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Critical Decision Making: Designing Rental Subsidy Programs. NAEH 2006 Annual Conference Presentation by Betsy Benito Chicago Department of Housing. Innovative Housing Subsidy: Chicago Low Income Housing Trust Fund (CLIHTF). City-funded rental assistance program in operation since 1990

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Critical Decision Making: Designing Rental Subsidy Programs

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Critical Decision Making: Designing Rental Subsidy Programs

NAEH 2006 Annual Conference

Presentation by

Betsy Benito

Chicago Department of Housing

Innovative Housing Subsidy:Chicago 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

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 Chicago’s Plan

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

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 Chicago’s shelter system

  • The pending proposal attempts to serve singles and families through short and long-term rental support.

Summary of data and assumptions about Chicago’s 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 Chicago’s shelter beds are occupied by the same people throughout the year

  • 20% of sheltered homeless earn income from employment

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 don’t want to create an incentive to use shelter, so are also designing how the households would be selected

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

Next Steps and Timeline in Completing theDesign

  • 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

Contact Information

  • Betsy Benito, Projects Administrator, Chicago Department of Housing

    • 312-742-0633, 312-742-1397 (fax) [email protected]

  • Ellen Sahli, Mayor’s Liaison on Homelessness and Supportive Housing

    • 312-742-0594

    • [email protected]

More information on CLIHTF

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

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)

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 developer’s private mortgage

    • Savings used by developer to reduce rents of tenants below 30% of AMI

    • Examples: 2004, 66 units received ARC assistance

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