PI Original Ellyn Fortino Tuesday August 5th, 2014, 2:58pm

Report: CHA Failed To Spend Millions In Federal Housing Voucher Money (VIDEO)

Over recent years, the Chicago Housing Authority has built up large cash reserves primarily by holding onto millions in federal funds intended for housing vouchers, shows a recent report by the Center for Tax and Budget Accountability. Progress Illinois takes a look at the report's findings and gets reaction from affordable housing advocates.

Over recent years, the Chicago Housing Authority (CHA) has built up large cash reserves primarily by holding onto millions in federal funds intended for housing vouchers, shows a recent report by the Center for Tax and Budget Accountability (CTBA).

Each year between 2008 and 2012, the CHA issued an average of 13,534 fewer housing vouchers than the U.S. Department of Housing and Urban Development (HUD) funded, according to the center's analysis released last Wednesday. The CHA has saved an average of $90 million annually between 2004 and 2012 by withholding vouchers. And those savings have bolstered the CHA's reserves, which stood at $432 million at the end of fiscal year 2012, the report shows.

Meanwhile, there were some 33,000 families waiting for CHA voucher assistance as of September of 2013, according to the think tank's report. Currently, there are reportedly more than 15,000 households on the CHA's voucher wait list.

"The CHA is hoarding our tax dollars, while there's thousands of homeless people in need of homes," Liz Brake with the Jane Addams Senior Caucus said at a news conference last week at City Hall to highlight the CTBA's findings. 

Updated figures from the Chicago Coalition for the Homeless show there are more than 138,000 homeless people in the city. 

"Considering that number, and considering that the estimate is more than 13,000 vouchers have been held back over these last few years, it's just a total mismatch between what the needs are of the people in the city of Chicago, what the needs of homeless people are in the city and the priorities of the CHA," said Eithne McMenamin, associate director of policy at the Chicago Coalition for the Homeless. "It's hard to understand what the [CHA's] priorities are, if not housing the most vulnerable people, and so it's distressing."

A HUD spokesman told the Chicago Tribune that the federal housing agency has "prompted CHA to issue more vouchers" since learning "of the level of the reserves."

A CHA spokesperson could not be reached for comment. But in an interview with the Chicago Tribune, a CHA representative said the agency's current reserves total $355 million.

"Not to defend the CHA, but I assume their rationale in building up these reserves is that they haven't been able to complete the Plan for Transformation, and their trying to save up money to do so," said Housing Action Illinois' Policy Director Bob Palmer. "Where, really, if they're more committed to their core mission of serving the housing needs where the need is the greatest, it would be putting these vouchers out on the street."

The Plan for Transformation was a massive undertaking launched in 2000 to relocate public housing residents in the city to mixed-income housing units. (Read our previous coverage on the PLan for Transformation here.)

The CHA spokesperson, meanwhile, told the Tribune that 3,000 people on the agency's closed waiting list will be given housing choice vouchers this year. In all, CHA says 40,679 vouchers will be issued in 2014. 

"I think we really need to ... collect more data and look at the numbers more carefully before we say the CHA is moving in the right direction," Palmer said of the CHA's voucher figures. "There's always people leaving the voucher program and CHA is getting vouchers returned. If they're putting out 3,000 more vouchers, but somewhere else they are taking 3,000 more vouchers out of circulation, that's not a net increase."

The CHA gets most of its funding from HUD. The purpose of the federal funding is to cover CHA's costs associated with providing housing assistance, such as public housing units and housing vouchers, which help cover the cost of private units.

Because the CHA is part of the federal Moving to Work (MTW) program, the housing agency has less HUD oversight and is afforded flexibility in terms of how it uses federal dollars.

Under the program, for example, the CHA is not required to segregate MTW funds in different accounts designated for things like public housing, capital construction and housing vouchers.

As such, the CHA is able to "commingle all federal funding received under the MTW program into a single General Fund," the CTBA's report reads. "The CHA can spend the money in its General Fund at its discretion. This allows the CHA to divert federal funding ostensibly received to support the issuance of housing vouchers, for example, to other programs."

CHA appears to have moved federal revenue from its voucher program to line-items that do not constitute actual spending, referred to as non-cash outlays, the CTBA's analysis shows.  

"Unfortunately, everything they're doing is legal and allowed by the program, but it's just very misguided," Palmer said.

The CHA's current MTW work agreement is not permanent. It expires in 2018 and will need to be reauthorized. 

"Whatever flexibilities [are] allowed under a new agreement, if there is one, should be tied to ... using more of their vouchers, and that the Plan for Transformation be focused more on creating more public housing units, and not so much on market-rate units," Palmer said. 

Kina Ward, a single mother of four, has applied for CHA housing assistance on multiple occasions since 2005, but has been denied, she said.

"It saddens me that families that could have adequate housing are denied that right, and no one's being held accountable," she said at last week's City Hall news conference. "Something needs to be done about the way in which CHA operates."

Ward and other Chicago Housing Initiative coalition members are pushing for an ordinance that would provide the Chicago City Council with greater oversight of the CHA.

Members of the Chicago Housing Initiative plan to work with others — including some aldermen — to introduce the coalition's "Keeping the Promise" ordinance within the next 90 days. The group had a meeting last week to discuss the proposal with the mayor's office. 

Under the Chicago Housing Initiative's proposed ordinance, the CHA would have to provide the council with quarterly reports on, among other things, vacant and offline housing, its voucher utilization rate and progress building replacement public housing.

Here's Lori Williams, a former resident of the now demolished Harold Ickes Homes, explaining the importance of the coalition's Keeping the Promise proposal:

The Chicago Coalition for the Homeless' McMenamin is glad to see people organizing around the issues raised in the CTBA's report.

"It's a story ... and it needs to be talked about publicly," she continued. "The feeling (that) dealing with CHA is a bit like a brick wall is real. There's been a lot of frustration in the affordable housing community around the responsiveness of the CHA around these kinds of issues, and that's a problem." 

McMenamin believes the report will prompt some change within the CHA.

But, she added, "The scope and the extent of it remains to be seen."

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