Chicago’s Heartland Alliance shuts down affordable housing division

Chicago’s affordable housing crisis could get worse due to major changes within a local social service organization.

Heartland Alliance, established in 1888, has shut down its affordable housing division, which oversaw developments in Chicago and Wisconsin, the Chicago Sun-Times reported.

The decision comes in the wake of severe financial challenges that led to layoffs of 65 employees. The organization is working to sell its properties and avoid bankruptcy.

Selling the properties is expected to safeguard Heartland’s other services, which include healthcare and international programs for oppressed individuals, said Heartland spokesperson Ed Stellon.

Heartland’s approximately 1,200 affordable housing units were transferred to receivers in May and June, marking a pivotal moment in the organization’s financial struggles.

The nonprofit is cooperating with investors, receivers and public agencies to facilitate a smooth transition and ensure tax credits remain unaffected, Stellon said.

Former employees voiced grievances, alleging a lack of transparency and violation of the WARN Act, which requires advance notice for pending closures or mass layoffs. Some expressed disappointment with the leadership’s handling of the situation, citing a disconnect between administrative functions and on-the-ground programs.

The organization’s recent tax filing revealed a significant drop in program service revenue over the past several years, the outlet reported.

Heartland’s financial challenges were attributed, in part, to the pandemic, resulting in job losses among individuals with lower incomes who struggled to pay rent.

Heartland’s vulnerability stemmed from its commitment to supporting the lowest income groups, making it challenging to weather the economic fallout of the pandemic, affordable housing experts said.

— Quinn Donoghue

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