NCPA - National Center for Policy Analysis

Failed Public Housing Leads To New $1.5 Billion Chicago Project

February 8, 2000

The Department of Housing and Urban Development and the city of Chicago are set to demolish virtually all of the city's 51 decaying high-rise public housing projects and replace them with new or rehabilitated units. Whether the $1.5 billion plan will succeed where the policies of previous decades failed has yet to be seen.

HUD Secretary Andrew M. Cuomo seemed to blame the abject and gigantic failure of the Chicago experiment on its high-rise nature. "We aren't going to invest in high-rises anymore," he said, "and we are going to replace those that are there with something that works."

  • The 16,000 old apartment units will be replaced with 25,000 new units -- mostly low-density, mixed-income rental townhouses on sites scattered throughout the city.
  • Cuomo claims the plan reflects a "fundamentally different national policy" that will replace nearly 100,000 deteriorating public housing units across the country either by rebuilding projects or issuing tenants rent subsidy vouchers to pay for private apartments.
  • Eight months ago, the city regained control of the local housing authority from HUD -- which had taken it over in 1995 because of poor management, questionable financial practices and neglect.
  • Chicago Major Richard M. Daley accused federal officials last year of denying him budget flexibility because he had threatened to expose waste and mismanagement at the Chicago Housing Authority while HUD was in charge.

CHA will receive approximately $139 million a year in federal funds over the next 10 years for use on the new project.

Source: William Claiborne, "HUD, Chicago Ink Deal to Reconstruct Public Housing," Washington Post, February 6, 2000.


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