The internal watchdog of the U.S. Department of Housing and Urban Development is launching an investigation of a Chicago Housing Authority program that pays market-rate rents for poor people to live in some of the city’s most expensive apartment buildings.
HUD Inspector General David Montoya is conducting an audit of the CHA’s use of federally funded housing vouchers to subsidize low-income residents in high-end buildings, according to a Capitol Hill source. Critics of the so-called supervoucher program say it’s a waste of tax dollars and rewards a few lucky tenants at the expense of more than 15,000 people on the CHA’s voucher waiting list.
U.S. Rep. Aaron Schock, R-Ill., requested that the inspector general open a probe last week, after Crain’s published a report about the voucher program, saying he was concerned that it created “ripe opportunities for waste, fraud and abuse of taxpayer money.”
“Congressman Schock had a productive conversation with the HUD Inspector General late last week regarding his referral of the supervoucher program for investigation,” Benjamin Cole, a senior adviser to Mr. Schock, wrote in an email. “Based on his conversation, Congressman Schock is assured that the Chicago Housing Authority will receive the scrutiny warranted by this wasteful program, and he is confident that the HUD IG will pursue the investigation with the meticulous integrity that has distinguished his career as a federal watchdog.”
A spokeswoman for the inspector general said, “We don’t comment on investigations or audits.”
The CHA has not been informed of an audit by Mr. Montoya but will cooperate with inquiries related to its use of housing vouchers, a CHA spokeswoman wrote in an email.
The program is part of the CHA’s push to help families who need housing assistance move out of poor, crime-ridden neighborhoods and into designated “opportunity areas” with low poverty rates, good schools and access to jobs.
“We are confident that we can demonstrate that CHA strikes a balance of expanding housing choices for low-income families to include communities throughout the City and that we have an on-going evaluation process to make any necessary adjustments in our program,” the CHA spokeswoman wrote. “One of our goals is to provide our residents with access to Opportunity Areas that helps them along their road toward self-sufficiency and increases their potential for long-term economic success.”
Under the “housing choice voucher” program, which is federally funded but run by local agencies like the CHA, an eligible resident can rent an apartment in a privately owned building. Though HUD caps the amount a local housing authority can pay a landlord at 110 percent of an area’s fair market rent — $826 a month for a one-bedroom apartment in Cook County — CHA has the latitude to approve “exception payments” that push the cap up to 300 percent in opportunity areas. For instance, the program is paying for four people to live in the year-old high-rise at 500 N. Lake Shore Drive, where rents for a one-bedroom apartment approach $3,000 a month.
The CHA says that the “exception payments” for high-cost apartments account for less than 2 percent of the authority’s roughly 38,000 outstanding vouchers. The number of supervouchers has increased in the past two years. The authority approved 364 in the first half of this year, up from 291 for all of 2013, 44 in 2012 and seven in 2011. Eighty-seven payments exceeded 200 percent of HUD’s fair market rent in the first six months of the year, versus 49 for 2013 overall, according to the authority.
Eleven leases hit the 300 percent cap in the first six months of 2014, up from three for last year, according to the CHA. High-end apartment buildings with the highest voucher payments included 500 N. Lake Shore Drive, Aqua Tower in Lakeshore East and the Streeter in Streeterville