By BEVERLY ANN FLEMING

The poor and the public housing crisis

Public housing in Illinois has several severe problems. The number of poor, elderly and handicapped that are applying for space; the deteriorated condition of available housing; and the inflating costs of repair and maintainence. While some progress has been made, Illinois housing authority officials are hampered by still another problem: the lack of a coherent, acceptable master plan for public housing in Illinois

MORTGAGE rates are unbelievable; housing prices are astronomical. Discouraged middle-class couples looking for their first home have had to delay their purchase or scrape together down payments from savings, second jobs, loans and help from Mom and Dad. But as much as the middle class is hurting, its housing problems are not nearly as bad as those of the poor who rent.

With inflation, even those with moderate incomes sometimes need financial assistance for housing. This puts even more pressure on the poor, for now they must compete for spaces in what is called "assisted housing." This umbrella term covers all government-sponsored rental housing efforts, a maze of overlapping programs with confusing acronyms that may give anyone a migraine. Assisted housing includes: (1) housing either owned or leased by a public housing authority (commonly called public housing); (2) housing built with government financial assistance although privately owned; or (3) housing which has rents lowered through government subsidies, although the housing is privately owned.

Illinois has almost 154,000 units of assisted housing; over one-half is operated by local housing authorities using federal programs, and the remainder is built, owned and operated by private individuals or groups with government assistance through financing or rent subsidy programs.

Government involvement in assisted housing at the federal level involves the U.S. Department of Housing and Urban Development (HUD), which provides funds to urbanized areas, and the U.S. Department of Agriculture's Farmers Home Administration (FmHA), which funds projects in rural areas. At the state level, the Illinois Housing Development Authority (IHDA) provides some financing, and the new Department of Commerce and Community Affairs (DCCA) is charged with the administration of state housing laws. (When the Illinois Department of Local Government Affairs was dissolved, its housing function was transferred to DCCA.)

Illinois housing problems derive from the physical quality of housing and, more importantly, from the price of housing. Twenty-six percent of the households in Illinois are living in housing that is either physically inadequate or too costly, according to a 1979 DCCA report, County Household and Housing Profiles. Eight percent are living in housing that has no plumbing, no heat, no kitchen, or is overcrowded, and 18 percent are paying too much for housing.

The physical quality of Illinois housing has improved drastically since World War II: 33 percent of housing units were considered physically inadequate in 1950, and today only 8 percent are considered inadequate, although the definition of physically inadequate has changed since the fifties.

The problem of affordable housing falls heavily on renters. While 7 percent of all Illinois homeowners pay too much for housing, 40 percent of all renters pay too much, according to County Household and Housing Profiles. Generally, rent costs should not exceed 25 percent of total income, and a homeowner's cost should not exceed 35 percent of total income. And a disproportionate number of low income households are renters. Illinois' need for affordable housing is a need for assisted rental housing.

The need for assisted housing is usually discussed in terms of the housing needs of three demographic groups: the elderly, families and special populations such as the developmentally disabled or the physically handicapped. The elderly move into assisted housing only in the later years of their life when inflation and housing

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expenses have outstripped their fixed incomes. They do not usually move out until they die or become seriously ill. There is always a waiting list for elderly housing. For example, the Springfield Housing Authority operates five high-rise apartment buildings for the elderly with a total of 562 units, yet applicants can expect a wait of two years. The need for such housing is well known — everyone seems to have an elderly relative or neighbor living on a small fixed income.

Fortunately, the construction of housing for the elderly is welcomed with open arms by most communities, since the renters are generally neat, quiet and create little need for building maintenence. They also usually pay their rent on time.

On the other hand elderly housing projects do require special design features. Location is of prime importance, and various support services that encourage independent living must be incorporated in the project. The Federal Housing Act of 1968 included a restriction against the construction of high-rise elevator buildings for family public housing. The concentration of many families in a small space with little greenery or few playgrounds is not a good environment for children. But elderly housing still works well in elevator buildings. In a high-rise building the elderly have neighbors and companionship. The large number of occupants ensures the feasibility of constructing a building near commercial, medical and activity centers where land is often very expensive. Successful elderly housing must be adjacent or near such facilities.

