Linking Microsoft giving $500 million for Seattle area housing to tech companies and declining gov’t support for housing

Microsoft is pledging a substantial amount to address the important issue of housing in Seattle:

Microsoft plans to lend $225 million at subsidized rates to preserve and build middle-income housing in six cities near its Redmond headquarters. It will put an additional $250 million into low-income housing across the region. Some of those loans may be made through the federal programs that provide tax breaks for low-income housing.

The company plans to invest the money within three years, and expects most of it to go to Seattle’s suburbs.

The loans could go to private or nonprofit developers, or to governmental groups like the King County Housing Authority. As the loans are repaid, Mr. Smith said, Microsoft plans to lend the money out again to support additional projects.

This article frames the giving as part of the housing issues wrought by the actions of tech companies:

Microsoft’s money represents the most ambitious effort by a tech company to directly address the inequality that has spread in areas where the industry is concentrated, particularly on the West Coast. It will fund construction for homes affordable not only to the company’s own non-tech workers, but also for teachers, firefighters and other middle- and low-income residents.

From this point of view, the health of a region matters for companies. If workers, whether ones employed by a particular company or organization or others, cannot find affordable housing, it will be harder for the region to find and hold on to workers. Whereas businesses often focus on a good business climate (low taxes, tax breaks, business-friendly governments, etc.), housing is a big factor in finding a strong work force. Additionally, Microsoft can help show through these actions that they care about local conditions in ways that tech companies are often said to ignore because of their global status. Would Microsoft be the same if it were not in the Seattle region?

Another way to view this is that private companies are now taking on what the federal government should address:

The government spent about three times as much on housing programs in the 1970s as it does today, according to the National Low Income Housing Coalition. In the years since, the government has gotten out of the business of building public housing. And capital funds to repair the remaining public housing stock have been cut in half over the last 15 years.

Over this time, federal resources have increasingly shifted away from subsidizing the construction of affordable housing to subsidizing renters who find housing in the private market. And now most new below-market-rate housing is built not by public agencies, but by nonprofit developers leveraging tax credits. The value of those credits has declined recently as well, as a result of changes in the tax bill passed in 2017.

In a sense, Microsoft’s proposal is an extension of this story, as private actors continue to step in where the government once stood.

Ed Goetz, a professor at the University of Minnesota who has studied the history of public housing in America, said: “I don’t want to diminish the magnitude of what they’re doing. I think it’s important, and it will help. But it won’t solve Seattle’s problem.”

This argument suggests that private actors can only do so much to address housing issues. Because so much money is involved and the issue is so widespread, even $500 million may not do much in a single metropolitan region with high land and housing costs. Of course, the government is involved in the housing industry: the federal government for decades has supported single-family homes, primarily in the suburbs. At the same time, the government and the American people have always been more ambivalent about public housing. It is not as if  the housing market is a free market: the United States subsidizes mortgages.

At the least, this will be an interesting experiment: can Microsoft make even a small dent in the housing needs of the Seattle area? Will this help strengthen the metropolitan region or primarily serve as good publicity for the company?

Gautreaux remediation may end soon in Chicago

Filed in the 1960s, decided in the 1970s, and with remediation lasting decades, a case involving a class-action lawsuit charging racial discrimination in public housing in Chicago may end in 2024:

The Chicago Housing Authority and lawyers representing CHA residents have asked U.S. District Judge Marvin Aspen to approve the agreement creating a road map for the CHA to complete its obligations under the so-called Gautreaux litigation.

Under the plan, the nearly 53-year-old case would come to a close by July 2024, marking an end to a landmark chapter in the national civil rights movement.

The settlement agreement provides a detailed timeline for the CHA to complete all planned mixed-income units and strengthen its housing voucher program to better enable families to move to more affluent areas if they choose to do so…

The lawsuit changed the face of public housing by instituting “scattered site” projects built on a small scale and dispersed in neighborhoods throughout the city — a stark contrast to the high-rise buildings constructed in the 1950s and 1960s.

