WHAT HAPPENS WHEN HUD KNOCKS;PAST TAKEOVERS OFFER CHICAGO HOPE, HORRORS
If the federal Department of Housing and Urban Development is the answer to Chicago's public housing woes, you have to wonder what the question was.
Beyond serving as a catalyst for change, the Department of Housing and Urban Development (HUD) is still developing a specific strategy for revamping the Chicago Housing Authority (CHA), one week after abruptly assuming control of the troubled agency.
What's far from clear is whether HUD's promise of privatization and improved management will make a dent in Chicago's intractable problems, when for at least a decade the most pressing need has been to demolish CHA's distressed high-rises and entrenched bureaucracy.
"It will be even more difficult for a federal agency to do it," says Greg Byrne, head of public housing in the Miami area and a former assistant to ex-CHA Chairman Vincent Lane. "People will be screaming, 'Who are you to say what we should do?'"
Last week in Chicago, HUD Secretary Henry Cisneros called on the city's public and private sectors to work together with the government to solve the CHA's problems, a point echoed by the deputy he put in charge of the situation.
"The most important thing is to have local buy-in" to the process, says Joseph Shuldiner, a HUD assistant secretary who will head CHA's new executive board, at least temporarily. Without local cooperation, especially from residents, "we will fail and it doesn't matter what we're going to do."
There's no formula or precedent for what happens when local public housing efforts are taken over by the federal government, or the courts, for that matter.
"There isn't one-answer-fits-all," Mr. Shuldiner admits.
And when it comes to the CHA-by far the largest dysfunctional housing agency in the country-all bets are off. Chicago's 41,000 public housing units throw a giant shadow over other takeovers.
"It's so huge, I can't even begin to predict" what will happen, says Kathleen Rotondaro, president of Washington, D.C.-based Quadel Consulting Corp., which HUD hired to run three agencies the government took over in recent years.
While Quadel would be interested in the job, she adds, "we would approach it with a lot of thought and caution."
In cities such as Downstate East St. Louis, Bridgeport, Conn., and Chester, Pa. (areas in which Quadel has run agencies), and New Orleans, a key element in HUD interventions-as well as court-ordered receiverships-has involved turning over some or all of the management to private companies. But results have been mixed.
Theoretically, what privatization boils down to is better management. "There is absolutely nothing like the incentive companies have to pay their bills and keep their doors open every day," says Mr. Byrne, an outspoken advocate of privatization. "You can't replicate that in the public sector."
Says Quadel's Ms. Rotondaro: "The real challenge is burrowing down into an organization and making people productive. Until those improvements happen, the buildings aren't going to improve."
Breaking the CHA into smaller parts or turning individual housing developments over to on-site managers, as HUD has suggested, is likely to help improve basic property management. But finding managers is no easy task.
"When they're good, they're quite remarkable people," says Jim Stockard, a housing consultant and commissioner of the Cambridge (Mass.) Housing Authority, who was hired to find a court-appointed receiver for the District of Columbia's housing authority last month. "They have to be part real estate expert, maintenance mechanic, cop, judge, detective, budget expert, social worker, accountant, big brother or sister, parent, teacher and it goes on and on."
Another ingredient is a radical change in the chain of command. Merely replacing one board with another has not led to major improvements in New Orleans, for example.
In Chester, HUD hired Quadel to run the public housing agency from 1991 to 1994, yet, halfway through, insisted on hiring an executive director to run the agency with Quadel's help, to return things to normal more quickly.
Although some improvements were made in trash pickups and physical conditions, Chester was eventually put into the hands of a court-appointed receiver.
"That's a better situation," says Robert Rosenberg, chairman of New York-based Grenadier Realty Corp., Chester's receiver. "I am the authority-the board is dismissed. I have the power to hire and fire without regard to seniority or civil service. If you're a consultant to an authority, you can make suggestions until you're blue in the face.
"It makes it possible to run the local housing authority as a business," he adds. "We hire good people, pay them better, and they know they're not protected by civil service regulations. They know if we turn this one around, we'll get another one."
Similarly, in the District of Columbia, where a court-appointed receiver took over the housing authority last month, the new overseer "has the power to fire," says Mr. Stockard. "That's absolutely critical."
Chicago already has experience with a court-ordered private receiver for CHA.
Since 1988, Chicago-based Habitat Co. has been running the agency's scattered-site program, building low-density public housing in a variety of neighborhoods to break up the concentration of low-income housing.
Habitat was hired after nearly 20 years of CHA resistance to a court order to build scattered-site housing. The company has about 1,600 units completed or under construction, with another 350 units in the pipeline.
Habitat and several other firms were in discussions about running CHA's housing for the elderly more than a year ago, but nothing ever came of it.
"Maybe HUD's in a better position to solve the problems than the prior board was," says Daniel Levin, Habitat's president.