Three takeaways from our report on the Chicago Housing Authority
1. The CHA is using more of its voucher money for…well, vouchers
In our 2014 report, we found that every year, millions of federal dollars the CHA received for housing vouchers were just being put in the bank — enough for some 13,000 families to receive help with their rent.
Importantly, the CHA had the legal authority not to give the vouchers, thanks to a federal program called “Moving to Work.” But at a time when there’s a structural gap between the price of even low-cost apartments and wages, that caused us to ask questions about how the CHA was weighing these priorities.
In our new report, we find that this situation has improved. While the CHA issued 73.6 percent of the vouchers it was funded for in 2011, that improved to 88.9 percent in 2015, meaning over 8,000 more families were provided with affordable housing.
But this situation bears close attention: One reason the CHA increased its voucher spending was that the federal Department of Housing and Urban Development was planning on making a 90 percent voucher utilization rate a requirement for continuing participation in “Moving to Work,” or MTW. But a new law extends MTW participation for all housing authorities no matter what — which means CHA might not have the same incentive to keep those voucher rates high.
2. The CHA used voucher money to pay off its debts
This might not sound like a bad thing — after all, with everything from the Chicago Public Schools to the state of Illinois in budget crises, what’s wrong with getting your fiscal house in order?
Well, CTBA’s report doesn’t say that CHA necessarily made the wrong call in 2011 and 2012 when it used $233 million of “excess” reserves — reserves which were built up in part thanks to the housing vouchers the Authority didn’t give out — to overfund its pension plan and eliminate its bond debt.
But it’s also not clear that it was the right call, either. For one, it’s very common for public agencies — especially ones that, like the CHA, oversee a lot of construction — to take out loans, the way you might take out a mortgage to buy a house. The CHA didn’t appear to have unmanageable debt payments. And according to its own estimates, the Authority will save around $3 million annually over 13 years, or just 0.3 percent of its roughly billion-dollar annual budget.
Meanwhile, there is the opportunity cost of thousands of families who might have received assistance with that money instead. There’s also the fact that the CHA is years behind on its promise to create or rehabilitate 25,000 units of public housing as part of the Plan for Transformation — a goal that was supposed to be reached in 2009, and which the Authority now says it will reach by the end of 2017.
In 2012, when the CHA used these funds to pay off its debts, it also fell even further behind in the Plan for Transformation, adding just 173 of the 845 units it had promised that year. Could that number have been improved with those funds?
3. Affordable housing is as pressing an issue as ever in Chicago
As we wrote in a previous post on the Budget Blog, there is a structural imbalance between what low-rent housing costs in Chicago, and what low-paying jobs pay.
A job with wages in the bottom quarter of all Chicago jobs pays enough to afford $370 in rent per month. But an apartment in the bottom quarter costs nearly twice as much: $720 per month.
So while a lot of rhetoric around public housing is about the need for people to find jobs (even though most CHA residents are either already employed, elderly, or disabled) or “lift themselves up,” simple math says that until either Chicago apartments get cheaper or Chicago jobs start paying more, hundreds of thousands of people will simply not be able to afford their rent.
The Chicago Housing Authority plays a crucial role in squaring this circle, and keeping families in safe, stable shelter. How it decides to use its resources to do so is of interest to everyone. Our report finds progress, but also calls for a more transparent, accountable budgeting process, so that Chicagoans can weigh in on questions like the balance between fiscal savings and the opportunity cost of failing to serve families in need.