Housing Crisis Puts the Hurt on the CHA
By Kevin Robinson in News on Feb 9, 2009 3:20PM
It isn't just local developers and regular homeowners that are having a hard time in the current housing market. Crain's Chicago Business is reporting that even the Chicago Housing Authority is feeling the pinch.
After nearly a year of stalled home sales, the Chicago Housing Authority is shifting gears to focus on developing rental units, which are easier to finance but target more impoverished and lower-income residents than the for-sale units aimed at middle-class buyers. The change in strategy comes as some CHA redevelopment projects show signs of financial stress, with developers stopping construction or auctioning off unsold homes at bargain prices.
CHA officials downplay the shift, saying they are merely adapting to the harsh market conditions and aren't abandoning the "market-rate" aspects of the daunting plan to renovate or rebuild 25,000 residential units. The new approach eases pressure on the agency to deliver new units to former CHA residents displaced by the demolition phase of the long-delayed project. But as the depression in the housing market drags on, the Daley administration's new approach runs the risk of jeopardizing a key part of that plan.
The shift in development strategies could be just the tip of the iceberg for the CHA's long-delayed Plan for Transformation. "If we build only the rental now, how will that affect bringing in the for-sale later?" asked attorney Julie Brown at Business and Professional People for the Public Interest, the Chicago-based non-profit that represents plaintiffs in the long-running federal suit to desegregate the city's public housing. The joint venture that is pursuing redevelopment of Stateway Gardens, renamed Park Boulevard has already lost more than $10 million dollars. "There's no market," says Allison Davis, a managing partner in the joint venture. "It's not just here — it's everywhere in the city and suburbs."
Photo by TheeErin