Seniors Protest Rent Rise

by  Editor-in-Chief

Michael Green has lived in a one-bedroom apartment in a Chicago Housing Authority building at 1531 N. Sheridan Avenue on the North Side for the past 14 years. The 55-year-old used to receive disability aid but he now works at a hospital. He wants to own a condominium of his own but says that dream will now be more difficult to achieve. The reason: CHA raised his rent by $415, from $322 to $737 a month.

“If they hadn’t went up on me … my next step would have been in a condo,” Green said. “I was setting my sights on a condo. But now they’ve hindered me from doing that.”

Green’s rent rose due to a rent policy change the housing authority implemented in 2006. CHA now demands residents decide whether their rent will be a “flat-rate rent” based on market rates or an “income-based rent” calculated according to family income.

At the March CHA board meeting, residents said the rent changes are making it harder for residents to move toward self-sufficiency, a big part of CHA’s $1.6 billion Plan for Transformation.

Gone is the “ceiling rent,” a cap on how much a resident would have to pay for their unit. The changes are angering many residents and their leaders, forcing some, as Green put it, “between a rock and a hard place.”

How Rents are Calculated
According to CHA, income-based rent is equal to 30 percent of a family’s income. All income is calculated for the leaseholder and those legally living with them, including everything from interest earned on savings accounts to income generated from work or welfare. Some people get deductions for dependents, child care and education costs and a utility allowance.

Flat rent is based on market rates for comparable units in the private market, and factors such as location, quality, unit and bedroom size, age of unit, amenities, housing services, maintenance and utilities provided by CHA. It was established as part of the Quality Housing and Work Responsibility Act of 1998.

Public housing residents who formerly were protected by “ceiling rent” policy must now choose between the two rent options, and they will bear the brunt of the changes, including rent increases.

Property management companies calculate the income-based rent, but CHA calculates the flat rate rents.

The ceiling rent policy dates to 1990. At the time, advocates wanted a ceiling rent because they said it would allow residents to save money, and eventually move out of CHA buildings. The 1990 policy consisted of a two-tiered rent schedule.

Schedule 1 based rents on the size of units and a HUD formula. CHA applied this schedule to residents living in existing CHA buildings.

Schedule 2 applied to residents living in new or replacement housing, or rehabbed units. CHA based rents for these residents by determining the Fair Market Rent for the neighborhood where these units were located.

For example, a family who earned $40,000, lived in a North Central Scattered Sites public housing unit, and fell under Schedule I rent paid no more than $510 for a three-bedroom apartment under the old policy. A North Central Scattered Sites public housing resident paying Schedule II rent paid no more than $756 for their three-bedroom apartment, according CHA’s Ceiling Rent Policy.

Senior Concerns
Isn’t this the city that’s supposed to love seniors?” Lena Horn, a Senior North LAC representative from Sheridan Apartments, declared to members of the CHA Board of Commissioners during a March 2007 meeting. Horn and others at the meeting were upset about the rent policy changes

“Seniors are against the abolishment of ceiling rents. What will happen to the seniors if after a lifetime they cannot live comfortably in a CHA development? Who ordered this?” Horn demanded from the commissioners, who failed to respond.

The residents didn’t get any answers to their questions that day.

Amanda Leonard, Senior Central LAC representative, said the new rents will be hard on seniors who aren’t working, whose savings will be quickly depleted because of the removal of ceiling rents.

“I would like for you to reconsider the ceiling rent. What happens to the seniors who are no longer working? Give old people a break,” Leonard said to the commissoners, who sat silently.

Lee Michael, a LAC senior representative for the central part of the city and a resident of Patrick Sullivan Senior Apartments, thought the rent increase for seniors on pensions would deprive them of a comfortable lifestyle in their retirement years.

“Our concern is the abandonment of the ceiling rent, and charging the elderly people that worked all of their lives to retire and maybe travel a little or just enjoy themselves better than when they were working. Now they’re paying three, four, five hundred dollars more than they paid before because of the ceiling rent loss, which takes money right from their pocket,” Michael proclaimed. “It’s money that they have worked hard for all of their lives, sometimes going through things that are degrading.”

