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Chicago Opens the Door to Privatizing Half its Public Housing — Thanks To Mayor Rahm Emanuel

December 1998 demolition of S. Lake Park Avenue & 39th Street Photo adapted by Ronald David Jackson (from a Photo by Christopher Morris)
December 1998 demolition of S. Lake Park Avenue & 39th Street Photo adapted by Ronald David Jackson
(from a Photo by Christopher Morris)

By Rebecca Burns
Chicago, long a pioneer of privatization, is poised to embark on a sweeping experiment with the city’s public-housing stock. The Chicago Housing Authority (CHA) plans to court private investment in as much as half of its public-housing units through the Rental Assistance Demonstration (RAD), a new federal program billed as a way to “revitalize” housing for the poor and address a $26 billion backlog in needed repairs.

But housing advocates around the country worry that RAD is just a prelude to privatization. RAD, approved by Congress in 2011, gives local housing authorities broad latitude to raise funds, including the ability to mortgage or sell public-housing buildings. Critics believes that if public housing is opened up to the vagaries of the mortgage market and the whims of private developers, large swaths of low-income housing could wind up in foreclosure, or become luxury condos once RAD’s affordability requirements expire.

Steven Knight, supervising attorney at the National Housing Law Project, says that the program’s “stated goals are very laudable” but “the devil is in the details–local housing authorities have to get these transactions right, and if they don’t, the consequences may be severe and long-lasting.”

So, will Chicago get it right? RAD arrives in the city as the CHA is already under fire for failing to spend millions of dollars earmarked for affordable housing while amassing at least $440 million in cash reserves, even as more than 280,000 people sit on its housing waitlist. These financial shenanigans were enabled in large part by the CHA’s deregulation in 2000 under now-Mayor Rahm Emanuel’s, who pushed to remove federal oversight of the housing authority’s budget as vice chairman of its board.

[...]

Chicago public housing residents’ fears of displacement have proved prescient in the past. Just 11 percent of former public-housing residents whose high-rises were demolished beginning in 1999 had returned to mixed-income developments constructed through the Plan for Transformation as of 2011. For example, Chicago’s Robert Taylor Homes were once the nation’s largest public-housing project, with 27,000 residents. A $500 million redevelopment effort knocked down the complex’s 28 high-rises and replaced them with a mixed-income community of just 2,300 units.

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