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Poor families use 'supervouchers' to rent in city's priciest buildings
Crain's Chicago Busness ^ | 7-28-14 | Alby Gallun

Posted on 07/28/2014 7:04:53 AM PDT by afraidfortherepublic

The high-rise at 500 N. Lake Shore Drive is the second-most expensive in the city, with rents for a one-bedroom apartment approaching $3,000 a month, well beyond the reach of most Chicago residents.

But that's not too much for the Chicago Housing Authority, which has used federal tax dollars to pick up most of the tab for four lucky residents in the year-old building, with its sweeping views of Lake Michigan, a concierge and a dog-grooming center.

The tenants moved in over the past two years as part of a push by the CHA to expand its housing voucher program so that more low-income residents can leave the city's roughest neighborhoods and start a new life in places with low poverty and crime and close to good schools and jobs.

Yet some landlords say it's a mistake to use scarce tax dollars to pay ultra-high rents for a fortunate few when more than 15,000 people sit on the CHA's voucher waiting list.

“This is nuts,” says landlord Tony Rossi, president of Chicago-based RMK Management Corp., who describes himself as a liberal Democrat. “In a situation where you're dealing with a low-income person, do they really need a 25th-floor apartment with a lake view? It just doesn't make sense to me.”

It doesn't make any sense to U.S. Rep. Aaron Schock, either. The Peoria Republican last month pushed a measure through the House to curb the payments and says he is seeking an investigation by the inspector general of the U.S. Department of Housing and Urban Development, which pays for the voucher program and sets many of its rules.

“This is about making sure that people are not abusing the system,” he says.

The CHA says in a statement that the “exception payments” for high-cost apartments cover less than 2 percent of the authority's roughly 38,000 outstanding vouchers. The higher payments—known as supervouchers—are necessary to help low-income residents move into better neighborhoods, which have few affordable housing options, the authority says.

Most landlords agree with the effort to expand the use of “housing choice vouchers,” formerly known as Section 8 vouchers, to more prosperous parts of the city. Vouchers have become a bigger part of the CHA's policy since it tore down big public housing projects like Cabrini-Green, offering recipients more flexibility to choose where to live so they can escape the cycle of poverty.

Under the voucher program, which is federally funded but run by local agencies like the CHA, an eligible resident can rent an apartment in a privately owned building. Voucher holders generally must pay up to 30 percent of their monthly income, if they have any, to cover rent and utilities, with the CHA picking up the rest. HUD caps how much the CHA can pay a landlord. A few years ago, the CHA could not pay more than 110 percent of a fair market rent calculated by HUD. The current fair market rent in Cook County for a one-bedroom apartment is $826 a month.

But HUD allowed the CHA to change its rules in 2010, pushing the cap up to 300 percent in designated “opportunity areas,” such as downtown and Lakeview, where poverty is low and subsidized housing is scarce.

Raising the threshold was essential because rents are so much higher in opportunity areas, making them off-limits under the old restrictions, says Alexander Polikoff, co-director of public housing at Business and Professional People for the Public Interest, an advocacy group.

“It was from a good motivation and a sound policy reason,” he says. “The CHA is to be commended for being one of the only housing authorities in the country that understands the idea of housing mobility.”

The CHA has approved 706 supervouchers since HUD signed off on the higher limits, and the number has jumped in the past two years. The CHA approved 364 in the first half of the year, up from 291 for all of 2013, 44 in 2012 and seven in 2011, according to the authority. Eighty-seven payments exceeded 200 percent of HUD's fair market rent in the first six months of the year, versus 49 for 2013 overall.

Eleven leases hit the 300 percent cap in the first six months of 2014, up from three for last year, according to the CHA. High-end apartment buildings with the highest voucher payments included 500 N. Lake Shore Drive, Aqua Tower in Lakeshore East and the Streeter in Streeterville.

WAITING LIST

In the South Loop, the CHA is subsidizing three tenants at Amli 900, a 440-unit building at 900 S. Clark St.

“Amli supports the efforts in a number of communities across the country in which we operate to provide affordable housing to qualified people,” Greg Mutz, CEO of Chicago-based Amli Residential, which owns the building, says in a statement. “Amli does not support the push to provide luxury rental housing to a lucky few when so many are on the waiting list for basic housing.”

