The city’s draft of it’s new five-year housing plan, “Bouncing Back,” is out. It’s notable for its breadth, and one thing that got removed: the word “affordable,” as the Chicago Housing Initiative initially noted to WBEZ.
It’s not that the word “affordable” doesn’t show up in the plan. It does, quite a bit. But it’s not the sole focus; the first item in its bullet-pointed list of goals is to “attract high-income, high-skill residents who move to Chicago for jobs in growth sectors such as technology, engineering, finance, and health care.” And it begins its discussion of strategy with an emphasis on private-market lending and a goal to “fully leverage the community of non-subsidzed owners.”
There’s a logic here; as the plan notes, the majority of affordable housing in the city is provided by private owners. Even if the CHA was firing on all cylinders—more on that in a second—it still has tens of thousands of people on its waiting list and just 2,500-some units to go to complete its Plan for Transformation goals, which it’s not on pace to do.
The CHA dominates discussion of housing policy in the city and has for decades, but it’s only a small part of the draft plan, which has a citywide focus, targeting the city’s strongest markets as well as its weakest with different approaches.
“One of the things that’s of interest to us is taking a sectoral approach to housing policy and investment, because the city’s always been very segregated,” says Geoff Smith of DePaul’s Institute for Housing Studies. “The city’s always been segmented like that. Looking at the data coming from this housing-market recovery, the housing market collapse and economic recession has really sharpened those divisions. And I think that the challenges become that much more clear in terms of how to approach redeveloping a really, really distressed neighborhood versus a transitional neighborhood—investing in a strategic way to stabilize it more quickly—and how to intervene in a very specific way in stronger markets to insure affordability in those areas.”
A possible route is to convene a committee to “consider updates to the Affordable Requirements Ordinance that respond to opportunities in the current development market and create additional affordable units and/or increased fees paid into the Affordable Housing Opportunity Fund.” Right now developers have to either set aside afforable units or pay $100,000 to get out of the requirement. That’s well under typical development costs, which has led to an inevitable result.
“The affordable housing that’s been delivered onsite as opposed to the in-lieu-of fee the developers pay to get out of the onsite requirement has been… seven since 2008, when the ordinance passed,” says Leah Levinger of the Chicago Housing Initiative. “It’s extremely demoralizing. It speaks to the level of stigma that is inappropriately attached to the idea of affordable housing—who needs affordable housing. The vast majority of working-class families can’t access a number of Chicago communities on the north side. A lot of families need affordable housing.”
Right now the fees generate a few million dollars a year to the ARO fund; raising them would increase the fund, add additonal affordable housing into new units that tend to be in stronger markets, or both.
“The differences in those interventions is very clear when you look at the sectors that are emerging in the city, coming out of the housing crisis,” Smith says. “I think that is one thing that was highlighted in the plan that makes a lot of sense. We’re hopeful that that type of strategic approach, with the use of data, innovative policies grounded in good analysis will help the city be more strategic about how it invests limited resources.”
The elephant in the room, or at least in the Appendix, is the Chicago Housing Authority. As the Chicago Reporter’s Angela Caputo documented in 2012, the CHA receives money for every unit for the federal government whether it’s occupied or not, even as occupancy rates declined over the years, to a low of 45 percent in 2009.
The result of all that cash is rare in this city: A massive operating surplus of $315 million (according to the CHA) or $665 million (according to the Chicago Housing Initiative). The agency says it has plans to spend that down, reducing its massive waiting list. In the appendix of the housing plan, there’s a statement that the CHA will fulfill its 25,000 unit committment by 2015—though at its recent pace, with thousands of units still incomplete after a decade of work, Levinger estimates that goal wouldn’t be met until 2020.
In the brief rundown on “Plan Forward,” one of the agency’s goals is to accelerate redevelopment, but Levinger doesn’t think that’s possible without an emphasis on rehabilitation over reconstruction.
“One of the points we’ve been trying to make with CHA leadership, and now with City Council, is the only way we see the CHA reaching its goal is if it moves away from a demolition/new construction model, which is extremely costly and extremely slow, and moves towards a rehabilitation model,” Levinger says. “If you look at the CHA’s unit-delivery over the course of the plan for transformation, 74 percent of the units they’ve brought back online have been through rehab, and only 12 percent have been through new construction. New construction also costs at least $100,000 more per unit. It’s not cost-effective, it’s too slow, it’s too subject to the types of development delays we’ve seen in the housing-market crash. It’s just not been a scalable strategy.”
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