Chicago accused of blowing millions on poorly renovated homes for seniors
Low-income seniors who rely on homes provided by the Chicago Housing Authority (CHA) have been the victims of poorly managed renovation projects, according to a recent investigation by the Better Government Association (BGA).
The CHA has spent $132 million to rehab apartment buildings for seniors since 2015, but more than $33 million of that figure has been cost overruns by the construction companies doing the rehabs, the BGA said.
Asked about the cost overruns, CHA spokesperson Molly Sullivan said the agency has had procurement issues but is now under new leadership, according to the report. She also noted that many of the buildings the authority works on have unforeseen problems. The latest rehab project the CHA approved is for a building in East Garfield Park, and even assuming that project avoids the overruns that have plagued previous projects, it will cost almost $300,000 per unit – far above the value of single-family homes in the area, according to the BGA.
The building that might best reveal the underlying problem is Caroline Hedger Apartments in Rogers Park. The project accounts for nearly half of the cost overruns approved by the CHA board since 2015, at a whopping $14.4 million.
Caroline Hedger residents have used pickets and lawsuits to protest the work that hey say does not reflect the swelling costs of renovations. Stephanie Hayes, a 66-year-old resident, told the BGA that a closet door fell on her granddaughter in one of the rehabbed units. Over the course of the 2016 winter, many residents went without heat while the system was replaced. Peggy Spencer, a 70-year-old resident, and her husband, Izzy, wore their coats inside and had to bundle up under multiple blankets at night. Seventy-four-year-old Cesar Vera fell in the shower – twice – after moving into a rehabbed unit that did not have ADA grab bars in the bathroom. Other residents noted that they sometimes had to wait up to an hour for an elevator to exit the 28-story building.
According to the BGA, these problems were addressed slowly and after significant complaints from residents. The Sargent Shriver National Center on Poverty Law stepped in to get grab bars installed in the renovated units, which according to the CHA were removed because they were not required by the U.S. Department of Housing and Urban Development (HUD). Replacing the bars led to a $2 million contract modification, which the CHA board approved in April.
At the board meeting at which the CHA approved the East Garfield Park Project, CHA Commissioner Mark Cozzi, who voted against the measure, expressed concern that the authority was awarding projects to contractors that were intentionally under-bidding with plans to add modifications and up the final cost.
The CHA spokesperson noted that the authority follows federal guidelines in rewarding its contracts, but the BGA found that many of the companies that win rehab projects have histories of cost overruns, including Madison Construction, the contractor behind the Caroline Hedger project.
Originally proposed to bring the building into compliance with requirements related to sprinkler systems, voice communication systems and fire-rated doorways, the project swelled to include other renovations that mirrored a project done on the same building in 2007. Windows, doors, stoves, bathroom fixtures and kitchen cabinets that had been installed 10 years before were torn out and replaced.
Once the project started, the CHA board approved multiple contract modifications, including the $2 modification to replace grab bars and a $3.8 million modification for overtime pay and additional workers.
Hayes, one of the building's residents, told the BGA that she cannot believe the authority spend $45 million on the rehab project. Vera, who fell in his shower, said that he was left with constant pain in his neck and back.