Relocating from the Distress of Chicago Public Housing to the Difficulties of the Private Market: How the Move Threatens to Push Families Away From Opportunity

 

Molly Thompsona1

 

The rapid public housing transformation in Chicago subjects many vulnerable families to the demands of the private housing market.  Too often former public housing residents are not prepared to face the private market and the private market is not ready and willing to accept them.  Under the Chicago Housing Authority’s (CHA) Plan for Transformation, thousands of former public housing residents are using Housing Choice Vouchers [1] to transition to private housing. [2]  The barriers of the housing market, in conjunction with inadequate support and relocation assistance from the CHA, confine many of these voucher users to high-poverty segregated neighborhoods. [3]   Living in a distressed neighborhood without enough supportive services makes the CHA’s promises of enhanced choice and greater opportunity outside of public housing illusory.  By demolishing distressed public housing, the CHA is encouraging opportunity through redevelopment of public housing sites, relocation of residents, and a goal of poverty deconcentration.  Yet, by facilitating moves into high-poverty neighborhoods and not preparing residents with adequate support, the Plan for Transformation may not be moving many public housing residents any closer to greater opportunity.

Part One of this Comment will describe Chicago’s public housing history, including voucher programs that preceded the Plan for Transformation.  Part Two will give background on the overarching federal HOPE VI program, which guides the Plan for Transformation in Chicago.  Part Three will focus on the Plan for Transformation and its progress.

In Part Four, the discussion will narrow to voucher users under the Plan for Transformation.  This part will detail the barriers and problems that former public housing residents face while seeking housing in the private market. 

Part Five will compare vouchers under the Plan for Transformation with a mobility program that had many favorable outcomes, the Gautreaux Program, and attempt to explain why outcomes under the Plan for Transformation have not been as favorable as many of the Gautreaux outcomes.  Part Six will examine how the CHA fails to properly address the obstacles of the private market with services that would better prepare its residents for their relocation.  Part Seven will suggest reforms that could address the current distressed situations of many voucher users in Chicago and ensure that better opportunity remains a realistic promise for residents moving out of public housing.

 

I. Public Housing in Chicago

            From 1955 to 1965, the CHA built approximately 10,000 public housing units. [4]   Most of these units were concentrated in housing developments made up of mid-rise and high-rise towers clustered along corridors running south and west from Chicago’s Loop. [5]  These towers included the Robert Taylor Homes on the South Side with 4415 units and the Henry Horner Homes with 1656 units on the Near West Side. [6]  This proliferation of public housing coincided with the movement of hundreds of thousands of white residents to the suburbs and outlying city neighborhoods.[7]  Chicago city aldermen fought racial transition in their predominantly white neighborhoods by exercising veto power over proposals to build public housing in their wards. [8]  Consequently, the CHA built the towers in the south, west, and near north sides of the city where minority populations were already rapidly increasing. [9]

           

A. The Gautreaux Program

            The deliberate racial clustering of public housing in Chicago gave rise to lawsuits against the CHA and the Department of Housing and Urban Development (HUD). [10]  In 1976, the Supreme Court held that HUD could be required to remedy the segregation in Chicago public housing on a metropolitan-wide scope. [11]  This decision came two years after the enactment of the federal Section 8 Assisted Housing Program, which provided rental subsidies for use in the private market. [12]  In 1981, the metropolitan-wide approach, which utilized Section 8 vouchers and was known as the Gautreaux Assisted Housing Program (Gautreaux Program), was institutionalized through a consent decree. [13]   The consent decree required that at least 75% of the families relocate to the suburbs of Chicago through the use of rent subsidies. [14]  The Leadership Council, a nonprofit fair housing agency, performed the administrative functions of the Gautreaux Program. [15]  It assisted and counseled the participants who were moving and located landlords who would be willing to rent to them. [16]

