CHICAGO – Over the past two decades, government-backed affordable housing in Chicago has largely been confined to majority-black neighborhoods with high concentrations of poverty, a design that has perpetuated the city’s long history of segregation.
As these neighborhoods continued to face increased divestment, gun violence and food deserts, a lack of affordable housing in other parts of the city kept many people of color from leaving.
But now, using what is currently its largest amount of federal housing funding, Chicago wants to chart a corrective path by aggressively pushing for more affordable housing in high-income, well-resourced areas of the city, something that housing experts say will unlock. that was not available before. opportunities for communities of color.
Chicago Housing Commissioner Marisa Novara said the city has modified its qualified allocation plan to encourage developers to submit proposals for new affordable housing in parts of the city that have higher incomes, abound in amenities and have traditionally excluding people with lower incomes and people of color. He added that the city is prepared to make it happen by paying more to acquire land in these areas.
Earlier this month, the city released the results of a self-conducted racial equity impact assessment that 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 a city has actively assessed its own racial equity when it comes to federal dollars from the Low Income Housing Tax Credit program, the largest source of funding for new affordable homes in the United States.
The assessment revealed that the city’s low-income tax program has developed or preserved about 10,000 low-income units citywide since 2000, with 60 percent of the funds going to high-poverty areas. .
However, when broken down by race, the assignments were flagged.
The majority of Chicago’s low-income developments have been new construction located in high-poverty and mostly black areas, with a quarter located in higher-income “opportunity” areas, though only 35 percent of the the city has predominantly black populations.
Less than 20 percent of the units were in mostly white neighborhoods, although 30 percent of Chicago areas are mostly white. Only 6 percent of the units were developed in Latinx-majority areas, despite the fact that more than 20 percent of all Chicago census tracts have a Latinx-majority population, according to the assessment.
“Infamously, Chicago is one of the cities most segregated by race and income. We have a disproportionate number of affordable rental housing units in majority black spaces because, fundamentally, our greatest source of racism is anti-black racism. This is how we function as a country, ”said Novara. “Because of the fear and racism of not allowing blacks to expand to other parts of the city, more and more houses were built on the south and west sides.”
Using this sobering data, the city said it will now actively restructure the Low Income Housing Tax Credit program parameters to reflect racial segregation by driving development in resource-rich, amenity-rich areas, thereby providing residents with more options and mobility.
The city is allocating $ 61 million for 2022 and 2023 low-income tax credit developments and has opened public comments on the application for developers through April 15.
The Low Income Housing Tax Credit program was created in 1986 and accounts for approximately 90 percent of all affordable rental housing in the nation. The program operates under the Department of the Treasury, which offers tax incentives to encourage developers to create affordable housing. These tax credits are awarded to states, or in some cases, cities like Chicago, based on population and are distributed according to affordable housing needs through the Qualified Allocation Plan process, which acts as an application for the developers.
The low-income tax credit program is different from Section 8 or public housing. Generally, “tax credit units are reserved for households with incomes equal to or less than 60 percent of local median income with rents no greater than 30 percent of that maximum income level, and homeowners must meet these requirements. affordability for at least 15 years. ” according to the Center for Budget and Policy Priorities.
In Chicago, which is adjusted for family size, to qualify, a family of three would have to earn $ 49,140 or less to reach that mark.
However, the city’s allocation plan also allows for two other options that adjust the median income requirement, including one that would be affordable for a household earning up to 50 percent of the median median income.
Aside from some general guidelines, the federal government doesn’t provide much guidance on how funds should be directed, said Shamus Roller, executive director of the National Housing Law Project.
“The federal government is not prescriptive about where in a certain city or how much is built in areas of greater opportunity or any of those things, so, in practice, what has happened is that, mainly throughout the country It’s the developers who make those decisions about where our properties are built, ”he said. “One factor for them is that lower-poverty neighborhoods tend to be more expensive to buy the land, but you also run into real racism and class discrimination if you’re going to try to place it in a low-poverty neighborhood, which can deter some from the building. “
And the problem extends throughout the country. According to the Center for Budget and Policy Priorities, tax credit housing is disproportionately concentrated in the poorest and most racially concentrated neighborhoods across the country. Only 15 percent of tax credit units are in low-income neighborhoods and 56 percent in neighborhoods where at least half of the residents are people of color, compared to 40 percent of all units of rental.
“This is not a reflection of some extremely unique kind of problem that is happening only in Chicago, but it is also just one piece of the segregation puzzle,” said Tracy Hadden Loh, a fellow at the Brookings Institution who studies residential segregation. It’s a particularly important piece because as bad as residential racial segregation is in the US, when you combine it with income segregation, inequality accumulates. “
“It’s a problem if black people are confined and isolated in a specific set of neighborhoods where they can then be targeted by some kinds of policies like excessive surveillance,” Loh said, “and where policies can also prevent things like access to quality jobs, high-quality food, or open space because that’s just a kind of layering on the ways in which the structural disadvantages are concentrated and magnifies the ways in which all these impacts can come together.
Loh added that if state or local governments are looking for ways to reduce segregation, then using tax-credit homes, like Chicago, is a good place to start.
“This is one of the things that are on the table that the public sector can really pull a lever on,” Loh said.
And the benefits of such initiatives could be far-reaching.
A seminal housing study by Harvard University economist Raj Chetty found that children under the age of 13 whose families took an experimental voucher to move to a lower poverty area were more likely to go to college and had average incomes. taller than children who did not move. . In fact, there was about a 31 percent increase in earnings in the mid-20s. “These kids also live in better neighborhoods as adults and are less likely to become single parents,” according to the research.
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 opposition groups will cite excuses such as safety and values of the property, what it really comes down to is race.
“They see affordable housing as housing for low-income black people, and that’s what they’re fighting against,” he said. “They can argue that it isn’t, but when we start reading their blogs, reading their social media posts, it’s usually loaded with racial undertones.”
Chicago housing advocates say they are cautiously optimistic about the city’s plan to move forward with mixed-income housing.
Local leadership has wielded power to stop inclusive housing initiatives in the past, said Andrea Juracek, executive director of Housing Choice Partners, a nonprofit housing organization in Chicago.
“There is a legacy in our city of unspoken racism and all these dog whistling policies, but it’s great to see at the city level that there is a commitment,” he said. “Changing the heart and mind is one thing, but it is the systemic changes that must be made, and this seems to be the beginning.”