Hank Brown, the Lathrop Homes building president and a senior himself, wanted CHA officials to define the issue of market rents and how it would affect residents in his development. But his questions fell on deaf ears.

“Who is looking out for seniors who have made their contributions to society, and therefore perfectly earn the right to live in CHA housing?” Browne asked. “Who has looked into the fairness into these so-called market rents?”

Working Residents
Many working residents, including seniors and employees of Residents’ Journal, have already experienced a drastic increased rent.

Green, the resident at 1531 N. Sheridan, said in an interview the rent increase means all of one of his two paychecks each month pays for his new rent.

“With the other, I have to pay my two, three bills. Light, phone bill, car note. Now, it’s just like if I move out from here, I’m jumping out the skillet into the fire. What more you’re giving me for that money? Because I live in an area, it costs me more money? Suppose something happened to my job?” Green said.

Green questioned whether the rent changes were legal. He also wanted to know why CHA and Mayor Richard M. Daley were allowing the situation to occur. “Is that legal for CHA to charge more money for the area market rent?…They just hit us with that big rent in a matter of months. It’s just no feelings. No compassion,” Green said.

Green, who added he felt fortunate to live in public housing, concluded the interview by saying private management companies or private landlords of luxury apartments, like those in the Gold Coast, do not drastically raise the rent of their tenants from one month to the next.

To date, private market landlords have a set rental price for their apartments. The apartment is rented out solely on whether the person can afford and continue to pay the set-priced rent. The units are not based an a person’s income unless the landlord is involved in the federally-funded Housing Voucher Program, also known as Section 8.

CHA Defends Abolishing Ceiling Rents
Instead of directly addressing each question raised about ceiling rents at the March board meeting, CHA officials provided a written reponse with background information about the establishment of ceiling rents and an explanation for their elimination.

“Ceiling rent was the rent that the CHA previously offered that was last adjusted in 1998 and below the current area market rate prices. In October 2002, HUD mandated that all ceiling rents be adjusted to the level of flat rents.

Therefore, the CHA no longer offers ceiling rents. The rent choices are income-based rent or flat rent,” read a CHA information sheet given out at the agency’s April meeting near the Henry Horner public housing complex.

“Flat rent was established to encourage self-sufficiency and to avoid creating disincentives for continued occupancy of families that are self-sufficient or becoming self sufficient. As these families experienced an increase in their incomes, their income-based rents were exceeding the market-rate rents for their neighbors. Thus, flat rent alleviated the rent burden for these self-sufficient families,” the statement added.

The April document also stated that “flat rent affects less than two percent of the CHA’s public housing population [approximately 73] families. Of those, 38 selected the flat rent option, meaning that the income was high enough to make the flat rent a better option than income-based rent. Of the CHA’s public housing residents, 89 percent pay income-based rent, ten percent pay the minimum of $50 and just less than one percent pay flat rent. The majority of the CHA’s public housing residents make less than $20,000 a year, making many of their rent payments less than most ceiling rents.”

RJ attempted several times over the course of almost two months time to get an detailed written example of how CHA calculates the flat rate rents for the various areas where their public housing stock is located across the city.

CHA spokesperson Bryan Zises assured RJ during an April 25 phone interview that he would provide an example of how CHA calcuated the flat rate rents.

But CHA failed to provide the requested methodology by RJ’s press time.

HUD’s Stance
Ann Scherrieb, a spokesperson for the U.S. Department of Housing and Urban Development in Chicago, told RJ this past March the federal agency only encouraged the removal of the ceiling rents to help offset operation costs.

“HUD didn’t choose to remove it. The CHA has the right to remove it, and certainly in order to stay solvent they need to take whatever steps are available to them in order to ensure that they have sufficient monies to maintain the buildings, and the services and that kind of thing,” she said.

Scherrieb added that people should move out of public housing if they have “disposable income” and can afford to “whether you’re young or old” regardless of their overall cirucumstances.

“It’s just a matter of fairness. I imagine there are people who are living in CHA who once upon a time were on welfare. They got a job, they might’ve married, but their income has gone up. And yes, to have disposable income at the end of the month is ideal. But not at the expense of people who can’t even afford what they have,” Scherrieb said.

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