Where are Poor People to Live?: Transforming Public Housing Communities

Transforming Public Housing Communities

Larry Bennett, Janet L. Smith, Patricia A Wright

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317452089
• Edition: 1
• Topic: Économie
• Subtopic: Économie du travail

This groundbreaking book shows how major shifts in federal policy are spurring local public housing authorities to demolish their high-rise, low-income developments, and replace them with affordable low-rise, mixed income communities. It focuses on Chicago, and that city's affordable housing crisis, but it provides analytical frameworks that can be applied to developments in every American city. "Where Are Poor People to Live?" provides valuable new empirical information on public housing, framed by a critical perspective that shows how shifts in national policy have devolved the U.S. welfare state to local government, while promoting market-based action as the preferred mode of public policy execution. The editors and chapter authors share a concern that proponents of public housing restructuring give little attention to the social, political, and economic risks involved in the current campaign to remake public housing. At the same time, the book examines the public housing redevelopment process in Chicago, with an eye to identifying opportunities for redeveloping projects and building new communities across America that will be truly hospitable to those most in need of assisted housing. While the focus is on affordable housing, the issues addressed here cut across the broad policy areas of housing and community development, and will impact the entire field of urban politics and planning.

Part II

ON THE GROUND IN CHICAGO

RESHAPING PUBLIC HOUSING COMMUNITIES

4

The Chicago Housing Authority’s Plan for Transformation

Janet L. Smith

Incremental change is not enough. To reshape public housing in Chicago, a new approach is imperative.¹

You have a lot at stake. Do not sell yourself short. Think BIG. Think BOLD. Do the RIGHT THING. Seize the DAY.²

Transformation: a change in form, appearance or structure.³

On February 5, 2000, Secretary of Housing and Urban Development (HUD) Andrew Cuomo went to Chicago to join Mayor Richard Daley, U.S. Congressman Bobby Rush, and members of the Chicago Housing Authority (CHA) board in a ceremony to mark the federal government’s approval of the CHA’s “Plan for Transformation.”⁴ This was a momentous occasion since it meant a commitment from HUD to the CHA for $1.5 billion in funding over ten years to implement its plan. The plan, which at the time was estimated to require at least $3 billion to complete, was to reduce the total number of public housing units in the city from about 38,000 to about 25,000.

With fifty-one high-rise buildings slated for demolition, the scale of change was going to be dramatic. Technically there would be about the same number of units at the end (about 25,000) as there were public housing households at the plan’s beginning. However, the loss of 13,000 units represented about 2 percent of the total rental housing stock in Chicago and over one-third of the total public housing stock in the city. The low number of replacement units was a serious point of concern for residents, affordable housing advocates, and the CHA, for that matter. In the late 1990s, Chicago was showing signs of its first population growth in several decades. Rents and housing values were rapidly escalating while vacancy rates were going down, especially in high-demand areas on the North Side—this despite an apparent building boom. An immediate concern was the fact that the plan required the demolition of most buildings before new replacement housing was constructed, which meant the relocation of an estimated 6,000 families. While some would move temporarily into existing vacant public housing, many were expected to relocate into the private market with Housing Choice vouchers, either on a permanent or temporary basis.⁵

The potential impact of the Plan for Transformation on the housing market was a concern especially following a HUD-funded study that determined that the rental market in the region was “tight,” with a vacancy rate of 4.2 percent.⁶ The figure was even lower in low-poverty and predominantly white areas of the city (North and Northwest Side). This meant that most of the available affordable rental housing was located in “softer” markets on the South and West Sides of the city, which were predominantly African-American and relatively poor. Nonetheless, the CHA decided it could go ahead with the plan. Although it was a tight rental market, the research did not say that the market could not absorb relocated households—just that there was a chance residents might end up in highly segregated neighborhoods.⁷ HUD then agreed to fund the Plan for Transformation after negotiating many major and fine points, including a legally binding tenants’ right to return contract. At the February 5 celebration, Secretary Cuomo offered this reasoning: “CHA has failed … CHA must come down. You can no longer put a Band-Aid on a bullet wound. It is a demolition plan, but it is also a tenant-protection plan, and it will do both equally well.”⁸

This chapter examines how the plan was developed and how it came to be approved even after residents, local leaders, and elected representatives, including Congressman Rush, raised difficult questions to the CHA and HUD about where poor people were going to live after the buildings came down. I begin with a detailed review of the CHA Plan for Transformation itself, including specific unit counts for each development at the time the plan was approved, and an overview of the context from which the plan came. Following this is an overview of the process that gave specific shape to the plan and to the development of subsequent plans for individual sites since the plan was approved.

