City Council CHA Hearing turns up the heat on “Keeping the Promise”

By  Rebecca Burns

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The past performance and the future shape of the Chicago Housing Authority’s Plan for Transformation were the subject of heated debate in City Council on Feb. 17, as CHA CEO Eugene Jones defended the agency’s record and plans while critics demanded the passage of the Keeping the Promise ordinance meant to “hold the CHA’s feet to the fire,” as at least two aldermen said.  

The ordinance could compel the Chicago Housing Authority to draw on its available funds and release more housing vouchers to people like Linda Diaz, a disabled senior who was one of more than 100 low-income residents and advocates at the hearing. It was scheduled as an “informal” preliminary hearing, with no vote taken.

City Council CHA Hearing Turns up the Heat on “Keeping the Promise”
Altgeld Gardens by Claire Pentecost from Flickr CC

Diaz is one of at least 15,000 homeless Chicagoans sitting on a waiting list to receive subsidized housing from the city. She’s been living in a shelter for the past two years, but thanks to new rules limiting residents’ stays, she says she may have to leave next month. She’s not sure yet what she’ll do—during two previous winters, she squatted in a home without heat, but can’t imagine repeating the ordeal in her current health.

Diaz was therefore dismayed to learn that the Chicago Housing Authority (CHA), which oversees both public housing and the vouchers that allow low-income residents to rent in the private market, has been stockpiling its federal funding as the city’s homeless rate rises.

Low-income housing advocates say that the CHA is sitting on more than $430 million in reserves—money that should be used to provide more housing to people in need. In 2014, 282,000 households applied just for the chance to secure a spot on the CHA’s formidable waitlist; those who make it onto the queue typically wait years more before receiving any assistance.

“The City of Chicago has to be responsible for the failures of the CHA,” said Diaz, referring to the ordinance’s new transparency measures that would require the agency to report regularly to City Council on its finances and development plans. Diaz is a member of the Chicago Housing Initiative (CHI), a coalition of eight community organizations championing the measures.

First introduced in 2014 by Alderman Joe Moreno (1st), the ordinance is sponsored by 25 City Council members. That includes Walter Burnett (27th), Susan Sadlowski Garza (10th) and Deb Mell (33rd)—all of whom are members of the Committee on Housing and Real Estate, which held the preliminary hearing. 

The draft measures also aim to protect housing voucher-holders from discrimination, enforce new standards in the city’s redevelopment of public housing, and create safeguards during the city’s participation in the Rental Assistance Demonstration (RAD), an experimental federal program that could open the door to privatization in nearly half the city’s public-housing units. 

Hilliard Towers - part of Plan for Transformation - by Robert Gigliotti via Flickr CC
Hilliard Towers – part of Plan for Tra … by Robert Gigliotti via Flickr CC

Much of Wednesday’s discussion centered on the legacy of the Plan for Transformation, a controversial chapter of Chicago’s public housing history. In 2000, the city embarked on a $1.6 billion initiative to tear down its beleaguered public high-rises, pledging to replace them with 25,000 new or rehabilitated units in “mixed-income” communities. While more than 18,000 units were demolished in the plan’s first decade, rebuilding is now nearly six years behind schedule and still inching towards completion. Advocates say that CHA’s policies have driven thousands of poor, Black residents out of the city.

“Six years later, we’re still short 2,000 units,” said Dearborn Homes resident Etta Davis, a supporter of the ordinance. “We listened to CHA when they said they had a plan, but now we’re asking for a promise in writing.”

The ordinance would require the CHA to report to City Council on its rebuilding progress and replace one-for-one any further public-housing units that are demolished. 

During nearly 11 hours of testimony, several developers and fair-housing groups challenged the idea that these measures would ensure that the CHA keeps its promises to public-housing residents. Instead, said Peter Holsten of affordable-housing group Holsten Real Estate, the changes could spook the developers and investors that the agency partners with, bringing the provision of replacement units to a standstill. 

“The enforcement measures are frankly a little scary,” said Holsten, referencing a provision that allows public-housing residents to bring legal actions against any group that allegedly violates the ordinance. “This will dramatically change the affordable housing climate in Chicago.” 

CEO Jones, meanwhile, assured City Council members that the new measures were unnecessary. Asked about CHA’s vast reserves, Jones said that the agency had been storing up funds during the recession, when new housing construction ground to a halt. But now that development has picked up again, he says, the agency has decreased its reserves to $221 million last year and has a plan to spend them down by 2017. And by the end of the year, the CHA hopes to be using 90 percent of the federal funding it receives for housing vouchers.

Many of the figures Jones threw out have not been verified independently, and housing and transparency advocates are skeptical of these claims. At the root of the problem, they say, is a federal deregulation agreement that Chicago entered into in 2000, when Rahm Emanuel was the CHA’s board vice chairman. 

The agreement, Moving to Work, allows the CHA and a handful of other large housing agencies to allocate federal funding as they see fit, with little oversight. Last year the Baltimore City Paper discovered that the Housing Authority of Baltimore City, another participating agency, had also built up reserves that at their peak topped $150 million. Meanwhile, the housing authority has slashed its workforce in recent years and claimed that it lacked sufficient funds to clean up lead paint that sickened a number of public-housing residents.  

Chicago’s own staggering reserves were discovered in 2014, after a series of public records requests turned up some murky accounting, said Amanda Kass, an analyst at the Center for Tax and Budget Accountability and another proponent of the ordinance. According to her organization’s analysis, between 2008 and 2012 the agency squirreled away much of the federal money allocated for housing vouchers, issuing 13,000 fewer vouchers than it could have each year. 

Instead, her organization discovered, the CHA quietly used $250 million of reserves to pay down its debt early, earning it the highest credit-rating of any public housing agency nationwide. While that makes it an attractive prospect for investors and could entail long-term savings, advocates argue it does little to advance the agency’s core mission of providing housing to Chicago residents.

Last year, the CHA began issuing more vouchers following heightened public scrutiny and a rebuke from the federal Department of Housing and Urban Development (HUD) over its surplus. But Kass said there’s no reason to believe this trend will continue absent a firm requirement on voucher spending from HUD—which the agency briefly considered but now appears to have scuttled—or greater local oversight.

Meanwhile, there’s still reason to question the CHA’s stated intention of spending down its reserves by next year, suggested Alexandra Gilewicz of the Better Government Association. While Mayor Rahm Emanuel has made reference to an approved plan to use the money for key public-housing redevelopment and job-creation projects, she said, the city has refused to provide any version of this plan through public-records requests.

Some aldermen were clearly convinced Wednesday of the case for an overhaul; Ray Lopez (15th) even suggested that the oversight provisions weren’t yet strong enough to effectively “hold CHA’s feet to the fire.” But housing committee chair Joe Moore (49th) repeatedly indicated his skepticism about the “bureaucratic hurdles” imposed by the ordinance and the likelihood that they’d deter private investment. CHI and other community groups have already clashed with Moore, charging last fall that he was delaying a hearing on the ordinance.  Next, advocates will likely pursue another round of revisions to the ordinance.

Chicago’s debate over reforming the CHA is happening in the context of a larger one focused on the future of public housing in the U.S. While housing funded and managed by government is politically unpopular and could soon be phased out entirely through the federal RAD program, many question what will replace it. The “affordable housing” offered by private developers, critics say, is a slippery term that can mask continued exclusion of poor residents. “Affordable for whom? asked Dearborn Homes resident James. “I’ve done the math and we don’t need more ‘affordable housing,’ we need more low-income and public housing.”