The need for elderly housing will increase as our population becomes disproportionately older. Already in Illinois, 36 percent of the households that have serious housing problems are elderly households.

The need for assisted housing for the elderly is considerable, but the need for family housing is even greater. Although the percentage of elderly households living in inadequate housing is greater than the percentage of family households, there are more people in the family category since a family household obviously has two or more individuals while an elderly household is frequently only one person. There is a shortage of assisted rental units, but there is also a severe shortage of two, three and four-bedroom rental units for large families.

Family housing

Assisted housing for families is much more difficult to build — not so much because of physical problems, but because of attitudinal ones. Site selection is always "the impossible mission." No one wants family public housing built in their neighborhood. Vandalism, crime, maintenance, social, racial and building management problems are always worse in family projects than in elderly projects. The word "project" itself sets off alarm bells in the minds of many people, summoning up (often unfairly) images of broken windows, Jitter, street gangs and graffiti-covered walls. The current thinking in housing circles is that family housing should be small and located on scattered sites to eliminate the numerous social problems of concentrating many families in a small area. The St. Louis Pruitt-Igoes project of the 1960's is the classic example of the failure of such concentration; the project was demolished. Small projects also blend into the surrounding neighborhood more readily and are more easily accepted by the community. But a highly controversial study published by HUD in 1977, Residents' Satisfaction in HUD-Assisted Housing: Design and Management Factors, disputes many commonly accepted notions regarding public housing design.

A third group of assisted housing residents are the special populations such as the developmentally disabled and the physically handicapped. Approximately 8 percent of the state's present population is disabled. Not all of these individuals have housing problems, but their needs should be considered both in housing design and availability of social support services near their housing. Both HUD and FmHA now require that 10 percent of elderly housing built with federal funding must be accessible to the physically handicapped. While this requirement is admirable, individuals who are handicapped and under age 65 may not be happy isolated in elderly projects away from people of their age groups.

Publicly owned or public housing is only one kind of assisted housing; the two terms are not interchangeable. Public housing originated in the United States during the depression of the 1930's with the U.S. Housing Act of 1937. The intent, according to Lee Kriesgfeld, director of the St. Clair County Housing Authority, was a double objective: replacing slums with new low-income housing units and creating much-needed jobs in the construction industry. Public housing was to provide occupants a place to make a fresh start; public housing was to be a temporary home for people who would eventually hoist themselves up by their own bootstraps and move on to better housing. But during the 1960's, "temporary" housing became permanent housing for many families. Today, Kriesgfeld said, public housing is once again changing from a permanent home to a transitional living place for many residents.

The Illinois Housing Authorities Act of 1934 gave city or county governments with populations greater than 25,000 (the population requirement was lowered to 10,000 in 1976) the

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authority to establish local housing authorities for the purpose of building, operating and maintaining housing for low-income households. Most local housing authorities in Illinois were formed in the 40's, although authorities such as St. Clair County (1934), Chicago (1937), Champaign (1939) and Granite City (1939) were formed earlier. Today, Illinois has 125 local housing authorities; 94 are county and 31 are municipal. Authorities range greatly in size: Jasper County has 20 housing units and the city of Chicago has 40,074 units. Not all of these housing authorities currently operate housing, however. The most recent survey of local housing authorities, conducted in January 1979 by DCCA, identified 18 counties — mostly rural — in Illinois without local housing authority housing. Yet, according to Ed Lowe, housing manager of the Office of Housing and Community Development of the Illinois Department of Commerce and Community Affairs, there is no county without a need for assisted housing. Why particular counties do not build such housing is another question. Some of the need, however, is satisfied by housing built through IHDA or FmHA.

