Financial crisis at Heartland Alliance leads to furloughs, program cuts and an attempt to sell hundreds of affordable housing units
One of the city’s leading social service organizations, beset by a pair of financial crises that last year engulfed its housing and health care divisions, could be on the verge of splitting up.
The turmoil at the Heartland Alliance, a sprawling nonprofit encompassing five divisions providing a vast array of social services, threatens to upend important safety net programs at a time when Chicago is experiencing an influx of migrants, many of whom need help with health care and housing.
Heartland Alliance’s housing division, which grappled with inflation and declining rent collections during the pandemic, ceased operations last spring and needs buyers for the roughly 1,000 affordable units it operated in Chicago and Wisconsin.
Heartland Housing notified the city of Chicago in April of 2023 that its ”affordable housing portfolio was in distress and at risk of collapse,” Department of Housing spokesperson Rima Alsammarae said in a written statement.
The nonprofit’s housing arm effectively shuttered soon after. The city filed a motion asking Cook County Circuit Court to appoint a receiver to manage the Heartland Housing properties. The court handed the responsibility of managing Heartland’s assets so that services, staffing, and security were not disrupted to Community Initiatives, which runs the city’s Troubled Buildings Initiative, Alsammarae wrote.
Heartland’s housing portfolio included Hollywood House, a 12-story building for seniors at 5700 N. Sheridan Road in Edgewater, San Miguel Apartments at 907 W. Argyle St. in Uptown, and several Wisconsin properties.
Heartland buildings include many units where residents at risk of homelessness receive services such as mental health care and substance abuse counseling, according to Stacie Young, president and CEO of Community Investment Corp., a nonprofit lender.
“These particular buildings house a vulnerable population and some of the buildings are in high-cost markets, so that makes them even more important to preserve,” she said. High-cost markets are neighborhoods where it would be costly to rebuild or replace lost units.
Heartland’s troubled finances were the subject of a heated Milwaukee City Council committee meeting in June, with members demanding answers soon after Heartland Housing announced it could no longer operate its properties, including several in Milwaukee.
Author: Brian J. Rogal
Chicago Tribune
Feb 5th, 2024