This important lawsuit and ruling has both had significant effects on how policymakers have addressed concentrated poverty (more emphasis on scattering poor residents) as well as likely had limited effects because of the limited number of poor residents who have had and taken advantage of new opportunities to live in wealthier communities.

What is also striking about this is that the era of large-scale public housing and its associations with concentrated poverty are likely over. Hopefully, this does not mean less attention is paid to residential segregation and affordable housing issues but it is easier for the general public to ignore problems that are less visible.

Former Cabrini-Green site home to the fastest growing American neighborhood of residents making over $200k

A new analysis of Census data suggests the former home to Cabrini-Green housing project high-rises is increasingly the home of wealthy residents:

Cook County, which includes the county seat of Chicago, is home to the No. 1 and No. 7 fastest-growing concentrations of $200,000-plus households. No. 1 is, ironically, the area around where the Cabrini-Green public housing projects once stood. Cabrini-Green was notorious for violent crime, poverty and de facto racial segregation until its demolition beginning in the 1990s at the behest of the Chicago Housing Authority.

Even back then, authorities fretted that redevelopment plans might displace low-income families. They were right to be worried. Two decades later, the area’s concentration of $200,000-plus households has skyrocketed from zero to 39 percent. For some of the longtime residents who remain, the neighborhood’s transformation has been isolating.

Latanya Palmer, 53, grew up in the Cabrini Rowhouses. While she moved into a nearby mixed-income development in 2005, the hypergentrification has occasionally made her feel like a stranger in her own home. That sentiment echoes across the country, as poor and working-class Americans are increasingly pushed aside by frenzied development and prohibitive living expenses…

The census tract in question includes the still-standing, albeit largely vacant row houses where Palmer grew up. But now there are luxury condominiums and apartments, too. They sport rooftop terraces and sparkling views of the city’s affluent Gold Coast and Lake Michigan beyond. A three-bedroom penthouse can cost around $2 million.

This should be no surprise: the proximity of the land to both downtown and Lincoln Park meant that it is was highly desirable for developers and residents. Compare the clamor for the Cabrini-Green land to land where the Robert Taylor Homes once stood.

I would suggest there is a bit of revisionist history above. The claim that “authorities fretted” about the possible displacement of public housing residents is overstated. If anything, the city and Chicago Housing Authority probably could not wait to remove the high-rises (and other ones in the city, including the Robert Taylor Homes). Progress on replacing the units has been slow and with limited effects. The Chicago Housing Authority continues to have long waiting lists for housing. And many of the neighborhoods where public housing high-rises once stood are still relatively poor, even as a construction boom is taking place in the Loop and desirable nearby neighborhoods. In other words, some foresaw the potential for the Cabrini-Green site to be a wealthy neighborhood – and this what the city desired.

For more on why some Cabrini-Green residents fought hard to not be pushed out of their high-rises, see my earlier paper: “The Struggle Over Redevelopment at Cabrini-Green, 1989-2004.”

Chicago aldermen: from selecting public housing sites to blocking affordable housing

Even as Chicago’s mayor suggests more interest in affordable housing, a new report from the Chicago Fair Housing Alliance shows how Chicago aldermen used “aldermanic prerogative” to slow down, water down, or reject certain kinds of housing projects:

Much of the City Council’s power over development is unwritten and informal.

Typically, if a development in a ward needs a zoning change or permit, and the development is not supported by the alderman of that ward, the proposal is voted down if it ever reaches the full City Council. In some cases, a developer can make a proposal, and the presiding alderman or zoning advisory council will dictate changes — such as how many of the apartments will be condominiums and how many should be set aside for lower-income residents. Those negotiations have to be navigated before the proposal can reach the City Council. The development proposal can also linger in the zoning committee, which is another way it eventually dies from inaction…

The study’s authors examined how zoning laws were used to keep low-income public housing residents confined to certain communities and how private market rate housing has been engineered to confine lower-income residents to specific neighborhoods. They also reviewed case by case what happened with most recent efforts to create affordable housing across Chicago…

The report suggests that in order to ensure affordable housing, the city has to take steps to change the way business is conducted and develop a citywide protocol. That plan would have to force each ward to bear some of the weight of producing affordable housing.

