August 31, 2014

Chicago to stop Housing Poor in Rich Neighborhoods

August 31, 2014. Chicago. (ONN) The city of Chicago quietly announced it would stop paying for poor people on housing assistance to live in wealthy neighborhoods and luxury high rises. Until now, taxpayers were paying thousands of dollars per month just to house a poor person in some of the most expensive apartments in the city. Some are still outraged, pointing out that the amounts being doled out for public housing are still unbelievably high, and if lowered, could help so many more people in need.

Chicago’s poor have moved from subsidized housing in buildings like the one on the left, to buildings like the ones on the right. Image courtesy Joe Mariano.

The Chicago Housing Authority announced it was cutting its maximum housing subsidy amount in half, mathematically driving the poor out of the highest class neighborhoods. Was it the snooty rich people who suddenly found themselves living next to or below a homeless person? One can only imagine how well that went over, block after block, street after street, in obscenely wealthy neighborhoods like Lincoln Park and the Gold Coast. It certainly wasn’t the poor who complained, or the Wall Street banks and property managers who were receiving a nice subsidy with American taxpayers paying for their unrented high-priced apartments.

$2,500 down to $1,250 monthly

A report by Crain’s Chicago Business chalks the housing subsidy reduction up to complaints by taxpayers that the city was wasting money. The city could have been housing twice as many families for the price it was paying to subsidize the rent under the special HUD-approved program. And there are currently 15,000 people on the city’s waiting list for a place to live. As it is, the amount the program will pay is only dropping from roughly $2,500 per month to approximately $1,250 per month. Critics accuse the Chicago Housing Authority of throwing the money away because it’s not their money. The program is funded with federal tax dollars.

Crain’s can rightfully take credit for blowing the whistle on the scandal having exposed the high rents taxpayers were paying last month for what it termed, ‘Supervouchers’. HUD’s Inspector General immediately launched an investigation of Chicago’s housing assistance program and US Rep. Aaron Schock (R-IL) championed a Bill in the House that would force cities like Chicago to cut the amount of money they pay in rent for each housing subsidy recipient.

Political rewards

President Obama’s critics in Washington are the most outspoken regarding cities wasting widely needed federal funding for the homeless. And it’s Obama’s HUD administrators that are actually responsible for this particular scandal. In 2010, the new Democratic administration gave the very Democratic city of Chicago an exemption from the limits on housing subsidies poor people can get through the HUD program. For the rest of the country, HUD pays 110% of what it determines is fair market rental rates. But in hand-picked cities like Chicago, that amount was raised to 300% for rentals in targeted affluent neighborhoods.

Announcing the cut in the housing subsidy cap, CHA CEO Michael Merchant said, “After concluding a review and analysis of exception payment standards, we believe adjusting the policy strikes a critical balance between providing housing options for voucher participants and fiscal responsibility.” The agency also confirmed that the hundreds of affected housing subsidy recipients in wealthy neighborhoods would have one year to find a new place to live.

The Chicago Housing Authority also revealed that the ‘supervouchers’ of up to $2,500 per month for rent were rapidly growing. They didn’t say whether or not it was at the expense of hundreds of families who would have otherwise received housing assistance. But CHA numbers show that in the first six months of 2013, 49 supervouchers were given out. In the first six months of 2014, that number had almost doubled to 87.

For more information, read the full report from Crain’s Chicago Business.



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