all residents in the complex and not just the low-income residents.
On the other hand, from the resident’s point of view, especially those who are not low income, I can see their frustration. Having to submit to a drug test before you are qualified to live in an apartment is not a big deal if it is a one-time thing. I think it gives the residents comfort to know that the complex they are moving into has a no tolerance policy for drugs. However, I believe it becomes problematic when you require the residents to submit to this testing every year. Mr. Peery, who has been living at the residence for four years drug free, should not be forced to submit to drug tests every year nor should the disabled and the elderly. People in this age group who have passed the test several times should become exempt after a while.
Overall, I believe the policy needs to be revised. It should not just apply to certain complexes because that gives off the idea that these are the “problem” buildings, which may not actually be the case. If they are going to have a no drug tolerance policy it needs to be uniform and apply to all of the CHA properties. Testing should be done before a resident moves in and again only if the property manager receives complaints from other residents that a person may be using or dealing drugs. This would take away the inconvenience of forcing everyone to take drug tests every year. As someone who has never taken drugs in my life I can see how insulting it would be for my complex to all of a sudden make me submit to random yearly drug tests.
If the CHA wants to continue the yearly testing, certain people should be able to be exempt after a while unless there is a complaint. If you are a resident like Mr. Peery, who has been testing positive for years and is not a known drug user, then I believe the policy should be waived. The same goes for the elderly and disabled. I do not believe 70 and 80 year old men and women should be subjected to these tests if they have not failed in the past. The location and setting in which the testing is done needs to be changed as well. If it is as Mr. Peery describes it, that is not fair or adequate. The testing should be done in private at a testing facility and not at an office open to the public where the residents being tested are put on display. It is going to be very interesting to see how this lawsuit turns out and what changes the CHA will make in the mean time.
In law school we learn the law; we read cases and then spend hours trying to understand them enough to be able to apply them to fact-patterns our professors write. We rarely, however, spend much time thinking about the impact of these laws on the individuals and communities they affect. We never discuss how the law can be used to help people.
When I joined the Housing and Community Development Legal Clinic it primarily interested me as an opportunity to learn more about real estate and to gain more transactional experience. To be honest, I wasn't very interested in the community development aspect of the clinic. Then I began to meet with some of the clinic's clients.
The people I've met devote their lives to helping strangers, whether by developing affordable housing or trying to help bring businesses in to revitalize underdeveloped communities. These people don't do this for the money. They aren't interested in prestige; they truly just want to make a difference. And my job is to help them understand the laws that make this possible.
For the first time in law school my job is not to memorize and overanalyze laws that seem to have little relevance to anything. Instead my job is to find laws and regulations that can assist my clients in helping achieve their goals. For the first time I'm reading laws and applying laws that can have a huge impact on some of the most underrepresented groups in our society. Through tax incentives and other programs, legislatures, who often seem so removed from the "real world", are able to remove the economic barriers that might otherwise prevent people, like those I've met, from being able to have a meaningful impact.
This has been by far the most exciting part of my time in this Clinic. I actually am able to see how our clients, who so truly want to have a positive impact, will be able to use the laws in place to help them help others.
The author is a student in the Housing and Community Development Legal Clinic. These views are solely the views of the author and do not represent the views of the Clinic, the Law School or the University.
According to a Sept 23, 2013 article in the Chicago Tribune, the City of Chicago has pledged $33m to help construct a new event center as part of a revitalization project for the McCormick Place Entertainment District. Dubbed the “DePaul Arena,” the proposed event center will cost $173m to construct. According the Chicago Tribune, DePaul University has allocated $70m to the project, the Metropolitan Pier and Exposition Authority (“McPier”) has pledged an additional $70m of general revenue backed bonds, and the City has pledged the remainder $33m to the project to be paid from Tax Increment Financing (“TIF”).
The article goes on to state that the
proposed DePaul Arena will be a 10,000-seat event center adjacent to the McCormick Place West building that will host conventions and trade shows as well as the DePaul University men and women’s basketball teams. The event center is scheduled for completion in the fall of 2016 and is considered a key feature of the planned McCormick Place Entertainment District which also includes a 1,200 room hotel owned by McPier and operated by Marriot Marquis. According to the Tribune, the City and McPier have mapped out a 12 block area adjacent to McCormick place as the McCormick Place Entertainment District in its plan to revitalize the area. The plan hopes to encourage new business and jobs and attract a modern night life as well as increase the competitiveness of the McCormick Convention Center. The DePaul Arena is described as an important step towards accomplishing the goals of the revitalization project. The hope is that DePaul basketball will draw in a younger, vibrant crowd during basketball games as will entertainment headlines and convention events hosted at the arena.
