Will new HUD rule help more families escape high-poverty, high-crime neighborhoods?

BY ALBY GALLUN

July 30, 2016

Angela Rivera with her children, Tyson, from left, Tamia and Trinity at their home in Streamwood.

 

It didn't take Angela Rivera long to figure out that her new apartment in Chicago's Woodlawn neighborhood was no place to raise her three children.

Within the first few months of moving in, Rivera's car was broken into and her three-bedroom apartment at 67th Street and Dorchester Avenue—paid for with a housing voucher from the Chicago Housing Authority—was burglarized. The schools were “iffy,” and there were so many shootings that she wouldn't let her kids go outside to play. “There were times we had to move to the middle of the apartment to stay away from the windows,” Rivera recalls.

Her story illustrates a fundamental problem that federal housing officials are trying to solve through a proposed change in the Housing Choice Voucher, or Section 8, program. Believing that where people live plays a big role in how successful they will be in life, federal officials want to help more voucher holders escape high-poverty, high-crime areas by removing barriers to wealthier, safer neighborhoods with good schools.

Rivera, a single mom, already has made the switch. After 14 months in Woodlawn (median household income: $26,997), she and her family moved in December to a townhouse in west suburban Streamwood (median household income: $72,720), paying for it with a housing voucher through the Housing Authority of Cook County. She's glad she did.

Her children—two daughters, ages 8 and 14, and an 11-year-old son—”can ride their bikes now and play like normal children,” says Rivera, 34. “It's safer, we like the schools and we're all happy now.”

Yet housing officials say the voucher system makes it too hard for people like Rivera to move out of depressed neighborhoods and make a better life in places with more opportunity. Academic research suggests a link between a person's neighborhood and long-term economic success: A study published last year by Harvard University economists Raj Chetty and Nathaniel Hendren found that young children who moved to better neighborhoods on housing vouchers fared better economically over the long term than ones who didn't. 

AKING IT EASIER

Now the Department of Housing and Urban Development wants to change its program to make such moves easier. Under the current system, voucher holders must pay 30 percent of their income, if they have any, for rent and utilities. The vouchers cover the difference between that 30 percent and the full cost of renting the apartment or home.

Currently in Chicago, a voucher holder can theoretically live in any rental property as long as rents are within an acceptable range of the metropolitan area's fair market rent, a figure calculated by HUD. The current fair market rent in the Chicago area is $1,001 a month for a one-bedroom housing unit, $1,176 for two bedrooms and $1,494 for three.

The problem, according to HUD, is that rents vary so widely over a big metro area. As a result, many wealthier and safer neighborhoods where rents are higher are off-limits to voucher holders. The current system just perpetuates segregation, critics say. “I think everybody would agree—from HUD on down—that the potential of the voucher program is not being realized,” says Alexander Polikoff, co-director of public housing for Business and Professional People for the Public Interest, an advocacy group in Chicago. 

Most voucher holders in Chicago live in African-American neighborhoods with low incomes and high crime. The 15 city ZIP codes with the most voucher holders are all on the South and West sides; 30,434 households using vouchers live in those 15 ZIP codes, 73 percent of the city's total, excluding residents in buildings dedicated exclusively to voucher holders, according to the Chicago Housing Authority, which runs the voucher program. The program supports only 55 households in Lincoln Park's 60614.

The CHA tried to address the wide disparity a few years ago by creating “supervouchers,”which bumped up the max on rents so much that some lucky CHA residents were able to live in the most expensive luxury high-rises in the city. Amid scathing criticism, the agency scaled back the initiative.

HUD is now trying a different approach: calculating fair market rents at the ZIP code level, allowing housing agencies to provide larger subsidies in wealthier neighborhoods and smaller ones in poorer areas. In several downtown ZIP codes, the fair market rent would be $1,590 for a two-bedroom apartment, according to HUD. In 60653, which covers Bronzeville, it would be almost half that much, $850.

Though the proposed change seems like a programming tweak, Richard Monocchio, executive director of the Housing Authority of Cook County in Chicago, predicts “it's going to change many, many lives.”

With HUD's permission, the county housing authority started using ZIP code-level rents about two years ago. It hired six employees to assist families moving into “opportunity areas” and aims to help 140 do so this year, Monocchio says. The agency relocated 40 by midyear.

Not everyone is sold. Howard Husock, vice president at the Manhattan Institute, a conservative think tank in Washington, D.C., sees the potential for conflict. “When we move more extremely poor people into neighborhoods where people are more affluent, to me it's a recipe for creating social tension,” he says.

Another potential problem: Because fair market rents would fall in poorer ZIP codes, landlords in those neighborhoods would receive less income from vouchers—and less money to maintain their properties. “You want to make sure that you don't cause disinvestment in those communities,” says Michael Mini, executive vice president of the Chicagoland Apartment Association.

HUD is accepting public comments on the proposed rule change until Aug. 15. If it passes, it would apply to 31 metro areas, including Chicago. 

CHA CEO Eugene Jones Jr. declines to comment on the HUD proposal. About 46,000 people have received vouchers through the CHA this year, up from fewer than 35,000 in 2007—but about 43,000 are on the waiting list.

Many voucher holders are happy to stay put, even in neighborhoods with bad schools, constant violence and few jobs. Some simply don't want to leave friends, family and the community where they were raised to take a risk on a foreign place where they may not be welcome. 

But Angela Rivera made the leap with few regrets. She is still looking for a job as a house cleaner, but she has family nearby to help take care of her kids. And she's impressed so far with the schools.

“It all worked out,” she says.