Posted on 07/28/2014 7:04:53 AM PDT by afraidfortherepublic
The high-rise at 500 N. Lake Shore Drive is the second-most expensive in the city, with rents for a one-bedroom apartment approaching $3,000 a month, well beyond the reach of most Chicago residents.
But that's not too much for the Chicago Housing Authority, which has used federal tax dollars to pick up most of the tab for four lucky residents in the year-old building, with its sweeping views of Lake Michigan, a concierge and a dog-grooming center.
The tenants moved in over the past two years as part of a push by the CHA to expand its housing voucher program so that more low-income residents can leave the city's roughest neighborhoods and start a new life in places with low poverty and crime and close to good schools and jobs.
Yet some landlords say it's a mistake to use scarce tax dollars to pay ultra-high rents for a fortunate few when more than 15,000 people sit on the CHA's voucher waiting list.
“This is nuts,” says landlord Tony Rossi, president of Chicago-based RMK Management Corp., who describes himself as a liberal Democrat. “In a situation where you're dealing with a low-income person, do they really need a 25th-floor apartment with a lake view? It just doesn't make sense to me.”
It doesn't make any sense to U.S. Rep. Aaron Schock, either. The Peoria Republican last month pushed a measure through the House to curb the payments and says he is seeking an investigation by the inspector general of the U.S. Department of Housing and Urban Development, which pays for the voucher program and sets many of its rules.
“This is about making sure that people are not abusing the system,” he says.
The CHA says in a statement that the “exception payments” for high-cost apartments cover less than 2 percent of the authority's roughly 38,000 outstanding vouchers. The higher payments—known as supervouchers—are necessary to help low-income residents move into better neighborhoods, which have few affordable housing options, the authority says.
Most landlords agree with the effort to expand the use of “housing choice vouchers,” formerly known as Section 8 vouchers, to more prosperous parts of the city. Vouchers have become a bigger part of the CHA's policy since it tore down big public housing projects like Cabrini-Green, offering recipients more flexibility to choose where to live so they can escape the cycle of poverty.
Under the voucher program, which is federally funded but run by local agencies like the CHA, an eligible resident can rent an apartment in a privately owned building. Voucher holders generally must pay up to 30 percent of their monthly income, if they have any, to cover rent and utilities, with the CHA picking up the rest. HUD caps how much the CHA can pay a landlord. A few years ago, the CHA could not pay more than 110 percent of a fair market rent calculated by HUD. The current fair market rent in Cook County for a one-bedroom apartment is $826 a month.
But HUD allowed the CHA to change its rules in 2010, pushing the cap up to 300 percent in designated “opportunity areas,” such as downtown and Lakeview, where poverty is low and subsidized housing is scarce.
Raising the threshold was essential because rents are so much higher in opportunity areas, making them off-limits under the old restrictions, says Alexander Polikoff, co-director of public housing at Business and Professional People for the Public Interest, an advocacy group.
“It was from a good motivation and a sound policy reason,” he says. “The CHA is to be commended for being one of the only housing authorities in the country that understands the idea of housing mobility.”
The CHA has approved 706 supervouchers since HUD signed off on the higher limits, and the number has jumped in the past two years. The CHA approved 364 in the first half of the year, up from 291 for all of 2013, 44 in 2012 and seven in 2011, according to the authority. Eighty-seven payments exceeded 200 percent of HUD's fair market rent in the first six months of the year, versus 49 for 2013 overall.
Eleven leases hit the 300 percent cap in the first six months of 2014, up from three for last year, according to the CHA. High-end apartment buildings with the highest voucher payments included 500 N. Lake Shore Drive, Aqua Tower in Lakeshore East and the Streeter in Streeterville.
WAITING LIST
In the South Loop, the CHA is subsidizing three tenants at Amli 900, a 440-unit building at 900 S. Clark St.
“Amli supports the efforts in a number of communities across the country in which we operate to provide affordable housing to qualified people,” Greg Mutz, CEO of Chicago-based Amli Residential, which owns the building, says in a statement. “Amli does not support the push to provide luxury rental housing to a lucky few when so many are on the waiting list for basic housing.”
According to the CHA, 15,230 people were on its waiting list for housing vouchers at the end of 2013.
Even Mr. Polikoff, who supports the CHA's broader push, says subsidizing low-income residents in ultra-high-rent buildings is “an inappropriate use of taxpayer money.”
In its statement, the CHA says exception payments provide “CHA families the ability to choose where they want to live and enjoy the great diversity that Chicago communities have to offer.” A HUD spokesman declines to comment.
Some building owners are happy for the business. Justin Elliott, principal at Chicago-based Marc Realty Residential, has few complaints after the CHA approved supervouchers for 36 leases this year and last in a 96-unit building Marc owned at 2300 S. Michigan Ave. Marc recently sold the building, which had the most supervouchers by far among all properties, according to the CHA.
“All in all, we viewed this as a very positive experience,” Mr. Elliott says.
Still, the image of a person on public assistance living in a luxury apartment building could generate a political problem for HUD and the CHA.
In Washington, Mr. Schock's proposal would prohibit exception payments above 120 percent of an area's fair market value calculation. The measure is not expected to go far in the Senate.
Closer to home, Mr. Polikoff says CHA officials told him that the authority plans to lower the cap to 150 percent. The CHA won't confirm that, but its statement did not rule out a change:
“As it does every initiative, CHA has and will continue to evaluate program impact and make adjustments as necessary to ensure it meets objectives—with the ultimate goal of expanding housing options for families in a variety of Chicago neighborhoods.”
Does a bear.......
My Conservative heart bleeds for the Liberal Bleeding Heart.
If you are living in a $3,000 a month apartment and you are not paying any rent, then someone else is working to pay your rent.
Memphis tried this some years ago... seems the 'low income residents - (rather than escaping crime) - took the crime wave with them... The program was a disaster - spreading crime across the city rather than just concentrated in the black community. Police were unable to cope - as the drive time between incidents cut their effectiveness.
On the other hand if the Chicago Housing Authority can move these 'low income residents' into buildings where a large number of liberal elites live in a constant state of delusion, it might be a blessing. Liberal elites will discover reality...
HaHa!!!
maybe some TB carriers can move in also
Bingo. In the old days, investigative reporters would check this sort of thing out. Today, they all play their role as obedient Regime sock puppets.
This sentence caught my eye. I guess MarcRealty wanted to take the upfront cash but not deal with the aftermath of "super-diversifying" its building.
Most landlords agree with the effort to expand
the use of “housing choice vouchers,”
formerly known as Section 8 vouchers, to
more prosperous parts of the city.
Donchaknow?
All owners of upscale real estate want people to rent from them who have no stake in upkeep of the property.
Unless they’re racists, of course.
Exactly.
wait till they start buzzing in all the dealers, junkies, bangers, pimps and whores for party time... wait, they have a doorman to do it for them, nevermind
A 25th floor apartment may be some people’s ideas of luxury but not mine. I would rather live in a camper trailer on a creek bank than in any super high-rise on the lakefront in Chicago.
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