Local housing authorities in Illinois are extremely independent, nearly autonomous entities. By state law the Illinois Department of Commerce and Community Affairs (formerly the Department of Local Government Affairs) creates and dissolves local authorities at the request of local government and approves the choice of housing authority commissioners. In actuality, these responsibilities give the state very little control over local housing authority activities. DCCA has no funds to disperse among authorities — no carrots and a slender stick. DCCA does provide technical assistance for grant applications, the construction bidding process, etc., to housing authorities too small to support their own staffs. Thus DCCA can indirectly influence local housing authority policy. In short, except for technical assistance, housing authorities receive very little support from the state. The lack of financial backing from the state combined with the limited financial resources of local authorities is partially responsible for the small size of housing authority projects (projects average 20-25 units).

Each local housing authority is run by a five-member policymaking board of commissioners appointed by the local government's chief executive. The board in turn hires an executive director. In the past, these positions have often been filled through political patronage, and professionals have not always been appointed to the post of executive director. Recently, however, this situation has improved and professional public housing directors are more common.

When a local housing authority builds housing in a community, it signs a cooperation agreement with the community. The community agrees to provide the usual municipal services: fire and police protection, garbage collection, etc. Municipal property taxes are usually waived and the local housing authority offers the municipality a "payment in lieu of taxes," which is usually 10 percent of net rental payments from the project. It is important for local housing authorities to have a cooperative working relationship with municipal governments in their jurisdictions, especially a municipality's community development department. Housing authorities can use federal Community Development Block Grant funds to finance many of the social, recreation and employment programs provided to residents.

Residency requirements

Although residency requirements for public housing are illegal, cooperation agreements often include a provision giving preference points to citizens of the communities where the project is located, and residency usually determines who gets into a project. For example, Sangamon County does not have an active county housing authority, although Springfield, the major city in the county, does. Residents of Sangamon County who live outside of Springfield end up at the bottom of any waiting list for city housing projects. According to Henry Morris, director of the Springfield Housing Authority, in the past two years approximately 200 elderly persons living in Sangamon County outside of Springfield have been turned away.

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"sweat equity" by performing their own maintenance. • Leased Public Housing (generally known as Section 23) involves federal contributions to allow local housing authorities to lease units from private owners and sublease them to eligible low-income tenants. Section 23 has been superseded by the newer rent subsidy program, Section 8, and leased units may now be converted to that program. • Lower Income Rental Assistance (commonly known as Section 8) is a leased-housing subsidy program under which low-income tenants find their own apartments and sign the leases themselves. HUD provides annual contributions to local housing authorities to pay the difference between what a low-income household can afford and the fair market rent (determined by HUD) for a unit of appropriate size which meets HUD's quality standards. Eligible families are issued certificates of participation which they can use to find housing in the private market. Already existing units of housing, which are defined as Existing Section 8, are inspected by the local housing authority and the authority contracts with the owner to pay the share of the rent beyond what the eligible low-income tenant pays. New Construction or Substantially Rehabilitated Section 8 projects can be proposed by local housing authorities or by nonprofit or profit-motivated developers. HUD then contracts with the developer to subsidize units in the approved projects. HUD sets aside a certain number of Section 8 units each year which can be used only in rural areas. They are administered by FmHA. The Illinois Housing Development Authority also has its own allocation of Section 8 units to be distributed in conjunction with its projects. • Under the Multifamily Rental Housing for Low and Moderate Income Families (commonly known as Section 221 (d) (3) and (4)), HUD insures mortgages to finance the construction or substantial rehabilitation of multifamily (five or more units) rental or cooperative housing for low- and moderate-income or displaced families. Section 221 (d) (3) mortgages may be obtained by public agencies; nonprofit, limited-dividend or cooperative organizations; private builders or investors who sell completed projects to such organizations. Section 221 (d) (4) mortgages are limited to profit-motivated sponsors. Units financed under the two programs qualify for Section 8 rent subsidies if occupied by eligible low-income families. However, tenant occupancy is not restricted by income limits. • Under the Mortgage Insurance of Housing for the Elderly program, HUD insures mortgages to build or rehabilitate multifamily projects (eight or more units suited to the needs of the elderly or the handicapped). FmHA • The Rural Rental Housing Program (commonly known as the 515 Program) provides loans to build, purchase or repair multifamily housing for persons with low and moderate incomes and for the elderly. • The Rural Rental Assistance Program is similiar to HUD's Section 8 program. Low-income rural families or the elderly who live in FmHA-financed housing projects pay monthly rents that are not greater than 25 percent of their adjusted annual income. The Rental Assistance Program cannot be used in a new construction project that is using HUD Section 8 funds. It can be used in existing rental units that are receiving Section 8 subsidies. Source: The above information was compiled from the program literature of the Illinois Association of Redevelopment Authorities, Farmers Home Administration and the U.S. Department of Housing and Urban Development.

