Affordable housing is an upward climb for minimum wage workers

One of the most challenging tasks for city dwellers, as the desire for urban living continues to grow, is to find affordable housing. For low-income to even moderate income workers, this has proved to be a daunting task. A recent report Out of Reach: The High Cost of Housing 2017, co-released by Housing Action Illinois in partnership with the Illinois National Low Income Housing Coalition, reveals that the housing wage for Chicago is $23.69, and for the rest of Illinois, more than $20.00.

The report provides the Housing Wage and other housing affordability data for every state, metropolitan area, combined non-metropolitan area, and county in the country.

Defined as the hourly wage a full-time worker has to earn to afford a modest rental home without spending more than 30% of their income on housing costs, this housing wage, startling as it may seem, faces another dilemma from the budget proposals, presented by the Trump administration. These would undercut much of the existing help in the form of housing subsidies, limited year to year increases, and the like, that could easily force some to homelessness.

As the report states: “to afford a one-bedroom home, a worker earning Illinois’ minimum wage ($8.25 per hour) must hold down more than two full-time jobs and work 85 hours per week. To afford a modest two-bedroom unit, a family with two minimum wage earners must work the equivalent of 2.5 full-time jobs, or 101 hours per week, between them.”

Perhaps the most disturbing aspect is that the authors found that “despite the cost of rental housing being out of reach for low-income households, President Trump’s federal budget proposal for next year includes deep cuts to rental assistance and programs that create affordable housing. Overall, the proposed budget allocates just $40.7 billion for HUD programs in Fiscal Year 2018—$7.4 billion (15 percent) below what was recently approved for Fiscal Year 2017.”

As if that were not enough, “the Center on Budget and Policy Priorities estimates that President Trump’s budget proposal would cut 10,734 housing vouchers, slash more than $107 million from our state’s public housing funding, and eliminate approximately $149 million in Community Development Block Grant (CDBG) funds and $40.5 million in HOME funds. Nationally, the proposal would also cut $133 million from homeless assistance grants and eliminate the National Housing Trust Fund.”

“The federal budget proposed by President Trump will increase the shortage of rental housing affordable to people with the lowest incomes,” says Bob Palmer, Policy Director for Housing Action Illinois. “People who can’t find an affordable home in the private market rely on federal funding for housing choice vouchers, public housing and other programs that make rent affordable. Parents with stable housing are in a much better position to make sure their children thrive in school and in life compared to parents who are struggling with homelessness."

Bob Palmer

In a phone interview with Palmer, he expanded on this, and other aspects of the report findings, noting that “low wage workers, whether they are teens, or students, will not be able to afford current rents, until there is higher employment, and it will especially be hard with rents that are 30 percent higher than their income, unless there is an increase in the number of affordable places to rent, and [correspondingly] higher wages.”

According to Out of Reach 2017, the average cost of rent and utilities for a two-bedroom apartment in Illinois is $1,085 per month.  In order to afford this without paying more than the standard of no more than 30% of income on housing, “a household must earn at least $43,406 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into a Housing Wage of $20.87.”

As he emphasized, “while the housing stock available depends on where it is located, some neighborhoods, like Logan Square and the South Loop have quickly rising housing costs, and after the foreclosure crisis, there has been a decrease in the housing supply. Now, there are, on the South and West sides, softer markets, but the area has also faced decreased incomes, that are 50 percent of resident income, that generally have lower rents compared to north side communities, there is a shortage of affordable rental housing for extremely low-income households.”

“Out of Reach finds that in no state, even those where the minimum wage has been set above the federal standard, can a minimum wage renter working a 40-hour work week afford a one-bedroom rental unit at the average Fair Market Rent.”

The change in the minimum wage, last week to $15.00 an hour, offers much needed relief to low wage workers, and effects over 2 million working Illinoisans (more than 40 percent of the state workforce are paid less than $15) and awaits the governor's signature. But, unless there is enough housing stock to meet the demand for affordable housing, as the housing wage figures show, it won’t be enough, says Palmer.

