CHICAGO With each unit built or rehabbed, the Chicago Housing Authority (CHA) moves a step closer to completing its massive Plan for Transformation.
Seeking to replace or restore 25,000 units, the Plan is the largest and most ambitious public housing reform eff ort in the nation. It has meant that Chicago’s old high-rise projects, including the notorious Cabrini-Green buildings, have been knocked down and are being replaced by brand-new mixed-income, mid-rise communities.
CHA, which launched the Plan in 2000, is about 82 percent toward its goal, having completed 20,480 units as of early June. This includes 9,277 seniors units, 2,555 scattered-site homes, 3,815 family housing rehabs, and 3,064 public housing units in mixed-income projects.
“We’ve accomplished a tremendous amount of work, both on the bricks-andsticks side and the human side,” says William Little, executive vice president of development at CHA. “We’re very confident that we are going to hit 25,000 units by 2015."
CHA didn’t finish the work in 10 years as originally planned. Realizing that the schedule was too aggressive in a tough economic environment, CHA offi- cials revised the timeline a few years ago, giving themselves another five years.
The agency, which has had three CEOs since the Plan started, is now inching toward the finish line. In 2010, CHA delivered 1,086 units in 2010 and continues to bring more units on-line.
“I think the progress has been phenomenal, especially when you view it in the sense this is one of the most ambitious urban renewal initiatives undertaken," says Lawrence Grisham, senior vice president, community development, at The Habitat Co. in Chicago, which until last year had been the court-appointed receiver overseeing development for the CHA for 23 years.
Grisham says the Plan is important on two fronts. It’s creating better and safer housing for thousands of public housing residents. It’s also having an overall impact on the city. “These communities had high concentrations of poverty,” he says. “It made sustainability difficult. Now, if you visit the sites, it’s an entirely diff erent physical situation. You don’t have high-rises looming over everything. You have quieter, safer, economically diverse neighborhoods."
CHA and the communities have put tremendous work into the Plan. The challenge will be to sustain that same level of eff ort through to the end, Grisham says.
The Business and Professional People for the Public Interest (BPI), a public interest law and policy center in Chicago, gives the first decade a mixed review.
In some respects, CHA has performed satisfactorily, but in others they have had a lot of catch-up to do after some early stumbles, says Alexander Polikoff , director of BPI’s public housing program.
On the plus side, most of the new mixed-income communities have been well launched, says BPI in its “The Third Side: A Mid-Course Report on Chicago’s Transformation of Public Housing."
“Although much work remains to be done, public housing units in the new communities are not clustered in one section but are scattered among and are architecturally indistinguishable from market-rate and aff ordable rowhouses, townhomes, and elevator buildings—a radical departure from the generally isolated, often shoddily constructed, easily identifiable public housing they have replaced," says BPI, which praises housing officials for their bold vision.
The effort, which is costing well more than $1 billion, has been a true community eff ort with CHA, the city, and a large number of partners, including about 10 private development firms that have been involved in building the new mixed-income neighborhoods.
On the negative side, BPI found that the development of retail and service establishments in the new communities has been spotty. The group also wants to see more cooperation between CHA and Chicago Public Schools to establish good local schools.
BPI has also been very critical of the “people” part of the Plan, saying the relocation of residents was “badly flawed at the outset” and that social services were also poorly managed at the beginning.
The 2009 report also urges CHA to convert its traditional public housing developments that are not being demolished to mixed-income communities, noting that housing officials were moving in that direction in a few cases. This recommendation came as 10 traditional developments were slated to be rehabbed but were set to remain exclusively for public housing families. For-sale housing, an integral part of the mixed-income neighborhoods that CHA is trying to create, remains one of the toughest challenges ahead.
When the housing authority set forth on its eff orts, a big question was whether it could even build for-sale housing at price points and in communities that were untested that would attract buyers.
CHA couldn’t get banks to “front fund” the money it needed during construction. In one case, CHA worked with the MacArthur Foundation, Fannie Mae, and the United Methodist Pension Fund to figure out how to come up with a frontfunding mechanism. MacArthur ended up issuing a guarantee to Fannie Mae and the United Methodist Pension Fund to help get the units going. Before the market tanked, units were selling briskly, Little says.
He notes CHA will look at other strategies. For example, some future deals may resemble 80/20 projects, where 80 percent of the units are market-rate rentals and 20 percent are public housing as a way to get market-rate stakeholders into the communities as an avenue other than condos and single-family homes.
CHA will consider pursuing more acquisitions, which could provide some good opportunities and give the agency more flexibility when it comes to developing on the footprint of its own sites.
“The mission, the theory, the spirit is still the same—mixed-income communities," Little says.
CHA OPENS THE KENMORE
The Chicago Housing Authority (CHA) recently opened the 100-unit Kenmore Senior Apartments after completing a major renovation.
Overall, CHA has completed about 99 percent of the 9,382 senior-designated housing units promised under the Plan for Transformation.
The Kenmore, which has a total development price tag of $30 million, is designed to achieve Leadership in Energy and Environmental Design (LEED) platinum certification. It will be CHA’s first LEED-certified building.
Like many of the other transactions under the Plan, The Kenmore was financed with tax-exempt bonds and low-income housing tax credits (LIHTCs).
Financing included a $16.8 million federal stimulus grant plus about $9 million in LIHTC equity from Red Stone Equity Partners and Met Life. During construction, about $16 million in tax-exempt bond proceeds were made available by Bank of America.