The Plan

The CHA “Plan for Transformation” was originally published in draft form for public review and comment on September 30, 1999. The final revised version of the plan was submitted to HUD on January 6, 2000.⁹ While not a glossy or highly polished document, it laid out a striking vision of public housing in Chicago that was radically different from what existed at the time. As the CHA described it, the plan

outlined a fundamentally new approach to public housing in Chicago. The case for change was obvious and urgent, including: a high concentration of extremely poor families; a large stock of physically obsolete family housing plagued with crime and drugs; a new Federal policy environment that includes mandatory building closure rules, affirmative efforts to deconcentrate poverty, and stricter performance standards, especially in the area of physical conditions; limited capital funds to meet needs; excessive overhead costs and a lack of internal management capacity; and resident programs that were duplicative, poorly coordinated, and without substantive performance measure and outcomes.¹⁰

To address these problems, the CHA’s plan focused on several broad areas: property management, human capital development, protective services, admissions, and occupancy policies, Housing Choice vouchers (formerly Section 8), hiring minority- and woman-owned businesses, and an extensive capital program, which was approximately two-thirds the total annual budget. Property management strategies aimed to get the CHA “out of the busi-ness of managing real estate, resulting in lower costs and better service.”¹¹ To achieve this goal, property management would be transferred to professional management organizations, which, along with existing resident management corporations, would be given authority, resources, and responsibility “to get the job done.”¹² Human capital development meant that residents in CHA property “will be treated as full citizens of the city of Chicago,” getting access to city services via development-based outreach workers.¹³ Residents would also benefit from a change in protective services, including the transfer of policing functions to the Chicago Police Department and added security coverage at developments for the elderly. Changes in admissions and occupancy policy were significant, with higher lease compliance standards and rent incentives for working families “intended to encourage the development of stable communities and to reward work and responsibility.”¹⁴ Housing Choice voucher improvements focused on expanding landlord outreach and mobility counseling, and building on what the CHA labeled “vast improvements in the administration” by the private organization administering the program. Specific funding would be provided to help landlords modify units for nonelderly people with disabilities, using vouchers to move such people out of buildings designated “senior only.”¹⁵ Finally, the CHA committed itself to “assuring that this period becomes a real time of opportunity for minority businesses and for other disadvantaged firms and workers.”¹⁶ This was in response to Representative Rush’s request that the CHA increase the proportion of minority contracts guaranteed.¹⁷ HUD required the CHA to set as a goal (though it did not have to guarantee this goal would be met) awarding 50 percent of redevelopment contracts to minority- and woman-owned businesses—“the highest percentage ever set by HUD.”¹⁸ When combined, these changes were to put a new face on the CHA and to show the public what the agency was going to accomplish once more under the au-thority of the city of Chicago.

A New Image for the CHA

When policy makers signed into law the Quality Housing and Work Responsibility Act in 1998, one goal was to improve the all too often negative image of public housing around the country. This included “transforming” many of the large public housing agencies that, like the CHA, had been in trouble with HUD. Having been run by HUD for nearly four years, the CHA plan was a means to introduce the organization’s own transformation, to show the public what the new management could and would do and how it was going to be different from the past.¹⁹ As described in the executive summary, a goal of the CHA’s Plan for Transformation was to create a new identity for itself:

This plan contemplates much more than the physical transformation of public housing. It envisions a new role for the CHA. In the past, the CHA was primarily an owner and manager of public housing. In the future, the CHA will be a facilitator of housing opportunities. It will oversee a range of housing investments and subsidy vehicles. Where appropriate, it will own housing, but it will just as likely provide financial assistance to other private and non-profit development organizations to expand housing opportunities.²⁰

The CHA had been the housing of last resort for thousands of poor people for several decades, especially families, seniors, and people with disabilities on fixed income or working at low-wage jobs. Despite its condition, many people called public housing home, having built up a community and network of support and extended family.²¹ And many more were trying to get in: CHA had a waiting list of more than 40,000 households. At the same time, the poor quality coupled with a rent system based on paying 30 percent of income meant that the CHA—like many housing authorities—could not attract higher income families to its developments.²² There were better quality affordable units in the private sector for middle- and upper-income renters, at least until the housing market started heating up in the mid-1990s. As with other PHAs dealing with distressed developments, the CHA’s plan was to make its new mixed-income public housing attractive to middle- and high-income families who would pay market prices to rent or buy a unit.

Although CHA’s transformation into a “facilitator of housing opportu-nities” was announced in the plan, its metamorphosis really began in 1995 when HUD took over the CHA after the entire board of directors and the chair, Vincent Lane, resigned. This came after the CHA had failed to deal with severe problems including mismanagement of an estimated $26 million in federal funding.²³ In addition, high vacancy rates in many of its developments coupled with a poor rent collection record had kept the authority on HUD’s “troubled list” since 1979.²⁴ Lane, the man whom former HUD secretary Jack Kemp called “one of the most progressive public housing leaders in the country,” had been unable to clean up the CHA. His bold gestures like police sweeps and development lockdowns did not significantly reduce high crime or violence in developments or remedy the many management problems he inherited in 1988. By 1995, Lane’s “high hopes” for redeveloping public housing and his earlier political support had been diminished.²⁵

Stepping in to run the CHA temporarily was HUD assistant secretary Joseph Shuldiner. Before being made assistant secretary, Shuldiner had been executive director for the Los Angeles Housing Authority (1990–1993) and general manager of the New York City Housing Authority before that, so he was prepared for working in a large PHA. However, the expectations were high. At the takeover, his boss, Secretary Henry Cisneros, said, “The national system of public housing is on trial in Chicago.”²⁶ Shuldiner was later quoted as saying, “Chicago is a symbol of what’s wrong with public housing in the United States...