A recent story in the Chicago Reader detailed the history behind the absence, indeed the illegality of rent control in Chicago. It was created decades ago, to preserve profit margins, often labelling them counterproductive to American economic standards. The bill, titled “The Rent Control Preemption Act,” was passed in 1997. I asked Palmer how much an effect this might also have, since many housing subsidies designed to help low income people, might be labelled as such. He acknowledged that while “rent control is illegal in Illinois, passed many years ago, and has a negative effect on affordability, and the lack of an adequate supply, then more affordable units have to be built. There has to be a public role in creating enough housing.”

Support on the federal level has come from Rep. Keith Ellison, who notes in his preface that, “Rents are soaring in every state and community at that same time when most Americans haven’t seen enough of an increase in their paychecks. The result: more than 7 million extremely low income families do not have an affordable place to call home and half a million people are living on the street, in shelters, or in their cars on any given night. The human toll this places on families – through stress and job loss – are extraordinary and well documented.”

Continuing, he says that,”Despite the clear need, Congress has failed to address the affordable housing crisis in this country. Because of chronic underfunding, three out of every four families go without the housing assistance they need. Families wait for years on waiting lists before they see any assistance whatsoever. This is unacceptable. We can and must do better as a nation.”

As Palmer notes there is the much needed role of political will to move the needle on an issue that threatens the social fabric of the country. State Rep. Will Guzzardi (D-Chicago) has rallied a new bill to rescind the old law. While this represents a start, the effort still needs more of a push to change the situation, yet as the figures from the proposed Trump budget, show this will be a long haul.

Ellison concurs, but, also, states that “The most shameful part is the fact that we already have the resources and solutions needed to effectively end homelessness and housing poverty for millions of families. We just need the political will to do what is right. Each year, Congress spends about $200 billion to help house American families. A full three-fourths of these resources go to help subsidize the homes of the richest families through the mortgage interest deduction and other homeownership tax benefits. This means that we provide more housing assistance to help the richest 7 million households – who earn more than $200,000 a year – than to help the 55 million households that earn less than $50,000 each year, even though these families are far more likely to struggle to keep a roof over their head.”

To that effect, he has “put forward a plan to rebalance scarce housing resources to increase investment in proven solutions for those who need it most. The Common Sense Housing Investment Act (H.R. 948) reforms the mortgage interest deduction so that it better serves low- and moderate-income homeowners and reinvests the savings to help more families struggling to pay their rent. In fact, under my plan, 15 million more homeowners who currently do not benefit from the mortgage interest deduction will see a much-needed tax break. More than $241 billion will be reinvested to make rental homes affordable to people with the greatest needs.”

Ellison is part of the Progressive Congressional Caucus a group that also includes Illinois Reps. Luis Gutierrez, Danny Davis and Jan Schakowsky; and they have created a budget proposal, far different than the one by Trump, titled The People's Budget: A Roadmap for the Resistance FY 2018, and as Democrats, take a sharp turn away from the president’s proposal and issues a call to “Fully funds programs to make housing affordable and accessible for all Americans,” and “Invests $12.8 billion to end family homelessness.”

As just about everyone knows, by now, the state of Illinois has gone without a formal budget for two years, and now, while the House and Senate have passed their own versions, with the House not yet voting on the Senate version, there remains a discrepancy that affects affordable housing that the Coalition describes on its website: “The Senate Democrats did demonstrate a positive way forward by passing a budget that protects existing resources and generates new revenue. However, one budget line item in that proposal is particularly representative of the choices faced by our elected officials. In the Senate Democrat’s budget proposal for the upcoming year, FY 18, which passed on May 23, the Supportive Housing Services line item was funded at $13.4 million in General Revenue Funds (GRF). This is same amount of funding that was available in the last fiscal year with a full budget, FY 15."

"A version of the FY 18 budget—a compromise between Democrats and Republicans—that passed the Senate just a week earlier, May 17, provided only $3.8 million in GRF for the Supportive Housing Services line item. Such a huge cut would mean that thousands of people who need services to help maintain their housing would not receive those services and be at risk of homelessness," they state.

Working for an improvement in basic human needs, is not a privilege, to be granted, but a necessity for a just society; and the Out of Reach report is a first step in achieving that goal.

Proposed merger of CTU with charter union: a new direction

Updated June 10, 2017

Regular readers of this blog, and my now defunct column for the Examiner, have noted how often I have written about the politicization of public education in America, both its supporters and its detractors, as well as those who have been tasked with cabinet level positions, yet seem oblivious as to the huge stake in social capital that is at risk, for doing so little, or failing to recognize the very real needs of the nation’s future.

