HUD RELEASES STUDY SHOWING SHORTAGE OF AFFORDABLE HOUSING IN CHICAGO AREA RENTAL MARKET; UNITS DOWN, RENTS UP

WASHINGTON - The U.S. Department of Housing and Urban Development today released a study confirming a shortage of affordable rental housing in the Chicago area.

The study, funded primarily by HUD, is called For Rent: Housing Options in the Chicago Region. The comprehensive rental market analysis was conducted by the University of Illinois at Chicago and managed by the Metropolitan Planning Council of Chicago.

The study found that the number of rental units in the Chicago area has actually decreased by 4.6% (52,000 units) since 1990, while the region's population has grown by almost 8% (500,000 people). As a result, rents have increased by almost 20% since 1995, compared with an overall Consumer Price Index increase of 11% for the same period.

The overall vacancy rate for private rental housing in the Chicago region is 4.2%. However, the study predicts an increase in the number of rental units and the vacancy rate by 2004. Overall, Chicago is adding rental housing more slowly than other Midwest cities, and housing developers report significant local barriers to accelerating the expansion of the supply of rental housing.

"The study confirms that the rental market in Chicago is among the tightest in the nation, and that the challenge of relocating displaced Chicago Housing Authority families cannot be minimized," said HUD Assistant Secretary for Public and Indian Housing Harold Lucas. "The findings will be taken into account as HUD reviews the CHA demolition plan with local officials and tenants."

The release of the study follows HUD's establishment of a statement of principles intended to respond to CHA residents' concerns about dislocation when the City continues the demolition of CHA public housing that is required by HUD.

In a November 15 letter to the CHA and the Chicago congressional delegation, Lucas stated: "HUD cannot approve a plan in which the CHA will displace more families than the housing market can accommodate."

While the study released today indicates that the rental market is projected to be able to absorb a number of additional displaced families through the Section 8 rental assistance program, successful relocation will require constant balancing of the number of units demolished, the number of Section 8 rental assistance vouchers issued, and the number of available units.

HUD will follow up the new study with annual market studies to ensure that the number of displaced families in any year does not exceed the number of units available to Section 8 voucher holders.

Landlord attitudes about renting to Section 8 tenants were also examined by the study, as were tenant views about relocation. Landlords in focus groups expressed their view that, in a tight rental market, they can be more selective, screening out tenants they deem "undesirable."

CHA families expressed widespread confusion and anxiety about CHA redevelopment plans, the study found. Families also reported instances of discrimination based on race, family size, and based on their status public housing residents when searching for apartments. Other barriers reported include the cost of security deposits, credit checks, and transportation expenses.

Content Archived: January 20, 2009