A big slice of the $8.5 billion dollars in housing could hit Chicago's housing market, bringing in much needed funding to keep the city's housing stock decent and affordable.
Funding affordable housing is an essential step to improving the economy, says Kevin Jackson of the Chicago Rehab Network.
He says affordable housing helps the market in two ways - it creates jobs, and it helps strained family budgets. It's also where the whole problem with the economy began, he says.
"Affordability was the keystone of the economic crisis," says Jackson.
The money is spread between different housing initiatives - $4 billion to revamp public housing, $2 billion for project-based Section 8 contracts and $2.25 million to state affordable housing funds.
The money, Jackson says, is sorely needed in all areas, particularly public housing.
"The capital fund for public housing has been woefully lacking over the years," says Jackson.
That fund may need as much as $32 billion, says John Bohm of the National Association of Housing and Redevelopment Officials.
"Obviously much more is needed, but public housing is a vital asset," says Bohm. "If you take away the public housing, where will people go?"
The $4 billion for public housing improvements won't be for building new units as part of the Plan for Transformation, says Bohm. Instead, it will be used to rehab existing public housing, fixing leaking roofs or poor insulation, helping make these units better for residents and more energy efficient, he says.
Jackson's idea is to rehab Lathrop homes, a public housing development on the North Side.
"Lathrop homes has been in kind of a holding pattern," says Jackson. "There's some choices to be made. They have to decide."
Rehabbing makes a lot of sense, especially when the housing market is so volatile, says Professor Phil Nyden at Loyola University Chicago.
"Where you can make the existing housing not just liveable, but pleasant, it's a very efficient way of spending money," says Nyden.
Most of the money will be distributed through a HUD formula, which takes into account the size and need of public housing agencies nationwide. But $1 billion of the funds will be in a competitive program, allowing agencies to apply for projects in areas like energy improvements and public/private partnerships.
Chicago Housing Authority CEO, Lewis Jordan, has said that CHA will apply for the competitive funding.
"We're excited about the additional support that will be coming our way via the economic stimulus package that will be coming out of D.C.," Jordan said at yesterday's CHA Board of Trustees meeting.
The $2 billion for project-based Section 8 funding will help property owners who rent to low-income tenants keep up with their mortgages and make improvements on their properties.
"Tenants can breathe a sigh of relief," says Toby Halliday, vice president for policy at the National Housing Trust. "Owners know that they're not going to get caught in foreclosure."
Overall, the stimulus bill should help Chicago families be able to find good housing that they can afford or stay in the units they're already in.
"Our obvious priority is to help people who need housing, period," says Nyden. "There is a dramatic need right now."
Staff Writer Megan Cottrell covers public housing for the Daily News. She can be reached at 773-362-5002, ext. 12.