One of the the most controversial issues with the project is the City’s use of Tax Increment Financing. TIF is a special type of Economic Development Incentive (“EDI”) utilized by many cities throughout the nation. The funding for specific projects is generated by growth in the Equalized Assessed Valuation (“EAV”) of properties within a designated district over a 23 year period. The amount of property tax the area generates is set as a base EAV amount. As property values increase, all property tax growth above that amount is used to fund redevelopment projects within the district. The increase, or increment, can be used to pay back bonds issued to pay upfront costs, or can be used on a pay-as-you-go basis for individual projects.
By using TIFs, the City argues it can stimulate growth in an impoverished or blighted neighborhood. Successful revitalization projects can reduce vacancies, decrease crime, increase property value, incentivize property owners to improve and increase housing, reduce urban sprawl, and invigorate an otherwise declining property market. However, these benefits can also come at the cost of the current identity of the existing community. Using TIFs to fund redevelopment assumes that property values will continue to increase sufficiently to fund the balance of the project. This approach often relies on gentrification of neighborhoods which can have a detrimental effect on the existing population living within the community. The most notable effect is the displacement of residents due to the increase in home prices and rent, the burdens placed on surrounding communities due to displacement, and potential resentment between existing residents and new ones. Logically it would seem that community input is essential to community revitalization, but too often this is over looked. The City and McPier should do their utmost to solicit community input into the overall revitalization project. Hosting community input meetings, conducting community input surveys, and working with existing community organizations can help reduce the negative side effects while reaping the many rewards that follow a successful revitalization project.
Kathy Bergen, McPier Board OKs DePaul Arena Design, Chicago Tribune, Sep. 23, 2013, http://www.chicagotribune.com/business/breaking/chi-depaul-arena-mcpier-20130923,0,19653.story.
The author is a current student in the DePaul Law School Housing and Community Development Legal Clinic. The opinions expressed in this blog are that of the author and not of the Clinic, the Law School or the University.
Recently, while preparing for my first client meeting as a student in the Housing Legal Clinic, it occurred to me that for the first time in my life, I had to play the role of a real lawyer. I found this idea very alarming. I was a student. I have always been a student. It is all I know. Seriously.
Recently, while preparing for my first client meeting, it occurred to me that for the first time in my life, I had to play the role of a real lawyer. I found this idea very alarming. I was a student. I have always been a student. It is all I know. Seriously.
In fact, beginning in 1994, I have been a student for 19 consecutive years. After high school, I went straight to college to get my B.A., and after college I went straight to law school to get my J.D. Of course, I have had a few part-time jobs in the interim, working as a host, deli clerk, tutor, and server – I have even worked as an intern at a law firm. But despite all of these minimum wage experiences, I still had only mastered the occupation of “student.”
So there I sat, creating an agenda for my first client meeting, feeling quite lost. I already knew the project that I would be tackling for my client, but I had no idea how to elicit the information that I needed in order to proceed.
I found myself typing questions like, “What do you want done next,” “How would you prefer the project completed,” and, “When would you like it completed.”
As a student, and even as a law intern, these are typically the questions that I ask. In fact, a good student should ask these questions, and then simply comply with the answer given to him or her. But, unlike a student, a lawyer cannot simply ask the client for all of the answers concerning how to move forward in a case.
That is not to say that a client’s opinion on matters is irrelevant, but the client cannot be the one who independently decides the deadlines and subsequent steps in the case. The lawyer must work alongside the client to decide what the appropriate next steps in the case should be. Eliciting this information may seem simple, but when you have only ever taken direction in your life, turning the tables and leading a project can be quite daunting.
After some collaboration with my teammate and professor, I was finally able to begin understanding the tricks to running an effective client meeting, and my first client meeting was a success. I had reformulated my previous questions to be statements like, “We think that these might be appropriate next steps,” “The project could be completed in these ways,” and “We anticipate that the project will be completed by this date.” Following each of these statements, of course, the client was given the opportunity to voice any concerns or questions about the proposed proceedings in the case, and decisions were made based on our collective thoughts.
Rather than looking to the client to give me the answers that I naturally wanted by virtue of being a student, I was able to work with the client to arrive at those answers together, and it definitely worked. I had taken one step away form being a student, and one giant leap toward being a lawyer.
Needless to say, I still have a long way to come in regards to perfecting my lawyering skills, but I think it is safe to say that I am on my way.