Chicago has the nation’s third largest school system, but one that is predominantly black and brown, and faces the neglect, in some quarters, of the very real needs that these young people require.

The Trump administration has given a huge push for charter schools, yet local test scores are significantly higher for those that attend neighborhood schools. The drain on the taxpayer’s dollar do not seem to reflect the somewhat narrow success that some charters deliver, paid with taxpayer dollars, and managed by for profit companies. The inherent dichotomy is apparent, to all who look, and the situation, does not seem to have improved, at least currently.

Last week the Chicago Teachers Union announced a public proposal to merge with the union of local charter school teachers, CHiActs, the Alliance of Charter Teachers and Staff, in order to preserve, and enhance teacher unity directed toward student achievement.

Recently two schools, ASPIRA and Passages narrowly avoided the prospect of the first charter school strike, in the country.  Much of the conflict was directed towards salary, benefits, classroom resources, and professional equity.

In a letter obtained by the Chicago Sun-Times, they stated: “We believe that unification is a key step to allow educators to speak with one voice in Chicago, halt privatization and bring additional resources to our collective work at the CTU,” the letter says. “That said, merging two dynamic locals into a single union is a delicate process and will inevitably bring challenges and tensions. We must be intentional about addressing both sets of members’ questions, concerns and commitments to having a clear voice, representation and identity within the new, larger organization.”

Karen Lewis

“We’ve got the same problems with the school budget, same problems with financial oversight and having a say in how budgets are spent,” Chris Baehrend, president of ChiACTS Local 4343, said. “The majority of our schools have seen enrollment decline, budget cuts and layoffs. . . . We’re really facing the same problems and then if you really think about it, it doesn’t matter who cuts our check. We’re servicing the same kids.”

Update: In less than four days, on a Friday afternoon, it was announced that members of both unions overwhelmingly agreed to the merger. The vote was 671 v. 130. A joint statement read, "CTU members will vote on unification with ChiACTS this fall. Ballots from union charter schools were counted tonight after the close of the Friday school day. Final vote counts of the 1,000-strong union were 671 in favor and 130 against unifying -- or about 84% of voting members supporting unification."

“All Chicago educators, charter and district, face the same challenges -- shrinking budgets, layoffs, union-busting, lack of voice, and a wholesale assault on the quality of the education of our students,” said Chris Baehrend, President of ChiACTS Local 4343 -- the Chicago Alliance of Charter Teachers And Staff -- which represents 32 charter schools in Chicago. “This vote for unification is a vote for educators with both ChiACTS and the CTU to speak with a stronger collaborative voice for real educational justice for all of our students. It is our identity as public educators -- not our employers -- that defines us, and our overwhelming vote for unity affirms that charter educators are educators first, and servants of the public with a shared commitment to the futures of our students across the city.”

The next step is that CTU will engage in its constitutional change process in the fall, and a formal merger will occur pending a supportive vote from CTU members. “The CTU supports union rights for all educators in Chicago, including charter school teachers,” said CTU vice president Jesse Sharkey. “Local 4343’s vote for unity takes a stand for using our collective power to support quality public education for the students we all serve.”

Charters when they first were promoted, seemed like a great idea, especially for those that were less enchanted with their local school systems; and when I was living in Washington, the mere mention of charter schools brought near beatific smiles of pleasure, and self-satisfaction, if your child was enrolled in one of them.

“The immense freedom that came with setting up charter schools is increasingly under fire, spawning union drives, potential strikes and pushback over pay and working conditions that are reshaping the way charter schools were expected to operate, usually in a nonunion environment,” and has removed much of the afterglow from parents and some lawmakers, noted the Chicago Tribune in an insightful analysis.

A pro-labor town, "Chicago has become the epicenter of charter union organizing in the country," said Andrew Broy, president of the Illinois Network of Charter Schools.

With that in mind, the erstwhile, and always outspoken, CTU President Karen Lewis has said, “"It's not about destroying charter schools," she said. "Charter schools are here; they're not going anywhere. So the key is, how do you make them a bitter pill to their management companies? It's the management companies we have the issues with, not the charter teachers, not the students, not the parents. The key is, organize people to fight for fairer conditions of work, and then that's good for everybody."

