CHICAGO – Over the past two decades, affordable government housing in Chicago has been largely 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 increasingly declined, faced gun violence and food deserts, the lack of affordable housing in other parts of the city limited many coloreds to leave.
But now, using what is currently the largest pot of federal housing finance, Chicago wants to show a corrective path by aggressively pursuing more affordable housing in high-income areas and well-available resources, something housing experts say would previously be unavailable . opportunities for communities of color.
Marisa Novara, commissioner for housing in Chicago, said the city has adapted its qualified allocation plan to encourage developers to submit proposals for affordable housing in parts of the city with higher incomes, rich in amenities and what people with ‘ excluded a lower income and colored of old. She added that the city is willing to make it happen by paying more to acquire land in these areas.
Earlier this month, the city announced the results of an impact study on self-conducted racial equity, which examines how different racial and ethnic groups are or will be affected by existing or proposed programs, policies or decisions.
While this kind of assessment is not new, Chicago says it’s the first time a city is actively studying its own race capital when it comes to federal dollars from the low-income housing credit program, the largest source of funding for new affordable housing. the United States.
The assessment revealed that since 2000, the city’s low-income tax program has developed or maintained about 10,000 low-income units across the city, with 60 percent of the funding going to high-poverty areas.
However, according to race, the allocation was strong.
Most of Chicago’s low-income development was new construction in black areas with a lot of poverty, with a quarter in areas with higher incomes, although only 35 percent of the neighborhoods have more black populations.
Less than 20 percent of the units were in white neighborhoods, although 30 percent of Chicago’s pieces are white. Only 6 percent of the units were developed in majority Latinx areas, although more than 20 percent of all Chicago census areas have a majority Latinx population, the review said.
‘Notoriously Chicago is one of the most segregated cities by race and income. We have an exorbitant number of affordable rental homes in majority black spaces because our biggest source of racism is basically anti-black racism. That’s how we function as a country, ‘Novara said. “Because there is this fear and racism of not allowing black people to spread to other parts of the city, more and more housing has been built on the South and West.”
Using this sobering data, the city said it would now actively restructure the parameters of the low-income household tax collection program to reflect racial segregation by conveniently promoting development in resource-rich areas, giving residents more choices and to provide mobility.
The city is allocating $ 61 million for development tax credit developments in 2022 and 2023 and has provided public comment on the developer application until April 15.
The Low-Income Tax Credit Program was created in 1986 and accounts for about 90 percent of all affordable rental housing in the country. The program operates under the Department of Treasury, which provides tax incentives to encourage developers to create affordable housing. These tax credits are given to states – or in some cases, cities like Chicago – by population and are distributed according to affordable housing needs through the qualified grant planning process, which serves as an application for developers.
The low-income tax credit program differs from section 8 or public housing. Generally, ‘tax credit units’ are set aside for households with an income of or less than 60 per cent of the local median income with rents not exceeding 30 per cent of the maximum income, and owners must pay at least 15 years for these affordable requirements’ according to the Center for Budget and Policy Priorities.
In Chicago, which adapts to family size, a family of three must earn $ 49,140 or less to qualify.
However, the city’s allocation plan also provides for two other options that adjust the median requirement, including one that would be affordable for a household earning up to 50 percent of the average median income.
Apart from a few general guidelines, the federal government does not provide much guidance on how funding should be directed, said Shamus Roller, executive director of the National Housing Law Project.
‘The federal government is not prescriptive about where in a given city or how much is being built in areas with a greater opportunity or any of those things. That is why it is in practice that developers mostly make decisions about the whole country where our properties are built, ”he said. ‘One driving force for them is that neighborhoods with less poverty tend to be more expensive to buy land, but also that you really experience racism and class discrimination if you try to place it in a low-poverty environment, which can be daunting. some of the building. ”
And the problem is widespread across the country. According to the Center for Budget and Policy Priorities, tax credit housing is overly concentrated in poorer, race-based neighborhoods nationwide. Only 15 percent of the tax credit units are in low-poverty neighborhoods and 56 percent in neighborhoods where at least half of the residents are colored, compared to 40 percent of all rental units.
“It’s not a reflection of some kind of extremely unique problem that’s just going on in Chicago, but it’s just one piece of the puzzle of segregation,” said Tracy Hadden Loh, a fellow at the Brookings Institution. studying residential segregation, said. This is a very important piece, because as bad as racial segregation in residential homes in the United States, when you combine that with income segregation, that kind of inequality increases. “
‘It’s a problem when black people are locked up and isolated in a specific neighborhood, where they can then be targeted by some kind of policies, such as over-policing,’ Loh said, ‘and where policies also include things like access to good work can withstand quality, high quality food or an open space, because that kind of lowers the ways in which structural disadvantage is concentrated and magnifies the ways in which all these effects can come together. ”
Loh added that if the state or local governments are looking for ways to reduce segregation, then using tax credit housing, like Chicago, is a good place to start.
“This is one of the things in question on which the public sector can take a lever,” Loh said.
And the benefits of such initiatives can be far-reaching.
A business study by Raj Chetty, an economist at Harvard University, found that children under the age of 13 whose families adopted an experimental voucher to move to an area with less poverty were more likely to go to university. and had a higher average income than children who did not move. . In fact, there was about 31 percent in earnings by their mid 20s. “These children also live as adults in better neighborhoods and are less likely to become single parents,” according to the research.
Although the idea seems ideal in theory, the reality was much more challenging for similar integration initiatives.
Ann Lott, vice president of housing initiatives for the Inclusive Communities Project, worked on affordable and affordable housing initiatives in areas with great opportunities in the Dallas area and found that while opposing groups would cite excuses such as security and property values, what it really boils down to is race.
“They view affordable housing as equivalent to low-income black people, and they fight against it,” she said. “They may argue that this is not the case, but when we start reading their blogs and reading their social media posts, it’s usually loaded with racial undertones.”
Chicago’s housing advocates say they are cautiously optimistic about the city’s plan to continue with mixed-income housing.
Local leadership has in the past used its power to stop inclusive housing initiatives, said Andrea Juracek, executive director of Housing Choice Partners, a non-profit organization in Chicago.
“There’s just such a legacy in our city of unspoken racism and all this dog whistle politics, but it’s great to see at city level that there’s a commitment,” she said. “The change of heart and mind is one thing, but it’s the systemic changes that need to be made, and that seems to be the beginning of it.”