Given Chicago’s long history of residential segregation, I would suggest this is primarily about race: wealthier and whiter neighborhoods do not want black and non-white residents to be able to move in. While the issue may seem to be housing with cheaper values or the preference that neighborhood residents have for local control, at the root, this is about controlling who can live in certain places. If given the opportunity, local officials will claim they are simply representing the interests of their constituents.

And this aldermanic power regarding housing has a long history. Here is part of the tale regarding the early days of public housing in the city retold in Alex Kotlowitz’s There Are No Children Here (p. 21-22):

The city’s aldermen first bullied the state legislature into giving them the power of selecting public housing site, a prerogative that had previously belonged to the local housing authority.

Then a group of leading aldermen, who were not above petty vindictiveness, chartered a bus to tour the city in search of potential sites. On the bus ride, they told reporters that they were out to seek vengeance against the Chicago Housing Authority and the seven aldermen who supported public housing, and they chose sites in neighborhoods represented by these aldermen. Like prankish teenagers, they selected the most outrageous of possibilities, including the tennis courts at the University of Chicago and a parcel of land that sat smack in the middle of a major local highway. The message was clear: the CHA and its liberal backers could build public housing but not in their back yards.

The complexes were not, in the end, built at these sites. Instead, they were constructed on the edges of the city’s black ghettoes.

In many instances, the primary way black and other non-white residents have been able to move into new city neighborhoods or suburbs is when whites are willing to leave.

 

A lottery for limited affordable housing housing, part one

Affordable housing is in short supply in numerous American cities and an example of a lottery for 95 affordable housing units in San Francisco illustrates the issue:

Subsidized housing is often rationed this way, by lottery. Many apply, few win, most are disappointed. The process is meant to be more fair than first-come, first-served. But lotteries make literal a deeper unfairness. For homeowners, the mortgage interest deduction is available to anyone who qualifies. For poor renters, there is never enough housing assistance to go around…

Amid all the wealth in this neighborhood, a one-bedroom at Natalie Gubb Commons would rent for around $1,000 to $1,200 a month, a three-bedroom up to $1,700. Apartments next door were three times as much.

That discount is possible through a mix of resources. Mercy Housing, the project’s nonprofit developer, effectively got the land free as part of a city requirement that the neighborhood’s redevelopment include affordable housing. The market-rate developer next door was subsidizing the project, along with city funds. Revenue from the state’s cap-and-trade emissions program helped. And Mercy used the backbone of nearly every affordable housing project in America, federal Low-Income Housing Tax Credits

But the tax bill’s implications for poor renters will be more profound. The odds are likely to grow worse than these: Last year, 53 households applied per each new affordable unit at The Meridian in Los Angeles; 84 for every home at Parcel 25 in Boston; 391 for each unit at Stargell Commons in Alameda, Calif.; 979 for every home at Our Lady of Lourdes Apartments in New York.

This is a reminder of both the acute need for affordable housing in more expensive cities as well as the limited approach to the issue from the federal government. Places that are often held out as the promise of America for their cultural diversity as well as their economic potential – such as San Francisco, New York, Los Angeles, etc. – are often difficult places for those who are middle-class and below.

Additionally, the federal government has never wholeheartedly committed to helping provide housing for all. As the article notes, American housing policy subsidizes single-family homes. This has been an intentional policy choice for decades, beginning before the post World War II suburban boom and then continuing through mass suburbanization as well as into the twenty-first century. It would be difficult to have a direct national political conversation about this since it tends to happen through elected representatives who rarely discuss housing and through various government agencies. Also, it is hard to know whether all those people who have moved to single-family homes in the suburbs have done so because that is what they truly wanted among numerous equal options or they were pushed to some degree by the political and cultural leanings in those directions.

There is another intriguing aspect of this article: both how the lottery is discussed as well as how the lottery is conducted. More on this in a post in a few days.