The Trib noted that “Chicago charter union said it represents about 1,000 teachers at 32 charter schools in Chicago, which is about 25 percent of charter schools citywide. That's double the national percentage,” proving once again, that Chicago can go to the mat for issues that it believes in. We may be known as the city of broad shoulders, but also for some old-fashioned chutzpah, or moxie, depending on your origins.

In March, State Rep. Will Guzzardi, and five other Illinois lawmakers, announced plans for a new law forbidding the opening of new charters in areas that were already financially distressed, under the premise, that if those areas are financially strained, then they should not open new schools. He also noted,”With CPS in dire financial trouble, we must take swift action to prevent privately managed charter operators from siphoning needed funds away from the public, neighborhood schools.”

This seems right, to me, yet there has been some blowback, most notably in a Tribune editorial that bemoaned the diminishing choice for parents, and that underused school buildings of CPS could be used for charters, but this also seems like a Trojan Horse to increase more charters.

Adding to the cacophony of voices from the legislature is the passage of a new funding formula for Chicago public schools who have the largest spending gap, per pupil, in the nation. Long a subject of debate, and much bemoaned fact, the new legislation offers a solution, for them, that allows those schools in distressed areas to get more money, while ensuring that there would be no change from last year’s funding, to assuage fears from wealthier school districts, fearing they might get less.

Predictability the response, from Republicans, especially, outside of the city, is that this is a bailout, yet, while that might be, what else can be done? In these challenging times, how can those less affluent, be ensured of a decent education? Not to mention the 855 school districts, which include CPS and downstate.

The old system, based on property taxes, clearly was not working, and combined with a low contribution, from the state, which in 2015 was one-quarter, it was clear that this could not continue long.

Chicago schools received an amount significantly lower than New Hampshire, South Dakota, and Nebraska, according to the last census, even with the Feds making up the balance.

Looking at the numbers, Lake County spends $32,000 per pupil, in 2016 and CPS, getting $15,000 per pupil; and the lowest was $4,340 for a District 92 school.

A large part of the problem was that lawmakers from the wealthier districts would not vote to take money from their constituents, to help, those that receive less. And in a conundrum, one of the bipartisan educational panel members, State Rep. Bob Pritchard, of Hinckley, did not vote on the bill, when it came to a votel. Stating that “creating a crisis”, would be necessary, he says that  everything else has been tried.

Prticahrd’s remarks, suggest a desire for a compromise, of sorts, during this interview with NPR affiliate, WBEZ, where it was noted, that he felt, “the plan just needs work, and there's no way he'd vote against it.”

If all of this seems like a decades long cyclical, then that seems to be part of what Illinois politics have become, an eternally long loop. When will it end?

Illinois faces financial cliff with no budget passed

Illinois Gov. Bruce Rauner

For Illinois, a midnight deadline, of Wednesday, the chance to pass a budget has come and gone; giving partisanship a ringing endorsement, along with political stalemate, as the nation’s fifth most populous state, faces a financial crisis that if prolonged, can no longer function in the black. Awash in red ink, it faces a backlog of unpaid bills, currently at $14.5 billion.

The best that can be hoped for is another last minute stop gap bill that, as the Chicago Sun-TImes editorialized, “will not include sufficient revenues, meaning the state’s debt will grow.”

Bruce Rauner, the first Republican governor since 2003, has butted heads with the the powerful Democratic Speaker of the House, Mike Madigan, amidst an onslaught of name calling and accusations. The former says that the Democrats are “completely derelict of duty,” while the latter claims that the process has been “held hostage by the Governor’s agenda.”

The situation has now deteriorated to the point that state bond ratings were lowered just above junk status, on Thursday, by S&P Global Ratings, from BBB to BBB-,  reported Greg Hinz of Crain’s Chicago Business, who, quoting from the reports, said, "In our view, the unrelenting political brinkmanship now poses a threat to the timely payment of the state's core priority payments."

To add to the impending gloom, they also said that Illinois, "is now at risk of entering a negative credit spiral, where downgraded credit ratings would trigger contingent demands on state liquidity, further exacerbating its fiscal distress."

Causing even further damages are $800 million in interest fees on the overdue bills that must be paid by the end of June. The only silver lining is that there have been no missed bond payments.

