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HUD Audit Finds CHA Non-compliant with Federal Regulations

July 5, 2012

Chicago Housing Authority residents and activists alike have long criticized the CHA for failing to support resident-owned businesses (ROBs) and to increase resident employment.

The agency was once a leader in both areas. That declined with the so-called HUD takeover in the 1990s. By 2010, the agency had no record of its once large contingent of ROBs; there were no resident-management corporations at all.

Both public housing residents and community activists have long complained about these failures (for example, see our blog entry of  April 28, 2012 for a link to a video of the March, 2011 CHA board meeting). Congressman Danny Davis listened to residents’ complaints and pursued the agency about its efforts. In fact, the 7th Congressional District Business Group was established in part to respond to the failure of local government to include residents of poor, black communities in local public works, contracting and employment.

Earlier this year, HUD reviewed CHA performance and issued a Section 3 Audit Report.

The agency was cited for a number of significant failures.  Over a three-year period, less than one percent of contracts went to resident businesses. Less than two per cent of the agency’s hires were residents.  More significantly, the agency allowed contractors to pay into a fund in lieu of resident employment or contracting.

The fund lacks clear public accountability procedures; agency documents report that large sums were likely transferred elsewhere, ostensibly to be used to the benefit of residents (see, for example, the $1,000,000 transfer of funds to City Colleges  of Chicago approved at the January, 2012 CHA board meeting).

Subsequently, CHA officials met with residents. CHA Executive Director Charles Woodyard joined a meeting of the 7th CD Business Group, explaining planned efforts to respond to CHA’s lack of efforts.

He also met with community advocates (see our blog of May 1, 2012) as well as residents and ROB proprietors. Nevertheless, the agency has yet publicly share its response to the audit; nor has it provided any indication of its plans to cure the audit findings.

The 7th CD Business Group is composed of a large and diverse group of individuals and organizations.  We look forward to working with CHA to make it again a leader in resident involvement in contracting and employment.

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3 Comments
  1. Reblogged this on KathyPowers1 and commented:
    Now CHA wants to put a Target on CHA property ON the community room and parking lot at Caroline Hedger Senior Building in Rogers Park at Sheridan and Devon. The local businesses are furious and the residents, too! Although the red-tape business is not finalized, construction equipment already on the property to dig int! Do we pay our taxes to lease land to profit-making organizations or to assist our seniors?

Trackbacks & Pingbacks

  1. Detroit Michigan’s Section 3 Plan | West Side Section 3 and Resident Owned Businesses
  2. HUD Secretary Julián Castro Announces National Section 3 Registry | West Side Section 3 and Resident Owned Businesses

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