CHICAGO – Over the past two decades, government-supported public housing in Chicago has been largely confined to neighborhoods of black majority with high concentrations of poverty, a project that perpetuated the city’s long history of segregation.
As these neighborhoods continued to face divestments, armed violence and food deserts, the lack of affordable housing in other parts of the city prevented many people of color from leaving.
But now, using what is currently the largest pot of federal housing finance, Chicago wants to chart a corrective path by aggressively pushing for more affordable homes in high-income, well-resourced areas of the city, something housing experts say will unlock previously unavailable opportunities for communities of color.
Chicago Housing Commissioner Marisa Novara said the city has adjusted its qualified allocation plan to encourage developers to submit proposals for new low-income housing in parts of the city that are richer, more amenable and traditionally exclude people with higher incomes. downtown and people of color. She added that the city is prepared for this by paying more to acquire land in these areas.
Earlier this month, the city revealed the results of a self-assessment of the impact of racial equality, which examined how different racial and ethnic groups are or will be affected by existing or proposed programs, policies or decisions.
While these types of assessments are not new, Chicago says it is the first time that a city has actively taken stock of its own racial heritage when it comes to federal dollars from the Low Income Housing Tax Credit program, the largest source of funding for new popular housing in the United States.
The assessment revealed that the city’s low-income tax program has developed or preserved around 10,000 low-income units across the city since 2000, with 60 percent of the funding going to areas of high poverty.
When divided by race, however, allocations were rigid.
Most of Chicago’s low-income developments are new buildings located in areas of high poverty, mostly black, with a quarter located in high-income “opportunity” areas, although only 35% of the city’s areas have a majority population black.
Less than 20% of the units were in mostly white neighborhoods, although 30% of Chicago’s areas are mostly white. Only 6 percent of the units were developed in majority Latinx areas, although more than 20 percent of all Chicago census tracts have a majority Latinx population, the assessment said.
“Infamous, Chicago is one of the most segregated cities by race and income. We have a disproportionate number of affordable rental residential units in mostly black spaces because, fundamentally, our biggest source of racism is anti-black racism. That’s how we function as a country, ”said Novara. “As there was this fear and racism of not allowing blacks to expand to other parts of the city, more and more housing was built on the south and west sides.”
Using this worrying data, the city said it will now actively restructure the parameters of the Low Income Housing Tax Credit program to reflect racial segregation, driving development in areas with many resources and rich in amenities, giving residents more options and mobility .
The city is allocating $ 61 million for low-income tax credit developments in 2022 and 2023 and opened public comments on the developer’s application until April 15.
The Low Income Housing Tax Credit program was created in 1986 and accounts for about 90% of all affordable rental housing in the country. The program operates under the Department of the Treasury, which offers tax incentives to encourage developers to create affordable housing. These tax credits are granted to states – or, in some cases, cities like Chicago – based on population and are distributed according to popular housing needs through the qualified allocation plan process, which acts as an application for incorporators.
The low-income tax credit program is different from Section 8 or public housing. Generally, “tax credit units are reserved for families with an income equal to or less than 60 percent of the local average income, with rentals not exceeding 30 percent of that maximum income level, and landlords must meet these accessibility requirements for at least 15 years, “according to the Budget and Policy Priorities Center.
In Chicago, which adjusts to family size, to qualify, a family of three would need to earn $ 49,140 or less to reach that mark.
However, the city allocation plan also allows for two other options that adjust to the median income requirement, including one that would be affordable for a family earning up to 50% of the average median income.
In addition to some general guidelines, the federal government does not give much guidance on how funding should be directed, said Shamus Roller, executive director of the National Housing Law Project.
“The federal government does not prescribe where in a given city or how much is built in areas of greatest opportunity or any of these things, so, in practice, what has happened is that mainly across the country, it is the developers who make these decisions about where our properties are built, ”he said. “One factor for them is the low-income neighborhoods that tend to be more expensive to buy the land, but you also face real racism and class discrimination if you try to place it in a low-income neighborhood, which can deter some of the construction. “
And the problem occurs widely across the country. According to the Center on Budget and Policy Priorities, housing with tax credit is disproportionately concentrated in poorer and racially concentrated neighborhoods across the country. Only 15% of the tax credit units are in neighborhoods of low poverty and 56% are in neighborhoods where at least half of the residents are people of color, compared with 40% of all rented units.
“This is not a reflection of some kind of extremely unique problem that is happening only in Chicago, but it is also just one piece of the segregation puzzle,” said Tracy Hadden Loh, a researcher at the Brookings Institution who studies residential segregation. ” a particularly important piece because, as bad as racial residential segregation in the United States is, when combined with income segregation, this type of inequality increases. “
“It’s a problem if blacks are confined and isolated in a specific set of neighborhoods, where they can be targeted by some types of policies, like over-policing,” said Loh, “and where policies can also prevent things like access to quality jobs, high-quality food or open space, because that kind of layer on the ways in which the structural handicap is being concentrated and expands the ways in which all of these impacts can come together. “
Loh added that if state or local governments are looking for ways to reduce segregation, using tax-credit housing, like Chicago, is a good place to start.
“This is one of the things that is on the table and that the public sector can really pull a lever on,” said Loh.
And the benefits of such initiatives can be far-reaching.
A seminal housing study conducted by Harvard University economist Raj Chetty found that children under 13 whose families accepted an experimental voucher to move to a low-poverty area were more likely to go to college and had higher average incomes than children who haven’t moved. In fact, there was an increase of about 31% in earnings in their 20s. “These children also live in better neighborhoods as adults and are less likely to become single parents,” according to the survey.
While the idea may seem ideal in theory, the reality has been much more challenging for similar integration initiatives.
Ann Lott, vice president of housing initiatives for the Inclusive Communities Project, worked on fair and affordable housing initiatives in high-opportunity areas in the Dallas area and found that while opposing groups cite excuses like security and property values, what it really happens to is racing.
“They see affordable housing as equal to housing for low-income black people, and that is what they are fighting against,” she said. “They may argue that it isn’t, but when we start reading their blogs, reading their posts on social media, it’s typically loaded with racial overtones.”
Chicago housing advocates say they are cautiously optimistic about the city’s plan to move forward with mixed-income housing.
Local leadership has exercised power to prevent inclusive housing initiatives in the past, said Andrea Juracek, executive director of Housing Choice Partners, a nonprofit housing organization in Chicago.
“There is this legacy in our city of implicit racism and all these canine whistle policies, but it is great to see that there is a compromise in the city,” she said. “Changing hearts and minds is one thing, but it is systemic changes that need to be made, and this seems to be the beginning.”