A new account of the rise and fall of Cabrini-Green

Journalist Ben Austen has a new book titled High-Risers that chronicles the development and tearing down of the Cabrini-Green housing project on Chicago’s north side:

But what caused Cabrini-Green to deteriorate almost immediately after its opening? In “High-Risers,” Austen suggests the repeated, systematic failure of the institutions and people enlisted to run Cabrini-Green fueled its notoriety and downfall. “In every area we examined, from finance to maintenance, from administration to outside contracting, from staffing to project management, from purchasing to accounting, the CHA was found to be operating in a state of profound confusion and disarray,” wrote Oscar Newman in the book “Defensible Space,” which Austen quotes. “No one seems to be minding the store; what’s more, no one seems genuinely to care.”

And yet, Austen’s book is not a detailed deconstruction of the causes of Cabrini-Green’s difficulties. Instead, he uses a novelistic structure to weave a tale about the other side of Cabrini-Green: its inhabitants.

Austen offers the stories of a few Cabrini-Green residents as they move in and out of the projects. There is Kelvin Cannon, a highly intelligent and charismatic resident who grows from precocious and superstitious kid to convicted criminal to high-ranking gang member in only a handful of years. There is Willie J.R. Fleming, who leaves Cabrini-Green after relocating to south suburban Dolton with his mother, only to return less than a year later. The quiet of the suburbs proved too uncomfortable for Fleming, who, despite the promise of a college athletic career, squanders it all away back in Cabrini-Green after throwing a punch…

Austen writes with a lyrical, poetic affection for the four main characters. Here we see there are as many Cabrini-Green origin stories as there were people living in Cabrini-Green. To merely stereotype is to willfully ignore each resident’s humanity. Austen deftly tells the stories of Wilson, Fleming, Cannon and another woman, Annie Ricks, without distance, bringing readers intimately into their lives. It is compelling writing, sure to separate Austen’s work from other, more anthropological examinations of Cabrini-Green.

Rarely does public housing in the United States, let alone a notorious project, receive much attention from journalists, scholars, or the public. Yet, this is a unique site. This kind of change does not occur often in American urban neighborhoods: poor black neighborhoods are not typically the target of gentrification efforts.

The story of this project is still not complete: even though the high-rises are no longer there and the buildings and neighborhood now there are hard to distinguish from other up-and-coming Chicago scenes, there are still public housing residents present (in addition to former residents who are now elsewhere) as well as memories (which could fade with generations but that could also remain in more institutionalized forms like a public housing museum in Chicago). Like many other urban neighborhoods, Cabrini-Green may be erased from a map or largely from sight but it may continue to shape not only that particular space but the whole city.

Public housing may not just be about the housing

Public housing expert Susan Popkin argues that simply replacing the units from Chicago’s public housing high-rises may not be enough:

I think it was a partial victory. It was a whole lot more successful than anybody expected at the beginning. The odds of it being an absolute failure were pretty high. In the first phases of the plan, they were really struggling to get the buildings down and get people out of them, and they had 11 buildings they had targeted to relocate people from. So people ended up moving from one bad unit in a building that was slated to come down to one that was going to come down later…

So there was a lot of hope that it would do more than just improve people’s physical circumstances. It did reduce anxiety, which is important, but it really took extra wrap-around services before we saw real improvements in people’s mental health and their employment. They’re still very poor, but they’re working more. I think that there was recognition that the people in public housing really need a lot of the services they weren’t getting.

One of your arguments is that providing housing alone is not enough.

Especially not for the kids. The biggest disappointment for me was even when we got the wrap-around services, the parents were doing better, but they were still reporting that their kids were really struggling. And when we talked to the kids, the kids were talking about fighting, feeling really rejected in their new community, doing badly in school—not all, some of them were OK—but a higher proportion than we would have wanted to see.

The physical form of public housing may have changed from high-rises to mixed-income neighborhoods and more decentralized units but some of the basic issues are still the same: are there enough units? Are these units better than substandard and not always located in poor neighborhoods? Are there services available for public housing residents? This is not to downplay the importance of decent housing – it is an overlooked essential in the United States since where you live tends to determine many life outcomes – but it is really about housing plus the community and the opportunities that are or are not available.

A related question: what is the timeline for declaring the Plan for Transformation a success or failure? I wonder if the Chicago Housing Authority and city would rather just not recognize the results of the project at all.