In 1976, the question of community control over county housing authority projects caused the lowering of the minimum population at which a community could establish its own housing authority from 25,000 to 10,000. Mount Vernon, which has a population of 16,518, is one example of a community that took advantage of this change to establish a housing authority — separate from the existing county authority. The change in the population threshold raised the question of who should control already existing county-built projects within the jurisdiction of a newly formed municipal housing authority. State law is clear on the question. It says that a newly formed municipal housing authority can take over the indebtedness and bonds of a previously built county housing authority project that is located within a municipality's boundaries. The law has never been tested in court, however, and HUD has actively discouraged new authorities from trying to take over county projects. Unlike other states, Illinois has set up local rather than regional housing authorities. Under the 10,000-plus population requirement, approximately 70 communities could establish local authorities in addition to the 102 county authorities. But a large number of small housing authorities requiring duplication of staff and operational costs may not be the most efficient way to provide low-income housing. Small communities may find the complexity of operating public housing beyond their expertise and financial resources. Several of the state's already existing housing authorities are inactive due to a lack of interest on the part of citizens within the authority's jurisdiction. Ed Lowe feels that the 25,000-plus population requirement is preferable to the present 10,000 and said DCCA will press for such legislation next year.

The local housing authority can employ one or all of four HUD programs to provide assisted housing (see box). They can build their own housing through HUD's Conventional Public Housing Program; they can buy housing built by private developers under the Turnkey Public Housing Program; or they can lease housing rather than buy it under the Leased Housing Program (commonly referred to as Section 23), or the Lower Income Rental Assistance Program (known as Section 8).

In addition to the HUD programs noted above, most local housing authorities in Illinois receive additional funding through HUD's Public Housing Modernization Program and the Public Housing Operating Subsidies Program. Illinois has some of the oldest public housing in the nation. Much of the housing that was built in the late 30's needs major repairs. Under the public housing modernization program, HUD provides funding to finance capital improvements in public housing projects. Since the program began in 1968, $200 million has been spent on improvements in Illinois. For example, the 599 units of housing in the John Hay project in Springfield were built in 1939. The project's interior wiring was unable to handle today's appliances and was continually overloading. In 1979, using funds from the modernization program, the Springfield Housing Authority spent $1.2 million to replace the interior

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wiring. Modernization funds have also financed new roofs for the project. Further work is still needed, but this year's funding prospects do not look bright. HUD has cut modernization funds nationwide by 40 percent. Illinois will have only $13 million to spend among 55 housing authorities which have identified a total of $200 million in repairs. The funds saved by the 40 percent cut will go towards financing energy conservation in public housing.

