The Chicago Housing Authority is considering ending its relationship with a pair of contractors that oversee the agency’s biggest public housing program — Section 8 apartment rentals — after published reports raised questions about the conditions of properties leased by private landlords.
Contractors CVR Associates of Florida and Nan McKay of California stand to receive more than $27 million this year to run the CHA’s housing choice voucher program, also known as Section 8, which pays for private apartments rented by the poor. The contractors’ jobs include managing a wait list and placing people in housing, inspecting the private apartments and operating a call center for tenants.
The housing authority is studying whether the program – which was first outsourced 20 years ago and now includes families in almost 46,000 apartments and single-family homes – can be better managed by CHA staff.
A series of investigations by the Chicago Sun-Times and the Better Government Association this year found that a number of Section 8 tenants live in apartments with building code violations in crime-plagued, impoverished neighborhoods. What’s more, the waiting list for private apartments is a confusing, frustrating and misleading process for placing the poor in housing.
The review is part of a larger analysis ordered by new CEO Eugene Jones Jr. of the housing authority and its contracts, according to the CHA. The takeover of the voucher management would be a dramatic reversal of policy for a public housing body that privatized much of its operations over the past two decades.
Chicago Housing Authority CEO Eugene Jones Jr.
“It is counter to the trend,” said Robert Whitfield, an advocate for public housing residents and a former CHA official in the 1990s. On the other hand, “I don’t think anyone should be under the illusion that any one way is going to solve every problem . . . if you ask me if bringing it in-house will solve every problem, I would doubt it.”
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Jones took over as CEO last year, becoming the fifth chief of the housing agency in five years. He came into an agency that has been criticized for sitting on hundreds of millions of dollars in federal funding while thousands of people in need of housing remain on waiting lists.
“We believe it is good for us to look at how well the program is working and what, if anything, can be changed or improved,” Jones said in a statement regarding the voucher program.
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The CHA is requesting bids (due June 17) for a firm to conduct a cost-benefit analysis on whether the job of managing as many as 46,000 public housing voucher units can be handled more effectively internally. Nan McKay, who founded the firm that carries her name, declined to comment. Interview requests to CVR executives by phone and email were not returned.
Under a current one-year contract that ends next March, CVR can receive up to $16.2 million and Nan McKay can be paid as much as $11.2 million. CVR has helped run the Section 8 program since 2008, first with Quadel Consulting and since 2011 with Nan McKay. Together, CVR and Nan McKay have collected tens of millions of dollars over the past eight years.
Critics say the presence of two firms actually makes the Section 8 program less efficient.
“Anything that standardizes and streamlines the voucher program and inspections is welcome,” said Leah Levinger, executive director of the activist coalition Chicago Housing Initiative. “It is baffling to have two contractors.”
The CHA has refused to provide any information on employees of the two contractors.
Prior to CVR and Nan McKay, Quadel was the sole private manager of the program. When Quadel was hired in the mid-1990s, the firm was viewed favorably after the CHA, by its own admission, ran a program plagued by scandal and ineptness.
“After years of agency mismanagement, the Section 8 program was transferred to private management in 1996 and, since that time, administration of the program has improved tremendously,” CHA officials wrote in a 2000 report to U.S. Housing and Urban Development. The federal agency, known as HUD, provides the lion’s share of funding to public housing agencies across the country.