            The Gautreaux Program ended in 1998 after relocating approximately 7100 families. [17]  Researchers found that the Gautreaux Program fostered many success stories among the families who relocated to the suburbs. [18]   Compared with public housing residents who relocated to other predominantly African-American neighborhoods in the city, the suburban movers showed significant improvement in safety, employment outcomes for heads of the households, and educational outcomes for children. [19] 

 

B. The Moving to Opportunity Program

            The Gautreaux program laid the foundation for the Moving to Opportunity Program.  Congress authorized the Moving to Opportunity for Fair Housing Demonstration (MTO) in 1993. [20]  The experiment was designed to find out whether moving to low-poverty suburban neighborhoods noticeably improved the lives of low-income public housing residents. [21]  The program was implemented in Baltimore, Boston, Chicago, Los Angeles, and New York. [22]  Eligible volunteer public and assisted housing families were randomly assigned to one of three groups:

1.              The MTO treatment group, which received Section 8 vouchers usable only in areas where 10% or less of residents lived below the poverty level.  These families also received counseling in finding private rental units.

2.              A Section 8 comparison group, which received regular Section 8 vouchers with no geographic restrictions or counseling.

3.              A control group, which continued to receive its current project-based assistance [23]. [24]

 

An evaluation of MTO data in Chicago revealed that overall, MTO families reported higher levels of housing quality than did the other Section 8 families. [25]   In addition, as compared to other Section 8 families, the Chicago MTO families moved to neighborhoods that had “higher overall economic status, more racially and ethnically diverse populations, and more opportunities for socioeconomic advancement.” [26]  Researchers have suggested that these differences may be attributed to 1) the program’s requirement that the MTO families relocate to low poverty neighborhoods, and 2) the housing counseling and search assistance received by MTO families. [27]  From the above findings, these researchers have concluded that supportive services are an integral part of housing mobility programs. [28]

 

II. HOPE VI

Congress created the HOPE VI program to counter the growing number of severely distressed public housing projects. [29]  The program was a response to recommendations by the National Commission on Severely Distressed Public Housing, which found that 100,000 units of public housing nationwide were deteriorating and could not be revitalized through other programs. [30]  The deplorable living conditions fostered dangerous and destructive communities. [31]  The developments were not only in distressed physical condition, but they also housed distressed populations – extremely impoverished residents who had high rates of unemployment and public assistance receipt. [32]

In addition to funding physical revitalization, HOPE VI supports the establishment of “positive incentives for resident self-sufficiency” and “comprehensive services that empower residents.” [33]  The report on the 1992 Senate bill that initiated HOPE VI lists three main goals for the program: 1) Shelter – to eliminate dilapidated, and often dangerous, structures “that serve as homes for hundreds of thousands of Americans”; 2) Self-sufficiency – “to provide residents in these areas with the opportunity to learn and acquire the skills needed to achieve self-sufficiency”; and 3) Community sweat equity – “to instill in these Americans the belief that with economic self-sufficiency comes an obligation to self-responsibility and giving back to one’s community.” [34]

With these goals in mind, Congress intended to improve public housing residents’ lives through the deconcentration of poverty. [35]  HOPE VI utilizes “two complementary strategies” to deconcentrate poverty: (1) helping residents relocate to better neighborhoods with vouchers and (2) creating “healthier, mixed-income communities in place of the distressed public housing developments.” [36]  HOPE VI implements these strategies by “enlisting a wide range of stakeholders . . . in partnerships that marry public goals, private-sector energy and funding, and the dormant hopes of community residents.” [37]

HUD proposes that the effectiveness of HOPE VI may be judged more by its ability to help low-income households “improve the quality of their lives and move toward self-sufficiency,” than by the physical housing changes that it creates. [38]

Research on HOPE VI sites across the country suggests that residents who relocated with vouchers may have ended up in at least somewhat better neighborhoods. [39]  Researchers found that, nationally, the average poverty rate for the census tracts of former public housing residents who received HOPE VI vouchers dropped from 61% before relocation to 27% after. [40]  Approximately 40% of HOPE VI voucher users were living in high-poverty tracts (greater than 30% poor); 13% had moved to truly low-poverty tracts (less than 10% poor). [41]