Authorities must comply with a tangle of HUD regulations and federal statutes

Under the Public Housing Operating Subsidy Program, HUD provides operating subsidies to retain minimum operating reserves and to offset operating deficits. When a local housing authority is created, an operating reserve fund is established. Until 1975, all local housing authorities in Illinois operated with healthy reserves (HUD considers 20 percent or more to be healthy.) Today, however, 16 Illinois authorities are operating with less than 20 percent of their reserve funds. The Chicago Housing Authority has operated at a deficit for the last three years, and a rent strike during 1969-72 almost bankrupted the East St. Louis Housing Authority. But for most Illinois housing authorities the problem is inflation. Rapidly escalating costs, especially for utilities, have outstripped the income from rents. Residents pay no more than 25 percent of their income for rent. When a housing authority has an average monthly rent of $70 and an average monthly operating cost of $125 per unit — suffice to say that some authorities are in financial trouble.

HUD funding does not come with ''no strings attached.'' Authorities must comply with a tangle of HUD regulations and federal statutes. In addition to providing technical assistance to authorities, the Assisted Housing Management Branch of each HUD area office conducts reviews of local housing authority budgets and management practices. An occupancy audit is done every two years to determine if a local authority is adhering to its tenant selection policy.

In 1975 HUD revised its tenant selection policy. In the past residents of public housing were often some of Illinois' poorest citizens. HUD now wants local authorities to encourage the "sorta poor" as opposed to the "desperately poor" to live in assisted housing. Although 20 percent of the units of any housing authority must be reserved for the "desperately poor," HUD expects local housing authorities to give the "sorta poor" extra preference points in its tenant selection policy. This will enable HUD to pay less in subsidy, because "sorta poor" residents can pay more for rent than their "desperately poor" neighbors. Another intended benefit is a decrease in social problems, which have been a problem in projects with only the very poor as residents. With the mix of income groups, it is hoped there will be fewer problems. But the effect of the revised policy is displacement of the very poor by households which are slightly better off. Housing authorities in Illinois have been slow to comply with this policy and have questioned its justification.

Another HUD policy causing difficulty for local housing authorities in Illinois is the requirement that assisted housing projects not be racially indentifiable, that is, they should be integrated. Although this policy is laudable, implementing it is difficult for authorities which serve a population that is predominantly comprised of one racial group. Yet, local housing authorities have little choice but to comply with HUD policy. Flouting regulations will only result in the loss of subsidies that local authorities desperately need.

Local housing authorities are charged only with providing housing. However, most authorities recognize the importance of social services, health services, recreational activities and educational and employment opportunities in the lives of their residents. They encourage such activities in conjunction with their housing. These activities are usually operated in the project by community service organizations in space allocated by the housing authority. For example, the St. Clair County Housing Authority has provided a house for use as a shelter for batterwed wives. The Springfield Housing Authority hired 45 people (residents of the authority's projects had priority) through the federal Comprehensive Employment and Training Act Program (CETA) to do maintenance, security, and recreation work. Most elderly housing projects are served by numerous support services such as meals-on-wheels, transportation and public health nurse visits.

One of the most innovative examples of a local housing authority working in conjunction with a local social service agency is in Bloomington. Recognizing that the housing needs of the developmentally disabled have been generally ignored by local housing authorities, the Bloomington Housing Authority is proposing construction of housing earmarked for both the developmentally disabled and the physically handicapped. The housing will be built under the conventional public housing program with the housing authority acting only as landlord. The McLean County Association for Retarded Citizens (MARC) will provide support services for residents. This innovative project is especially important to Illinois as a demonstration project because the Illinois Department of Mental Health and Developmental Disabilities has set a goal of moving almost 2,000 individuals now residing in institutions into small community facilities by 1983.

Public housing is one solution to the need for assisted housing and in some communities (East St. Louis, for example), public housing is the best housing in town. But another alternative is assisted housing which is built, owned and operated by the private sector. The programs and benefits of private sector rental housing for the poor will be discussed next month.

[This is the fifth in a series of articles on Illinois housing problems. Supported by a grant from the Ford Foundation, this article examines the frustrations faced in public housing. The sixth article will discuss private sector assisted rental housing. — Editor]

Beverly Ann Fleming holds a master's degree in urban planning from the University of Illinois at Urbana-Champaign. She is a research associate at the Center for Policy Studies and Program Evaluation, Sangamon State University.

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