The Harvard University analysis of annual housing survey changes between 1990 and 1996 reported by J. Linn Allen in “Housing crunch looms for the poor” (Business, Sept. 29) is unduly pessimistic in predicting that welfare reform and gentrification will accelerate the “already rapid disappearance” of affordable housing and that Chicago will feel the brunt sooner than the rest of the nation.
A closer examination of survey findings for the eight-county Chicago area reveals record home ownership and housing assistance gains for blacks and Latinos here, as well as in the nation. The real estate recession of 1989 to 1991, barrio expansion, and federal and local housing assistance programs have enlarged the local stock of affordable housing, offsetting losses due to gentrification and demolition.
Between the last recession year of 1991 and 1995, the Chicago area’s supply of public assisted housing surged by 20 percent, from 101,100 to 120,900 occupied units, while market housing grew by a more modest 5 percent, from 2,548,600 to 2,668,400 units.
Gentrification in the central area and the North Side and demolition on the South and West Sides increased housing prices and reduced the stock of affordable housing. But these losses were offset by the territorially much larger expansion of minority areas where housing price deflation increased the supply of affordable housing.
For every city block gentrified since 1990, approximately 10 blocks were added to the area’s rapidly expanding barrios. As a result, Latino home ownership shot up 58 percent between 1991 and 1995, from 79,500 to 126,000 units. After adjusting for inflation, the average Latino home value of $99,392 in 1995 was a mere 3 percent above the 1991 value of $96,240.
Ghetto housing bargains and self-segregation are factors that help keep Chicago the nation’s most segregated large city. Because whites are willing to pay a large premium for not living in ghettos and barrios, blacks and Latinos who are not so disinclined pay much less than whites for comparable housing. In the Chicago area in 1995, average black/white differentials in monthly housing costs were $591 versus $1,017 for housing units built since 1975, $662 versus $1,214 for units with four or more bedrooms, and $693 versus $1,230 for units with two or more bathrooms.
Even though blacks and Latinos earn, on average, 58 percent and 69 percent, respectively, of what whites earn, the former pay one-fourth of their income for housing (25 percent and 26 percent, respectively), about the same as whites (23 percent) and much below the national norm of 30 percent set by HUD.
Affirmative action in housing assistance is still alive and well in Chicago. Blacks account for 66 percent of public housing tenants and 59 percent of beneficiaries of other federal and local housing assistance programs; they have 77 percent of VA mortgage loans and 78 percent of FHA mortgage loans.
Despite welfare reform, Section 8 cutbacks and the threatened dismantling of CHA’s high-rise projects, political compromise and the economics of Chicago’s housing market are likely to continue the affordable housing boom in the 1990s.