 

III. HOPE VI in Chicago: The Plan for Transformation

In 2000, HUD approved the CHA’s Plan for Transformation. [42]  The HOPE VI-sponsored plan calls for 25,000 housing units to be re-built or rehabilitated by 2009. [43]  The 25,000 units represent the number of leaseholders in Chicago public housing at the time the plan was implemented. [44]  The plan calls for the demolition of fifty-one gallery high-rise buildings and several thousand mid-rise and low-rise units. [45]  Six thousand one hundred units are scheduled to be redeveloped as mixed-income units; 9500 units are reserved for senior citizens and will be rehabilitated; and the remaining 9400 units will either be rebuilt as mixed-income developments or rehabilitated. [46]  In addition to residents who use vouchers to move into the private market permanently, many displaced residents use vouchers to obtain private market housing while they await completion of the revitalization projects. [47] 

The year of 2005 was the first in which families had the opportunity to return to the mixed-income developments that replaced their original housing. [48]  These mixed-income developments generally consist of one-third public housing, one-third affordable housing, and one-third market rate homes. [49]  Roughly 75% of displaced CHA families have expressed a desire to return to their original neighborhoods. [50]  The  Relocation Rights Contract that was negotiated between the CHA and resident leadership offers the “right to return” for lease-compliant families only; it does not guarantee that all families will be able to return. [51]  Researchers predict that fewer than 20% of Chicago families will be able to return because of the relatively low number of available units and the restrictive eligibility criteria. [52]   This prediction is consistent with an early HOPE VI Tracking Study of eight HOPE VI sites across the country.  The study found that 19% of households relocated under HOPE VI were living in revitalized mixed-income developments, 29% were living in other public housing properties, 33% were using housing vouchers in the private market, and 18% had left assisted housing altogether. [53] 

Researchers at the Urban Institute claim that return rates do not give a complete picture of how original residents have fared. [54]  Delays between displacement and the completion of the original site may lead residents to choose to stay in their new neighborhood in the private market rather than move again. [55]  Residents may also decide that they prefer their private market housing and better neighborhood. [56] 

The Relocation Rights Contract [57] allows the CHA and private developers of the mixed-income units to require families to meet screening criteria before returning to the original site. [58]  As part of the screening process, the property managers may review credit histories, rental histories, and criminal backgrounds. [59]  Applicants must work at least thirty hours a week and demonstrate an ability to provide adequate childcare. [60]  As of December 2004, CHA officials said about 60% of families were meeting these criteria. [61]  This figure includes residents who are exempt from the criteria, such as the disabled and the elderly. [62]

Vouchers under the Plan for Transformation

In regards to neighborhood poverty, the CHA families that were able to move with vouchers ended up in improved living environments. [63]  A survey found that the average reduction in neighborhood poverty for residents who moved with vouchers was forty-two percentage points. [64]  Nevertheless, this improvement is unsurprising given that nine of the poorest census tracts in the country were in CHA housing. [65]  More than 55% of the movers are living in neighborhoods with poverty rates greater than 40% (high-poverty areas). [66]  Often, the only choice that Housing Choice Voucher families have is among high-poverty neighborhoods.  The sections that follow will detail the obstacles that voucher users face in the private market and explain how these obstacles are restricting voucher users to high-poverty areas [67] that are low in stability and opportunity.

 

IV. Plan for Transformation Voucher Users and the Problems They Face in the Private Market

Since the mid-1970s, tenant-based assistance through vouchers has become increasingly more prevalent than assistance based on the provision of public housing units. [68]  Tenant-based assistance has the potential to disperse tenants from concentrated poverty neighborhoods to neighborhoods with working and middle-class role models and greater opportunity. [69]  Most of the families being relocated from public housing in HOPE VI sites across the country are headed by extremely poor single women who lack formal education and marketable skills. [70]  Many of the households have several children. [71]  Additionally, a relatively high number of these public housing residents nationally have problems such as mental illness, substance abuse, and domestic abuse. [72]  Under the Plan for Transformation, these residents, representing some of the neediest households in public housing, must meet the demands of the private market.

