Pool housing funds from different agencies to build more affordable housing

Credit: Metropolitan Planning Council

Like so many other metropolitan areas across the country, Chicago long faced a thorny dilemma: how best to ensure affordable housing without creating different problems, particularly de facto segregation by race and the warehousing of poor people. As a basic matter, local officials recognized an urgent need to simply increase the housing supply; unfortunately, what scarce funds were available to the various housing authorities couldn’t be matched with the available places to build new units. Chicago had more Housing Choice Voucher “Section 8” program funds to spend but fewer places for new construction, while smaller suburban housing authorities had available sites but not enough Section 8 voucher funds.

So in 2002, local stakeholders hit upon a solution. They decided to pool the housing authorities’ voucher funds, thereby making more financial resources available to build housing units across a bigger geographical area. Thanks to the new collaboration, the Regional Housing Initiative, tenants can now access more neighborhoods than before as well.

That innovative experiment’s promising results are now sparking national interest. The Atlantic, for example, explains the encouraging outcomes so far here:

This has a number of benefits. It guarantees that voucher-holders will be able to find units in good neighborhoods. It helps finance construction of mixed-income units in the suburbs, where the price of land often makes it tough to do affordable developments. When the state of Illinois distributes low-income housing tax credits, which are essential for developers who want to build affordable housing without losing money, it favors projects that have Section 8 units, so these units are also more likely to get funded than, for example, affordable units in struggling neighborhoods with no Section 8 units.

The project has been responsible for building 2,047 new apartment units in 30 developments since then. About 467 of those units are reserved for residents making less than half of the area median income. The units are all over the area, including in tony suburbs like Glenview.

“It’s really in some ways a workaround that we’ve created in the Chicago area to create more affordable and mixed-income housing in suburban opportunity areas,” Breann Gala, a project manager at the Metropolitan Planning Council, which helps run the RHI, told me. “We see this as a tool for both de-concentrating poverty and promoting access to opportunity.”

Other local governments, advocates of economic opportunity, and business leaders all alike should take note. For more information, see “Project Profiles in Regional Housing Mobility Chicago and Rockford,” Prepared for the U.S. Department of Housing and Urban Development (HUD) (2016); “Regional Housing Initiative,” Metropolitan Planning Council (accessed 2016); “How Chicago Is Trying to Integrate Its Suburbs,” The Atlantic (2016).