Preservation Proposal #2: Create a $5 million resident relocation fund for both publicly-owned and privately-owned affordable housing
Return to 2019 Chicago Housing Agenda
Relocation is a big deal in Chicago. A really big deal. Under the Chicago Housing Authority’s Plan for Transformation, tens of thousands of residents were relocated from high-rise public housing to permit the redevelopment of these sites into mixed-income housing that aims to physically de-densify and disperse the concentrations of poor families blamed for the social ills of Chicago’s high-rise public housing. While the question of root causes is, perhaps, more complex, it is indisputable that relocation is a complicated but necessary aspect of affordable housing.
Even the most resident-centered organizations can be caught in a bind when it comes to resident relocation. Buildings and units require maintenance and upkeep, and despite an niche industry focus on resident-in-place renovations, there are occasionally limits to what can be done without having 15-30 units to create a vacant floor or two in the time frame needed. It is also not easy to strike the appropriate balance between avoiding disrupting the experience of residents and deferring maintenance to the point where it poses even greater costs, or worse, becomes a danger to the life and safety of the residents (something not always so clearly foreseen). However, simply renovating units when they become vacant can create an appearance of neglect for long-term residents and furthermore, the low margins of affordable housing often makes it financially difficult to comprehensively complete all the needed work only through resident turnover (vs. a single capital project).
The advocacy and criticism of even the Chicago Housing Authority (CHA) in how it renovates senior housing renovations brings the situation front and center. Questions of who pays for moving expenses, how to manage inevitable changes in schedules, how much say residents have in the specific renovation plans of the owner, and other similar discussions only buttress how much easier it can for nothing to happen at all, even when nothing is in no one’s best interest. While one approach is to presume bad intentions, a more effective approach would be to view the controversies of relocation as an opportunity to invest in a manner that promotes making necessary improvements to properties to ensure their long-term affordability. The reliance of affordable housing on private ownership and public-private partnerships creates a disincentive for leaving any series of units vacant for any extended time, even when the economics of a renovation may otherwise suggest just that.
That reality is that while, yes, there is a robust Uniform Relocation Act and series of cascading provisions obligating a developer or landlord to strictly follow procedures in determining, informing, advising and relocating residents protected by relocation rights, these provisions frequently discourage extensive efforts to renovate housing for the residents they are designed to protect. Some programs, like the HUD’s Rental Assistance Demonstration Program designed explicitly to support building renovation while protecting tenants, have a an explicit contractual component of rehabilitation assistance payments that allow a housing authority or another landlord to temporarily relocate a resident (requiring payment of moving expenses and payments to offset any additional living expenses) and still receive associated subsidy to ensure the property does not suffer from the vacancy. This type of support must not be limited only to the subset of properties undergoing RAD conversions.
Proposal: Create a $5 million revolving resident relocation fund that would serve as a new source of operational support for landlords who make substantial improvement in rental property in Chicago in exchange for committing to a series of local and national best practices of how best to manage resident relocation. 75% of the funds would be earmarked for CHA, enabling it and other landlords to more aggressively improve it’s housing stock with the improved consideration of options to place residents in off-site housing when deemed necessary for their timely completion of the renovation work and in the best interests of the resident’s well-being. These funds could be used flexibly to cover costs related to the administration of relocation planning (providing notices, identifying alternative housing, relocation advisory services, submitting plans to city agencies), moving expenses and differences in rental expenses that residents may face. The fund will be funded by the existing Affordable Housing Opportunity Fund and it will provide loans in the form of a low-interest loans with payment schedules after the completion of the relocation and associated renovation activity.
