Chicago Sun-Times Editorial: Housing for the poor going unbuilt by the CHA

Department Buildings Commissioner Michael Merchant during press confrence about efforts city is taking stop vacant property problems. Friday May 4

 CHA spending, reserves


The Chicago Housing Authority is sitting on hundreds of millions of dollars even as the city’s affordable housing needs grow more dire, a study released last week confirmed.

Confirmed, we say, because a band of housing activists have been sounding that alarm for a year, and this page highlighted this outrage back in January.

It’s well past time for the CHA to spend that cash to finish building the new mixed income housing communities it promised 15 years ago.

In 1999, the agency launched a massive plan to tear down its high-rise ghettos and replace them with new or rehabbed public housing, many in communities that mix public housing, affordable apartments and unsubsidized or market rate units.

The high-rises are long gone, but the CHA lags way behind schedule in replacing its apartments for families. At the end 2013, the CHA was about 3,300 units short of its goal of replacing 25,000 apartments that have been demolished. Almost all of those are for families, or roughly 12,000 people, who have been waiting a decade or more for a single new unit. Another 210,000 families applied for the 40,000 slots on the CHA’s current waitlist.

For nearly 10 years, the CHA has taken in more federal money than it has spent, piling up a reserve of $432 million in 2012, according to the Center for Tax and Budget Accountability, a local think tank. The CHA says it’s down to $355 million. The Chicago Housing Initiative, a group of housing activists that has been highlighting this issue for more than a year, commissioned the study.

Most of these reserves are meant to go for capital development, but the CHA has failed to spend. There are legitimate explanations, including the recession, the collapse of the housing market and the complex nature of putting together mixed finance deals and ensuring community input.

But, as we said in January, what’s not excusable are the management problems at the CHA that have caused unacceptable delays. Insiders told us that turnover at the CHA, weak leadership and a lack of private development experience among staff at the top levels are the biggest reasons for the delay over the last few years.

Those insiders tell us they haven’t seen any improvements, but CHA and city officials on Friday insisted that the agency’s new CEO since November, Michael Merchant (who lacks development experience), recognizes the need to spend the reserves and is making big changes. A plan to draw down the reserves, accelerate new unit development and distribute more subsidized housing vouchers is expected by the end of September, they said.

We hope Merchant delivers, though we’ve heard big promises from CHA before. The mayor appoints both the CEO and the CHA board, so this ultimately is on him.

The Chicago Housing Initiative is pushing an ordinance to give the City Council new oversight of the CHA, including quarterly reports to aldermen. This would be a good start toward greater accountability for an agency getting little monitoring. The CHA’s various budget documents also use conflicting accounting standards that make tracking spending and revenue difficult. That needs to be fixed as well.

But we stop short of endorsing proposed performance standards being pushed by the Chicago Housing Initiative because we think they could overly restrict the CHA’s ability to develop or buy new housing.

The greatest pressure on the CHA to deliver likely will come from an increasingly impatient U.S. Department of Housing and Urban Development, the CHA’s main funder. For each of the last 15 years, HUD supplied the CHA extra housing vouchers but allowed the CHA to spend that money on development instead of on helping families rent private apartments. That’s how the CHA built up its reserves.

But by 2018, HUD wants 90 percent of that money to be spent on vouchers only, the CHA tells us. That gives the CHA just a few years to start distributing more vouchers to meet the city’s great housing needs and to complete its promised 25,000 apartments — all on a tight budget and without compromising the worthy goal of replacing high-rise ghettos with mixed developments.

There isn’t a moment to waste — a key message for an agency that already has wasted far too many of them.