According to the CHA, 15,230 people were on its waiting list for housing vouchers at the end of 2013.

Even Mr. Polikoff, who supports the CHA's broader push, says subsidizing low-income residents in ultra-high-rent buildings is “an inappropriate use of taxpayer money.”

In its statement, the CHA says exception payments provide “CHA families the ability to choose where they want to live and enjoy the great diversity that Chicago communities have to offer.” A HUD spokesman declines to comment.

Some building owners are happy for the business. Justin Elliott, principal at Chicago-based Marc Realty Residential, has few complaints after the CHA approved supervouchers for 36 leases this year and last in a 96-unit building Marc owned at 2300 S. Michigan Ave. Marc recently sold the building, which had the most supervouchers by far among all properties, according to the CHA.

“All in all, we viewed this as a very positive experience,” Mr. Elliott says.

Still, the image of a person on public assistance living in a luxury apartment building could generate a political problem for HUD and the CHA.

In Washington, Mr. Schock's proposal would prohibit exception payments above 120 percent of an area's fair market value calculation. The measure is not expected to go far in the Senate.

Closer to home, Mr. Polikoff says CHA officials told him that the authority plans to lower the cap to 150 percent. The CHA won't confirm that, but its statement did not rule out a change:

“As it does every initiative, CHA has and will continue to evaluate program impact and make adjustments as necessary to ensure it meets objectives—with the ultimate goal of expanding housing options for families in a variety of Chicago neighborhoods.”


TOPICS: Business/Economy; Culture/Society; Government; US: Illinois
KEYWORDS: cha; hud; opportunityzone; rentsubsidies

1 posted on 07/28/2014 7:04:53 AM PDT by afraidfortherepublic
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To: afraidfortherepublic

2 posted on 07/28/2014 7:06:06 AM PDT by afraidfortherepublic
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To: afraidfortherepublic

ObamaJarrett hates “the suburbs” and will implement policies to destroy them and drive out people who like to live there.


3 posted on 07/28/2014 7:08:03 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: afraidfortherepublic

“This is nuts,” says landlord Tony Rossi, president of Chicago-based RMK Management Corp., who describes himself as a liberal Democrat. “In a situation where you’re dealing with a low-income person, do they really need a 25th-floor apartment with a lake view”

...where’s your tolerance and diversity you “liberal democrat” you? “Do they really need” is the mantra of these idiots. How does he know what “they need”? They played by your rules. So go pound sand Tony!


4 posted on 07/28/2014 7:09:05 AM PDT by albie
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To: afraidfortherepublic
PUBLIC HOUSING'S NEW LOOK

The CHA has approved supervouchers for low-income residents in some of the most expensive apartment buildings in the city.

500 N. Lake Shore Drive

The CHA has approved vouchers for residents in four apartments with rents ranging from $2,235 to $2,673 a month.

5 posted on 07/28/2014 7:09:06 AM PDT by afraidfortherepublic
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To: MrB

Move ‘em next door to Rahm, Valerie and Oprah. hee hee


6 posted on 07/28/2014 7:10:00 AM PDT by VerySadAmerican (Liberals were raised by women or wimps. And they're all stupid.)
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To: VerySadAmerican

Sounds good to me!


7 posted on 07/28/2014 7:12:32 AM PDT by Nevadan
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To: afraidfortherepublic

Well we movin on up... to the DEE-luxe apartment in the sky...


8 posted on 07/28/2014 7:12:51 AM PDT by ameribbean expat
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To: afraidfortherepublic

Chicago Housing Authority? Hmmm. Wasn’t a certain evil, corrupt advisor to the Pres_ent the Chairman of the CHA at one point? One might suspect she was attracted to huge opportunities for graft in directing vast sums of taxpayer money to open-handed political donors who just happened to have ownership interests in such swank digs. But that would be too cynical, wouldn’t it?


9 posted on 07/28/2014 7:14:24 AM PDT by Paine in the Neck (Socialism consumes EVERYTHING)
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To: afraidfortherepublic
This is nuts,” says landlord Tony Rossi, president of Chicago-based RMK Management Corp., who describes himself as a liberal Democrat

Ah. Yes. Your typical NIMBY DemocRAT. A NIMBYRAT.

