Chicago Housing Authority Chairman Vincent Lane’s proposal to raise $1 billion or more in a bond sale this year would give financial muscle, for the first time, to his grand plans for a precedent-setting transformation of the city’s public housing system.
For more than a year, Lane has been trumpeting his hopes to turn CHA developments from isolated enclaves of hyper-concentrated poverty into “normal neighborhoods” with a mix of family incomes.
He even won a $50 million federal grant last fall to begin that massive task at the Cabrini-Green complex. But that money is a drop in the bucket to the hundreds of millions that will be needed if Lane’s scheme is to be implemented throughout the authority.
With $1 billion or more from a bond sale, Lane said Friday that he would be able to start work at several developments simultaneously, such as ABLA and Horner on the West Side and the Lakefront Properties on the South Side.
“This is the revolution I’ve been waiting for,” Lane said, fairly clicking his heels together with excitement.
That revolution is long overdue in a housing authority that Lane himself has characterized as the worst in the nation, an opinion reiterated Friday by U.S. Housing and Urban Development Secretary Henry Cisneros.
“Let me tell you in no uncertain terms,” Cisneros said during a luncheon speech in Chicago. “In the landscape of urban misery in 1994, Robert Taylor Homes are the worst in America.”
But the problems of the CHA-deep poverty, high crime, drugs, welfare dependency, social isolation-are endemic in much of the nation’s housing authorities.
Public housing was initially established as the temporary home for financially strapped families. However, because of well-meaning but misguided federal laws, it evolved into the housing for the poorest of the poor. Working-class families were driven out by high rents, and developments became concentrations of virtually all urban problems, each of which fueled the other.
In Chicago, the problems of public housing were exacerbated by local officials who isolated developments in unwanted urban backwaters and used the buildings to segregate poor blacks from the rest of the city.
“It was a major public policy mistake to build the public housing you see today,” Lane said last month during a discussion of alternatives for the Lakefront Properties development that included demolishing four high-rises.
Lane’s plans for the transformation of the CHA-soon to get underway at the Cabrini-Green complex on the Near North Side-involve a two-prong approach:
– Lane wants to attract working-class families to public housing.
The idea is that these families and poor families, now in public housing, would live together in the same housing. (Lane’s already been able to accomplish this in a two-building Lake Parc development on the Near North Side.)
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In some cases, this would be in renovated high-rises. But, in most, it would be in new low-rise housing built and managed by private developers. These new subdivisions would be on CHA land or on land that the CHA would obtain. Under Lane’s proposals, three-quarters of the homes would go to working-class households while the CHA would rent the other quarter for public housing-eligible families.
The hope would be that the working people would provide solid role models, and act as a stabilizing force for the neighborhoods.
– Lane also wants to give CHA families the opportunity to live elsewhere in the city and suburbs.
In part, this is a strategy to reduce the density of poor people at public housing locations. But, more important, according to Lane, it is an effort “to give poor people the same opportunities everyone else has.”
Through a variety of programs, the CHA would buy, build or rent single-family homes, two-flats and small apartment buildings throughout the metropolitan area for families now in public housing. In addition, present CHA residents would be helped to rent apartments on their own through a federal rent subsidy program.
But Lane’s sweeping plans come with a huge price tag.
Lane has estimated that it will cost as much as $350 million to remake just the Cabrini-Green development.
Similar outlays would be needed at the city’s 17 other public housing complexes.
It would be a change in federal law, to be proposed this week by the Clinton administration, that would open the way for Lane to sell $1 billion or more in bonds later this year and get a running start on that redevelopment work.
During a visit to Chicago, Cisneros said the change to be proposed to Congress Wednesday would lift restrictions on the way local officials spend federal money now earmarked to repair and rehabilitate public housing buildings.
Cisneros said the change will permit housing authorities to use the money, called modernization funds, to back up a bond issue such as the one contemplated by Lane. It would give a housing authority access “to a very large sum of money for aggressive replacement of high-rise public housing.”
Regarding the significance of the law change and of Lane’s plans, Cisneros said, “If we can do it, it will be one of the great legacies of Mayor (Richard M.) Daley and the City of Chicago to undo a problem that, for generations, has isolated people and made life more difficult in Chicago. And it will be a contribution to the nation because it is a tool we will be able to use across the nation.”
He noted that Lane “has a lot to do with the fact that we are considering this concept.”
Details of the new law were incomplete last week, as were details of Lane’s plans for a bond issue.
John Sebastian, executive vice president of Clayton Brown & Associates, a Chicago-based municipal bond firm, said a key detail will be whether Cisneros’s Department of Housing and Urban Development guarantees to potential bond-buyers that the CHA will continue to receive the modernization funds for the life of the bonds.
In that case, the bonds would be, he said, “a terrific investment.”
While such details remained to be worked out last week, Lane was optimistic.
“The money is here. All we have to do is get Congress to let us do it,” he said.