Since 2009, the city of Chicago has received $169 million from the Neighborhood Stabilization Program, a federal effort to help state and local governments ease urban blight by redeveloping foreclosed properties. Chicago has spent $140 million of that money demolishing and rehabbing homes—but not the homes you might expect.
Writing in the Chicago Reporter, Angela Caputo notes that
Neighborhood Stabilization Program
in the city's poorest neighborhoods, where vacant homes can be bought for the price of a car, the hope was that [the funds] would go a long way.
But records obtained through the Freedom of Information Act show the city spent money on buildings with luxury finishes in gentrifying areas while distressed properties in some of the city's hardest hit neighborhoods were left to languish. In their grant proposal to the U.S. Department of Housing and Urban Development, city officials pledged to rehab 2,800 units, a combination of apartments, condos and single-family homes. Less than one-third were completed.
Among other details, Caputo reports that the rehabilitation of a single house in gentrifying Albany Park—complete with federally funded granite counter tops and stainless steel appliances—received more money than all of Roseland, a low-income neighborhood hit especially hard by the foreclosure crisis. (The home sold for $187,000. Rehabbing it cost $594,359.) Noting that the program funneled funds through the state government as well, she observes that it "cost an average of $65,000 more to rehab a single-family home or two-flat when it was done through the city."
So Chicago officials spent more money than was necessary to rehab fewer properties than they promised, with much of the benefit going to communities that needed help the least. Ladies and gentlemen, your government in action.
