Unbelievable as it may sound, the Chicago Housing Authority is sitting on a pile of cash. Between 2008 and 2012, the agency stockpiled hundreds of millions in reserves, most of which can be used to build or rehab public housing. Meanwhile, 3,000 CHA apartments have been vacant for years — most awaiting redevelopment — as many as 1,100 displaced families await a return to public housing and 40,000 families sit on CHA’s wait list.
This status quo, unearthed by an intrepid band of housing advocates, is laughable.
In 2000, the CHA promised to produce 25,000 apartments as part of its tear down and rebuild plan. The deadline was 2010, now extended to 2015.
The Chicago Housing Initiative, a coalition of community groups, poured through CHA’s financial documents to unearth this cache of cash.
According to CHA, the agency’s operating reserve — money it can spend — was $315 million at the end of 2012, a very high amount. This figure, defined by the feds, reflects the most recent data. The CHI has been quoting $665 million from CHA’s 2012 audit, but that amount includes future receivables, CHA says. The lower $315 million number partly reflects CHA responding to pressure from the U.S. Department of Housing and Urban Development to spend down reserves, insiders tell us. CHA in 2012 paid down some bonds and made a catch-up pension payment.
CHA’s reserve grew each year as the agency didn’t fully spend federal dollars given to the agency, with CHA amassing $543 million over five years, the CHI found. CHA failed to spend its cash for many reasons, some excusable. What’s not excusable are the management problems at the CHA — a failure of leadership, lack of experience among staff and CHA turnover — that have caused unacceptable delays.
CHA defends its reserve fund, saying its building plans were undermined by the collapse of the housing market. CHA held onto the cash to spend at a later date, though the reserve amount, CHA officials note, far exceeds what’s needed to finish rebuilding.
CHA officials also tell us they have big plans for 2014 — they expect to produce 586 units. Reserves will be whittled down to just $7 million, they say.
Excuse us for being skeptical.
We’ve heard this before and seen the result: Big plans, far less to show. In 2013 CHA promised 525 units but delivered only 298. And that was a good year.
Overall, CHA has finished 87 percent of the 25,000 units, including about 9,500senior apartments done long ago. The agency is about 3,300 apartments short, almost all for families. That’s roughly 12,000 people, assuming families of four, out of luck at a time of tremendous need.
CHA’s stockpiling period coincides with the collapse of the housing market. And even in flush times, putting together private deals that mix renters of different incomes, a goal of CHA’s, can be exceedingly complicated, often exacerbated by long-standing lawsuits and historic preservation disputes. Wherever possible, CHA seeks to replace its projects with mixed communities, which place public housing families alongside market-rate renters or owners and higher-income subsidized “affordable” renters.
At two key stalled sites, the Cabrini Rowhouses and Lathrop Homes on the North Side, progress has been slowed by a protracted fight between supporters of mixed developments and those who want CHA to maximize public units on those sites.
We sympathize with the desire to house as many CHA families as possible. But we also have long memories — and those include the utter failure of the CHA as the overseer of projects that concentrated poor families, projects that morphed into high-rise ghettos. For locations that can attract non-CHA renters, like these North Side sites, CHA should stick to its mixed plans, though not slavishly. A development is still mixed if it includes only CHA and affordable apartments.
But the delays at CHA aren’t due solely to outside circumstances.
Insiders tell us that turnover at the CHA, weak leadership, a lack of development experience among staff and debilitating micromanaging by the mayor’s office over the last few years are the most insidious reason for the delay.
Charles Woodyard, who previously oversaw a smaller public housing authority in Charlotte, N.C., was CEO for two years before resigning last fall. Michael Merchant, a former city buildings commissioner who lacks public housing or development experience, started in November. It is essential that Merchant staff up with the best, most experienced people and be given the freedom to run his agency.
Housing advocates want HUD to take much tighter control of CHA. HUD should ride herd, but CHA needs the financial flexibility it has enjoyed for over a decade to complete its promised 25,000 units.
The best hope is pressure from Mayor Rahm Emanuel and the City Council on the CHA to fulfill its promises and the hiring of more quality, experienced people to get the job done.
Spend the cash, CHA.
But more important, spend it well.