The author is a student in the Housing and Community Development Legal Clinic. The opinions on this blog are that of the author and do not represent the opinions of the Clinic, the law school or the University.
“Tax Credits are like Carrots on a Stick for Companies”
One of our Clinic’s projects deals specifically with the federal Low-Income Housing Tax Credit (LIHTC). LIHTC incentivizes investors to provide capital to developers to help fund affordable housing projects. Investors, in turn, receive substantial decreases in their tax liability through application of the tax credit, which is typically awarded for a span of 10 years. As with most incentives, there follows a list of mandatory requirements.
“Tax Credits are like Carrots on a Stick for Companies”
A fundamental premise of psychology is that most people, absent the altruistic few, behave in ways to improve their circumstances. In the context of business, most often, that behavior involves making a decision to yield increases in one’s wealth. This desire for self-gratification is a mere innate quality, but it makes the topic of tax incentives an interesting concept to study.
Of course companies are interested in maximizing profit, so they are not eager to spend money on an unprofitable project. So, how does one encourage a multimillion-dollar company to invest money into the development of affordable housing? Well, what would one do to get an apathetic teenager to clean his room or an unrelenting toddler to eat her vegetables? Simply put, provide them with an incentive. To induce most individuals to perform a desired behavior, the targeted individual must know that the behavior will yield a favorable outcome for him or her. Perhaps that inducement comes in the form of money for the teenager or a cookie for the toddler. Tax incentives operate much the same way for businesses. For example, to induce a business to invest into affordable housing (i.e., the desired behavior), the government will offer tax credits (i.e., the incentive). Tax credits provide the company with the opportunity to substantially decrease the amount of tax liability it owes to the federal government. And you would be hard pressed to find a company that does not want to limit its tax liability!
One of our Clinic’s projects deals specifically with the federal Low-Income Housing Tax Credit (LIHTC). LIHTC incentivizes investors to provide capital to developers to help fund affordable housing projects. Investors, in turn, receive substantial decreases in their tax liability through application of the tax credit, which is typically awarded for a span of 10 years. As with most incentives, there follows a list of mandatory requirements. Under LIHTC, the developer is not granted the tax credit until he or she has sufficiently completed the affordable housing project to the satisfaction of the governing state agency in charge of administering the credits. If the project fails to comply with the mandatory requirements, the developer does not receive the tax credit and the investor cannot decrease its tax liability. With this particular scheme in place, both the investor and the developer will work diligently to deliver a satisfactory project; much like the teenager will clean his room better than a hired professional and the toddler will scrape her plate clean of any vegetables, all because the incentive is worth it!
In a related discussion, Brazil demonstrates how it effectively uses tax incentives to generate economic development. The Wall Street Journal recently reported that the Brazilian government increased taxes on imported foreign cars, but offered tax brakes to companies opting to manufacture their cars in Brazil under its program called “Inovar-Auto.” BMW was the first company to take advantage of the lower tax bill and Audi is likely to follow suit in 2015. These incentives offer financial benefits to the car manufacturers and they strategically provide mediums to stimulate Brazil’s economy by creating jobs. In short, we learn that tax credits are financial carrots on a stick for businesses. If the government presents a good enough tax incentive (i.e., carrot), the company will likely operate in the manner the government desires, whether it is investing in affordable housing or opening manufacturing plants on foreign soil.
The author is a student in the DePaul Law Housing and Community Development Legal Clinic.
The Housing & Community Development Legal Clinic at DePaul University College of Law provides corporate and transactional legal assistance to organizations working in affordable housing and community development.
DePaul law students participating in the Clinic will offer posts about current issues in affordable housing and their experiences in the Clinic. We invite you to learn more about us by following our blog or visiting our webiste. If you are an organization working in affordable housing and community development interested in working with the Clinic, please contact us for assistance.
A group of people have gathered outside the door of a unit in a condo building. They’re frustrated. They’re angry. They’re the members of the condo association’s board, and one of the unit-owners in their building is behind -- way behind -- in paying his assessment fees. If the board doesn’t get the money from him, everyone else in the building (including the angry members of the board) will have to pay more -- all of this because one unit-owner hasn’t paid
A group of people have gathered outside the door of a unit in a condo building. They’re frustrated. They’re angry. They’re the members of the condo association’s board, and one of the unit-owners in their building is behind -- way behind -- in paying his assessment fees. If the board doesn’t get the money from him, everyone else in the building (including the angry members of the board) will have to pay more -- all of this because one unit-owner hasn’t paid
He agreed to pay the fees when he purchased the condo. Those fees are his share of the upkeep for the building’s common areas: its roof and hallways, maybe its elevator if it has one. These are important things -- things that need to be taken care of -- and because one unit owner hasn’t paid, everyone else will have to pay his share.