He's the landlord. He gets the money either way. What difference does it make to him who the beneficiary is?

Unless he has a problem with certain poor people. Ahem.

10 posted on 07/28/2014 7:16:17 AM PDT by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all -- Texas Eagle)
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To: afraidfortherepublic

Beats working!


11 posted on 07/28/2014 7:16:48 AM PDT by sickoflibs (King Obama : 'The debate is over. The time for talk is over. Just follow my commands you serfs""')
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To: afraidfortherepublic

As one of my vendors in New York told me, the winos and derelicts always manage to stay at the best addresses, even if it is by a steam grate.


12 posted on 07/28/2014 7:17:17 AM PDT by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: Paine in the Neck

One wonders if the beneficiaries of this largesse are FOO? (Friends of Obama)


13 posted on 07/28/2014 7:19:15 AM PDT by afraidfortherepublic
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To: albie

Exactly my thought too. Liberals tell us to be compassionate for the poor and all that.

Where in the sam hill does he get off, saying what the poor “need” like that? Who the heck does he think he is????


14 posted on 07/28/2014 7:21:40 AM PDT by Dilbert San Diego (s)
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To: Texas Eagle
What difference does it make to him who the beneficiary is?

Maybe it's the renovation costs once the "beneficiary" moves out? Maybe it's the complaints from other tenants about the noise and filth that the "beneficiaries" bring with them? Maybe it's the loss of rental income when other tenants move out?

15 posted on 07/28/2014 7:28:21 AM PDT by Fresh Wind (The last remnants of the Old Republic have been swept away.)
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To: afraidfortherepublic

In addition to following the money, I’d follow the relationships of the people getting these luxury grants to those processing them. There’s got to be some serious favoritism going on, as well as gross waste and incompetence. In other words, when there’s money to be wasted, there’s usually influence involved in the manner and the selection of people on whom it’s wasted.


16 posted on 07/28/2014 7:36:25 AM PDT by Pearls Before Swine
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To: afraidfortherepublic

The comments are worth checking out


17 posted on 07/28/2014 7:37:39 AM PDT by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: afraidfortherepublic
I have an elderly friend who was hounded by some government agency to sell her house. She did a little investigating and found that a number of her neighbors had also gotten harassing calls to sell their houses.

The intent was to get these old people out of their houses and put in welfare recipients using vouchers.

This was an upper middle class neighborhood.

18 posted on 07/28/2014 7:37:49 AM PDT by Slyfox (Satan's goal is to rub out the image of God he sees in the face of every human.)
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To: afraidfortherepublic
Well, the 0bama Administration did say they were going to change every ZIP code in the country to even the score, er, I mean "promote diversity". Did the rich denizens of $hitcago think they were going to be exempt?
19 posted on 07/28/2014 7:38:12 AM PDT by Gritty (Obama's governing as president of a Latin American republic, where only the president matters-MSteyn)
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To: VerySadAmerican
Move ‘em next door to Rahm, Valerie and Oprah. hee hee

You know that will never happen.

20 posted on 07/28/2014 7:39:03 AM PDT by dfwgator
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To: afraidfortherepublic
One wonders if the beneficiaries of this largesse are FOO? (Friends of Obama)

Does a bear.......

21 posted on 07/28/2014 7:39:43 AM PDT by dfwgator
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Imagine A World Without FR.......


Click The Pic To Donate

Donate

22 posted on 07/28/2014 7:39:46 AM PDT by DJ MacWoW (The Fed Gov is not one ring to rule them all)
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To: Fresh Wind
Maybe it's the renovation costs once the "beneficiary" moves out? Maybe it's the complaints from other tenants about the noise and filth that the "beneficiaries" bring with them? Maybe it's the loss of rental income when other tenants move out?

My Conservative heart bleeds for the Liberal Bleeding Heart.

23 posted on 07/28/2014 7:42:13 AM PDT by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all -- Texas Eagle)
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To: afraidfortherepublic
Everyone knew that section 8 tenants were trouble so now they have a new name: the use of “housing choice vouchers,” formerly known as Section 8 vouchers
24 posted on 07/28/2014 7:58:54 AM PDT by RightGeek (FUBO and the donkey you rode in on)
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To: afraidfortherepublic

If you are living in a $3,000 a month apartment and you are not paying any rent, then someone else is working to pay your rent.


