Critical Decision Making: Designing Rental Subsidy Programs

1
Critical Decision Making Designing Rental
Subsidy Programs

• NAEH 2006 Annual Conference
• Presentation by
• Betsy Benito
• Chicago Department of Housing

2
Innovative Housing SubsidyChicago Low Income
Housing Trust Fund (CLIHTF)

• City-funded rental assistance program in
  operation since 1990
• Land-lord based program provides grants to
  landlords to write down the rents for households
  below 30 AMI
• CLIHTF currently targets special needs
  populations through small-scale programs
  Families First, Street to Home, HUD SHP including
  Chronic Homeless Initiative

3
Major Victory CLIHTF will double its capacity in
2006

• State legislation passed/signed in 2005 adding a
  10 surcharge on real estate recording fees
• New fee will generate 13 million or 2,000 rental
  subsidies for Chicago (doubling the number of
  households served)
• Half of these new resources will be earmarked for
  Chicagos Plan

4
Challenge and Opportunity Re Designing the
CLIHTF

• Goal is to design newly allocated resources to
  make meaningful progress in our Plan to End
  Homelessness
• Opportunity exciting new resources with very
  few restrictions going to an existing, successful
  rental subsidy program
• Challenge deciding the best use of the
  resources amidst competing sub-populations

5
Pending Proposal with the Trust Fund for Use of
New Resources

• Current proposal developed by the Department of
  Housing and Department of Human Service seeks to
  meet the projected permanent housing resources
  needed to achieve the Plan
• Permanent housing projections are driven by both
  data and assumptions on the use of Chicagos
  shelter system
• The pending proposal attempts to serve singles
  and families through short and long-term rental
  support.

6
Summary of data and assumptions about Chicagos
homeless system

• 48 of sheltered homeless are disabled as defined
  by HUD (90 single, 10 family)
• 15 of sheltered homeless exit to unsubsidized,
  private market housing
• 37 need short term rental subsidy
• 70 of Chicagos shelter beds are occupied by the
  same people throughout the year
• 20 of sheltered homeless earn income from
  employment

7
Summary of DOH-DHS Pending Proposal

• 80 of the resources to be used as long-term
  rental subsidy (traditional CLIHTF)
• 90 to singles (with set aside for chronically
  homeless, ex-offenders, other disabled)
• 10 to families (priorities being considered for
  large families, Axis I and Axis II disabilities)
• 20 of the resources to be used as short-term
  rental subsidy which would require a CLIHTF
  policy shift
• For singles and families that may be
  non-disabled, current or recent attachment to the
  workforce, small families, etc.
• We dont want to create an incentive to use
  shelter, so are also designing how the households
  would be selected

8
Related Challenges the need and funding of
services

• Community advocates are pushing for new funding
  of supportive services for the homeless-dedicated
  CLIHTF subsidies
• Question what is already being paid for in the
  system (city or federal funding) that would now
  serve people in housing versus shelter?
• We need to understand better the service needs of
  our target populations, existing resources, and
  how to allocate new resources

9
Next Steps and Timeline in Completing the Design

• Get the Trust Fund to finalize its commitment and
  approve the DOH/DHS proposal
• Identify existing service slots already funded
  to support households in permanent housing
• Implement a tenant selection process to support
  the design
• Funds are expected to be available no earlier
  than October 2006
• May take six months to fully allocate/commit
  resources

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Contact Information

• Betsy Benito, Projects Administrator, Chicago
  Department of Housing
• 312-742-0633, 312-742-1397 (fax)
  elizabeth.benito_at_cityofchicago.org
• Ellen Sahli, Mayors Liaison on Homelessness and
  Supportive Housing
• 312-742-0594
• esahli_at_cityofchicago.org

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More information on CLIHTF
12
Chicago Low Income Housing Trust Fund Background

• Established by City Council ordinance in 1989
• Incorporated as a non-profit organization in 1990
• 15-member Board, appointed by the Mayor
• Staff and administration provided by the Chicago
  Department of Housing
• Annual budget is 13 million (54 from City
  Corporate funds)
• Budget expected to nearly double in 2006

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Trust Fund Targets Very Low Income Chicagoans

• Program targeted to households at or below 30 of
  Area Median Income (22,600)
• By ordinance, at least half of the Trust Fund
  resources must be used for families between 0-15
  of AMI
• 2,000 very low-income households are assisted
  annually
• Over 25,000 households have been assisted since
  1990 (includes duplication)

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Trust Fund Programs

• Rental Subsidy Program
• Major program 54 of funds
• Corporate funds
• Affordable Rents for Chicago (ARC)
• Interest free, forgivable loans to replace up to
  50 of a developers private mortgage
• Savings used by developer to reduce rents of
  tenants below 30 of AMI
• Examples 2004, 66 units received ARC assistance