Maybe the board members sympathize. Times are hard. Economy’s bad. Property values are down. The current value of the condo is less than what he paid for it. But times are hard for everyone. The board members are struggling with the same bad economy. The value of their condos might be less than what they paid, too -- and if they don’t maintain the common areas of the building, the value will drop even more. So they need the assessment fees, one way or the other, and they can’t afford to pay more than they already do.
The board members are frustrated . . . angry. They’ve gathered outside the delinquent unit-owner’s door to get their money, and naturally he isn’t home -- maybe he hasn’t been home for months, maybe he doesn’t even live in the unit anymore. So one of the board members kicks open the door. They charge into the condo unit. They take all his stuff, bring it outside, and hold an impromptu yard sale, keeping their fingers crossed that the unit-owner’s couch, television, computer, and stereo bring a good price -- a price high enough to pay the association fees the unit-owner owes, so they don’t have to.
Those parts about kicking down the door and holding the yard sale aren’t true -- can’t happen, at least not legally -- but that’s what I imagined when I read the following: “Illinois Condominium Property Act allows for the forcible entry and detainer, or eviction, of a condominium owner who does not pay his or her share of common expenses, or assessments, thereby affording condominium associations a unique mechanism by which to collect on a lien . . . .”
I came upon the passage while doing research for the Institute for Housing Studies (IHS) at DePaul’s College of Business. The IHS is dedicated to collecting and analyzing data about housing to help provide affordable housing in Chicago and Cook County. As a part of this mission, it investigates the financial pressures the recent mortgage crisis and current recession are putting on condo associations, and one of these pressures is unpaid association fees.
I was a little bit outraged when I read that a condo association could evict one of its members. He paid for his property. It’s his by right, so how can others in the building take it away? These are private citizens, not the government. Can a utility company evict a person for not paying his bill? And if not, why should a condo association be able to evict a unit-owner for not paying his bill to the condo association? But the reality of forcible entry and detainer is neither as exciting as what I imagined, nor as outrageous as I initially believed, but it is an effective solution to a singular problem condo associations face when confronted with a unit-member who can no longer afford to pay his association fees.
Illinois law allows a condo association, once it has enforced a lien for delinquent association fees, to take possession of a unit. The owner still owns the condo, but he can’t live there. He has the right of ownership, but not the right of possession. Effectively, the condo association has evicted him. In order to regain possession, the delinquent unit-owner must pay his overdue fees. While in possession, the condo association can lease the unit, and through rents, generate income to help defray the cost of the unit-owner’s unpaid association fees. In other words, the other unit-owners in the condominium association don’t have to pay for all the unpaid fees of a delinquent unit-owner out of their own pockets. Instead, they can use the property of the delinquent unit-owner to help pay his association fees.
One situation where forcible entry and detainer is particularly effective is when the delinquent unit owner abandons his condo because he simply can’t afford it anymore. It takes time for ownership of the condo to pass from the delinquent owner to a new one who can pay association fees. Foreclosure is a time-consuming process, and a bank might be slow in starting the foreclosure process. The time it takes is likely measured in years, and those years are in addition to the months of unpaid association fees that drove the association to seek the lien on the delinquent unit-owner’s property in the first place. During those years, the fees aren’t being paid, and being able to lease the condo unit can make up some of the difference. The downside is that it requires the members of the association to become landlords, but in a poor economy, being a landlord might be a better choice than having to pay more money.
While this may seem an extreme solution, the Forcible Entry Act provides a statutory scheme for the condo association assuming possession of the unit. The whole process from obtaining the lien to taking possession requires judicial approval, so there is oversight by the court. Also, the law dictates how the condo association can spend the rent. Broadly, the rent goes to pay the delinquent fees, the costs associated with collecting those delinquent fees, and the current association fees; then the condo association must send any remaining money to the unit owner. As for that couch, television, computer, and stereo I imagined being sold at an impromptu yard sale, the condo association doesn’t get the delinquent unit-owner’s personal possessions. The sheriff is the one who actually does the forcible entering of the condo, and he takes responsibility for the possessions.
The author is a current student in the DePaul Housing and Community Development Legal Clinic. Views expressed on this blog are those of the student author and do not represent the position of the Clinic or the University.