With strict screening for admission to new public housing units in mixed-income public developments, a delay in rebuilding of original sites, and the hope of finding opportunity in better neighborhoods, it is clear why many residents turn to using vouchers in the private rental market.  Yet, in many ways the CHA fails to address the specific circumstances of the residents that are moving and the private market barriers that the residents are facing. 

 

A. Unwilling Landlords

            Because of unwilling landlords, voucher holders are denied access to approximately 70% of the market rate units that are supposedly available to them. [73]  A Chicago fair housing ordinance protects voucher holders from source-of-income discrimination, [74] but anonymous testing found that illegal discrimination nevertheless confines voucher holders to 30% of the available housing units that are within CHA rental payment guidelines. [75] 

Landlords who accept vouchers must pass HUD inspection standards and paperwork requirements. [76]  They may wish to avoid the voucher program because of the perceived bureaucracy and unnecessary hassle that would accompany participation. [77]

Landlords and rental agents also illegally stigmatize HOPE VI voucher holders because of their class. [78]  Private landlords are skeptical about whether voucher users will be good tenants or will be able to pay their rent because of their economic status. [79]  “They know you’re from the projects, and they think you’re bad,” said one public housing resident looking for a new apartment. [80]  Landlords exclude families relocating from public housing with teenagers, particularly black men, because they fear such teenagers are a risk to the safety of their property. [81]  Once they agree to accept a tenant with vouchers, landlords may fear that the program will make it harder for them to evict voucher-using tenants or to screen out families that they do not want to accept. [82]  

            Racial discrimination by landlords and rental agents creates another barrier to the limited supply of affordable private rental units.  With or without vouchers, African American and Hispanic renters experience significant levels of discrimination in the housing market. [83]  Discrimination is evident in many forms: the denial of available rental units, higher rents or security deposits for minorities, or segregation of African Americans, Latinos, or Asian Americans to certain parts of the building or complex. [84]  Studies have found that white realtors in the Chicago metropolitan area have used twenty-six different methods to exclude African-Americans from white neighborhoods. [85]

Fair Housing laws have not been sufficient in countering racial discrimination from landlords. [86]  This is in part because many victims do not realize they have been victimized. [87]  Also, many renters who believe they were discriminated against do not report it, because they do not think reporting would lead to any significant result. [88]  Particularly in tight housing markets when landlords have their choice of many applicants, victims are less likely to complain because they know it would be difficult to prove discrimination. [89] 

Landlords’ aversion to renting to voucher users is often intensified when demand for housing is strong. [90]  Landlords find enough people to fill their units without having to accept vouchers. [91]  This is particularly true in more desirable neighborhoods. [92]  In contrast, landlords in less desirable neighborhoods are generally more willing to accept vouchers because it will guarantee a stream of renters. [93]  Hence, voucher holders are more likely to be able to find a rental unit in an economically-disadvantaged area. [94]

The unwillingness of landlords to rent to voucher holders is rooted in the inherent conflict between owners and renters in the housing market. [95]  While owners and investors profit from increased housing prices, the renters benefit from lower prices. [96]  Along with monetary interests that frequently do not coincide, there are attitudinal and cultural elements of exclusion that can further squeeze the housing supply or restrict voucher users’ options to certain neighborhoods. [97]

           

B. Racial Discrimination in the Community

Voucher users who relocate into predominantly white neighborhoods may face discrimination not only from landlords and rental agents, but also from neighbors.  Chicagohas a history of persistent and pervasive attempts to exclude and expel African-Americans from white neighborhoods. [98]  White residents who “refuse to accept Blacks as neighbors” may use intimidation and violence to thwart minority access to housing in their neighborhood. [99]  Suburban movers under the Gautreaux Program recalled incidents where white teenagers made racial slurs and threw things at their car, or made violent threats against their children at school.