25 posted on 07/28/2014 8:12:17 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: afraidfortherepublic
..the CHA to expand its housing voucher program so that more low-income residents can leave the city's roughest neighborhoods and start a new life in places with low poverty and crime and close to good schools and jobs.

Memphis tried this some years ago... seems the 'low income residents - (rather than escaping crime) - took the crime wave with them... The program was a disaster - spreading crime across the city rather than just concentrated in the black community. Police were unable to cope - as the drive time between incidents cut their effectiveness.

On the other hand if the Chicago Housing Authority can move these 'low income residents' into buildings where a large number of liberal elites live in a constant state of delusion, it might be a blessing. Liberal elites will discover reality...

26 posted on 07/28/2014 8:18:22 AM PDT by GOPJ (Liberal elites want Mexicans to be a servant class that supplies cheap drugs and easy women and kids)
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To: albie
Tony, does it matter what floor the people live on? Would you prefer if it was an apartment on the 5th floor? Personally, I don't agree with the program as far as giving vouchers to move into a high rent building. The residents there have paid a price to live in a luxury high rise. Why would anyone allow nonworking people-doesn't matter what their race is;whites and Hispanics get these vouchers also. This assimilation program has proven to be a huge failure in Chicago. Several years ago, former mayor Daley dismanteled Chicago's high rise projects and allowed the displaced residents to move in other neighborhoods which were previously relatively crime free. Now, look at the problems Chicago is having with gangs in basically every part of the city's south and west sides. Years ago, low incom residents were allowed to relocate to the Chicago suburbs. Those locations, relatively peaceful and crime free, have changed drastically into mini Chicagos and the police departments have been overwhelmed and in some cases can barely keep up. Anyway, sorry about the long editorial but, I'm just sayin’.
27 posted on 07/28/2014 9:23:31 AM PDT by Sonnyboy77
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To: afraidfortherepublic

HaHa!!!
maybe some TB carriers can move in also


28 posted on 07/28/2014 9:34:07 AM PDT by ronniesgal (Good Grief.)
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To: Pearls Before Swine
In addition to following the money, I’d follow the relationships of the people getting these luxury grants to those processing them.

Bingo. In the old days, investigative reporters would check this sort of thing out. Today, they all play their role as obedient Regime sock puppets.

29 posted on 07/28/2014 9:43:42 AM PDT by Flick Lives ("I can't believe it's not Fascism!")
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To: afraidfortherepublic
Marc recently sold the building, which had the most supervouchers by far among all properties, according to the CHA.

This sentence caught my eye. I guess MarcRealty wanted to take the upfront cash but not deal with the aftermath of "super-diversifying" its building.

30 posted on 07/28/2014 10:04:40 AM PDT by writmeister
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To: All

Most landlords agree with the effort to expand
the use of “housing choice vouchers,”
formerly known as Section 8 vouchers, to
more prosperous parts of the city.


I don’t believe this. The author offers no evidence and it defies common sense.


31 posted on 07/28/2014 1:05:21 PM PDT by pluvmantelo (Democrats:the party of moral hazard, the IRS, the NSA and the heckler's veto)
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To: pluvmantelo

Donchaknow?

All owners of upscale real estate want people to rent from them who have no stake in upkeep of the property.

Unless they’re racists, of course.


32 posted on 07/28/2014 1:08:32 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: MrB

Exactly.


33 posted on 07/28/2014 1:13:10 PM PDT by pluvmantelo (Democrats:the party of moral hazard, the IRS, the NSA and the heckler's veto)
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To: afraidfortherepublic
wait till they start buzzing in all the dealers, junkies, bangers, pimps and whores for party time...

wait, they have a doorman to do it for them, nevermind

34 posted on 07/28/2014 3:59:53 PM PDT by Chode (Stand UP and Be Counted, or line up and be numbered - *DTOM* -vvv- NO Pity for the LAZY - 86-44)
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To: afraidfortherepublic

A 25th floor apartment may be some people’s ideas of luxury but not mine. I would rather live in a camper trailer on a creek bank than in any super high-rise on the lakefront in Chicago.


35 posted on 07/28/2014 7:29:52 PM PDT by RipSawyer (OPM is the religion of the sheeple.)
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