Bloomberg Politics reported that Illinois is the “first state since 1970 to lose investment grade status.”

Before the downgrade, 10 year bonds, yielding 4.4%, were “only 2.5 points more than those on on top-rated debt. That gap -- a measure of the perceived risk -- is the most since at least January 2013 and more than any of the other 19 states tracked by Bloomberg.”

While there is the month of June, remaining, to hammer out a budget agreement, there is still cautious hesitation since less than two weeks ago the State Senate Dems voted on a $36.5 billion budget, but lacking Republican support, is unlikely to see passage.

According to the Chicago Tribune, “Senators failed to approve technical legislation that would make the budget work. And they didn’t vote on tax increases meant to pay for their spending plan - an issue at the heart of the ongoing divide between Democrats who control the General Assembly and Republicans loyal to Gov. Bruce Rauner.”

They also speculated that the Democrats may need the political cover of a June decision to allow them to share the blame, equally, with the Republicans, for any tax increases.

Meanwhile Rauner has stuck like glue to the Republican playbook that demands changes in union negotiations, workmens comp, and now property tax freezes that would further hinder schools statewide, that are already $1.1 billion in debt. Illinois has been a true blue state for generations, and the likelihood that this would play, as some observers have noted, is pure fantasy.

The budget bill was refused support by the GOP, “even though it contained some of the ideas they backed,” because it lacked a deal on key tax issues, with the Dems turning down “the technical bill that would implement the budget, which contained various spending cuts pushed by Republicans.”

With this type of logger jam, the absence of a vote is not surprising, despite the old adage which claims that “hope springs eternal.” To see a chance in the House, 71 votes are needed, but since there are only 67 Democrats, reaching across the aisle to get the remaining votes will be mandatory.

The spectre of unfunded liabilities --- more than $129 billion remains, but also is another factor that affects ratings by the bond rating agencies. Balancing that with an operating deficit of $6 billion, requires more than both the State Assembly, and the governor, may be able to do.

“Republicans have insisted a 32 percent increase in the personal income tax rate, from 3.75 percent to 4.95 percent, be a part of taxpayer parity with the adoption of a local property tax freeze. Both chambers have approved workers' comp changes,” reported ABC7 Chicago.

The damage, the Dems say, from a property freeze, would be immeasurable because it would harm local school districts that rely on the revenue. Yet, on Tuesday, the Senate Democrats “did lock most local real estate levies in place for two years, but Rauner said they didn’t go far enough.”

Adding to the chorus of Democratic critics is Eleni Demertzis, a Rauner spokesperson, who said, that vote was “a phony two-year freeze riddled with holes.”

State Rep. Greg Harris (D-Chicago) told ABC7, "It is very hard to get people to take tough votes when the governor's saying I'm going to attack you on every vote you take and every vote you don't take, and anything you send me I'm going to veto.”

The fallout for social service agencies and colleges has been devastating, and, one in particular, Lutherbrook, a 150 year old organization, which treats abused children will be hard hit. “There are currently 30 kids who live and are being treated at Lutherbrook, but when summer ends those children will be forced to relocate back to their homes or into foster care” and "Knowing the kids what won't get help, knowing-knowing personally the staff that are affected by this, it's incredibly difficult," said Mike Bertrand, Lutheran Child and Family Services.

“LCFS will close eight other outreach programs and that means layoffs for employees. LCFS said it will cut 100 jobs: 25 percent of its staff, the biggest cut the organization has ever made”, said the television affiliate.

Widely reported has been the effect of local colleges and universities, who have faced a severe deficit, as they are treated as vendors, by the state.  And, widely credited with giving students a quality college education, at affordable prices, is Northeastern Illinois University, on the city’s North Side, but on Tuesday Interim President Richard J. Helldobler held a press conference, where it was announced that the school will be eliminating 180 positions, in the coming weeks.

Helldobler noted, in his remarks, “This 700-day old budget crisis has been traumatic to our faculty and staff, but most of all our students, many of whom are minorities, first in their families to go to college, and come from the bottom socio-economic quartile. Let me remind those who hold the state's purse strings that public universities — especially Northeastern Illinois University — are the economic engines of the state. Our current students and graduates contribute to our communities, play important roles in the workforce, and they also contribute to the tax base. And, they vote.”