Housing and Urban Development Secretary Andrew M. Cuomo and Chicago Mayor Richard M. Daley today signed an unprecedented $1.5 billion agreement to demolish virtually all of the city's high-rise public housing developments, widely regarded as the nation's worst examples of failed public housing policy.
Under the ambitious federal-city plan, 51 decaying high-rise buildings containing 16,000 apartment units will be razed and replaced with nearly 25,000 new or rehabilitated units, mostly low-density, mixed-income rental town houses on sites scattered across the city.
Calling the agreement "historic" because of the magnitude of Chicago's public housing problems, Cuomo told a news conference the redevelopment plan reflects a "fundamentally different national policy" that HUD hopes will replace 100,000 deteriorating public housing units in cities across the country either by rebuilding projects or issuing tenants rent subsidy vouchers to pay for private apartments.
"We are going to take down the failed high-rises and stop putting bandages on bullet wounds," Cuomo said in an interview after the news conference. "We aren't going to invest in high-rises anymore, and we're going to replace those that are there with something that works."
Among the dreary high-rises scheduled to be torn down over the next five years by the Chicago Housing Authority are the 32 buildings that make up the crime-plagued and drug-ridden Robert Taylor Homes and Stateway Gardens on the city's South Side and the eight buildings of the Cabrini-Green project on the West Side.
The agreement comes just eight months after Daley regained control of the housing authority from HUD, which had taken over the nation's second-largest public housing agency in 1995 because of poor management, questionable financing practices and neglect of its buildings and tenants.
The relationship between the city and HUD has been tense at times, with Daley accusing federal officials last year of denying him budget flexibility because he had threatened to expose waste and mismanagement at the CHA while HUD was in charge.
The key to the plan ratified today is HUD's permission to Chicago to take advantage of a new law that will allow the CHA to borrow against projected federal funding 10 years in the future to pay for demolition, renovation and construction projects begun now.
The authority, which normally receives $130 million to $150 million a year in capital funding from HUD, has been assured a "level funding stream" of approximately $139 million a year over the next 10 years. Coupled with additional community development block grants and other allocations, the guaranteed funding stream will allow the CHA to sell $1.5 billion in grant anticipation bonds that it plans to use on the project over the next five or six years of accelerated construction, city officials said.
Housing Authority chief Phillip Jackson has also said the authority will diminish its role as principal landlord to the city's poor by privatizing the management of all of its properties by June.
Jackson called the plan "a genuine rethinking and rebirth of public housing for the benefit of those who live there and the taxpayers who have been supporting a failing system."
Cuomo said that HUD had approved 27 of the CHA's 29 requests for waivers of federal regulations, most of which allow the city to speed up its demolition and reconstruction schedule, seek flexible financing and streamline the management process. He said the authority had agreed to safeguards to protect the rights of displaced tenants, including assurances of enough affordable housing in the Chicago market to temporarily absorb displaced families and guarantees that displaced residents can return to public or assisted housing when it becomes available.
After the authority announced its plan in October, residents of some projects voiced concerns that there would not be adequate replacement housing. The city delayed submitting its final proposal to HUD while officials held a series of meetings with tenants. Cuomo said today the residents have been assured of protection during the demolition and relocation phases.
Cuomo said that while the administration's three-year-old public housing initiative had already resulted in razing high-rise projects in such cities as Baltimore, Washington, St. Louis, Atlanta and New Orleans, the Chicago plan was particularly noteworthy because "this is the first time it's being done on such a massive scale in one place."
He noted that during HUD's stewardship of the Chicago Housing Authority, the first steps were begun with the demolition of 6,100 units, including those in the most oppressive section of the Robert Taylor Homes, in 1998.
Cuomo said that today Chicago's public housing projects still contain 11 of the nation's 15 poorest census tracts and have populations that are 92 percent black. He said this is a result of the deliberate targeting 40 years ago of only black neighborhoods for public housing construction to isolate and segregate residents of the projects.
"The tarnished legacy of public housing in Chicago has had many authors," Cuomo said. "What we are saying today . . . is that it is time to move beyond finger-pointing, to join hands and work together in a more productive effort."