In Chicago Speech, Obama Touts Failed, Corrupt Housing Policy

In Chicago Speech, Obama Touts Failed, Corrupt Housing Policy

In a speech Friday afternoon at the Hyde Park Academy in Chicago, IL, President Barack Obama reminisced about his career as a community organizer on the city’s South Side. As he has done in previous speeches in the area, Obama stressed the role of fathers in families, the importance of education, and the need for hope. He also described a housing policy with interesting–and disturbing–resonances in his early political career.

Switching back and forth between his teleprompter and off-the-cuff remarks, Obama also alternated between past and present, speaking about both his early work in Chicago and his administration’s proposals for the future. One policy in particular was familiar from Obama’s early years: replacing low-income housing.

We’re going to keep working in communities all across the country, including here in Chicago, to replace rundown public housing that doesn’t offer much hope or safety with new homes for low and moderate-income families.

Obama began his organizing career trying to improve, not replace, “rundown public housing.” In his 2008 biography, Barack Obama: The Story, David Maraniss writes about Obama’s efforts in the 1980s to organize residents of Chicago public housing projects such as Altgeld Gardens to demand the removal of asbestos.

In the 1990s, a new model of urban development gained favor in Chicago. Public housing projects, such as the Robert Taylor Homes on the South Side (named for Valerie Jarrett’s grandfather, a civil rights figure) were torn down in favor of middle- and mixed-income developments elsewhere in the city that would integrate poor families with the rest of the community. The idea was partially modeled after a similar program in Toronto.

For politicians and real estate developers, the new policy presented new opportunities to make money. And that is exactly how real estate developers like convicted fraudster Tony Rezko used politicians like Barack Obama. The result, as the Boston Globe documented in 2008 (a rare example of the mainstream media actually vetting a little known-but important aspect of Obama’s past), some of the housing developments for which Obama took credit decayed very rapidly into a state of neglect and disrepair.

As a state senator, the presumptive Democratic presidential nominee coauthored an Illinois law creating a new pool of tax credits for developers. As a US senator, he pressed for increased federal subsidies. And as a presidential candidate, he has campaigned on a promise to create an Affordable Housing Trust Fund that could give developers an estimated $500 million a year.

But a Globe review found that thousands of apartments across Chicago that had been built with local, state, and federal subsidies – including several hundred in Obama’s former district – deteriorated so completely that they were no longer habitable.

Grove Parc and several other prominent failures were developed and managed by Obama’s close friends and political supporters. Those people profited from the subsidies even as many of Obama’s constituents suffered. Tenants lost their homes; surrounding neighborhoods were blighted.

In 2012, the Washington Times delved deeper in its series, “The Obama You Don’t Know.” The Times described a 1997 speech that was critical to Obama’s early political career, in which he promoted the idea of “private-public partnerships” for housing developments whose residents would form the political base for left-wing activism–and, though he did not spell it out, whose profits would fund political campaigns:

Obama’s innovation was to expand the concept beyond simply building affordable apartments and high-rises. It encompassed a cradle-to-grave vision of providing for the material needs of the low-income families residing in the new housing, including their schools, child care, job training, medical coverage, clothing and food.

In turn, the residents would campaign and vote for the officials advocating the partnerships, adding significantly to their political power.

Left unstated was the underlying reality that politically connected developers who built the housing would profit handsomely and could be expected to gratefully give millions of dollars in campaign contributions to politicians like Obama who made it all possible.

Chicago thus became the proving ground for Obama’s vision, which, according to LISC spokesman Joel Bookman, “really changed the direction of community development in Chicago and ultimately nationally.”

The circle around Obama profited handsomely, as did close Obama adviser Valerie Jarrett, who was able to leverage her political and business connections into lucrative real estate investments in poor communities.

Obama put his legal and political talents to work for some of these landlords. The Times reported that Obama’s self-described “civil rights” litigation often involved defending slumlords who had failed to provide services to their tenants or who had even removed their tenants from their homes in the middle of winger.

Rezko was one of “a cluster of Chicago businessmen who formed an Arab-American network at the heart of Obama’s political apparatus,” the Times reported in 2012. That network was involved both in local politics and in foreign policy battles through organizations like the Arab-American Anti-Discrimination Committee (ADC).

Obama’s enthusiasm for low-income housing reform is inextricable from a world of corruption and radicalism of which he himself partook, engineering what he later called a “boneheaded” land deal with Rezko.

It is odd that Obama should choose to evoke that same policy in a speech to children about the importance of transcending difficult circumstances. The housing developments that Obama helped create have, in some cases, merely perpetuated the misery of the South Side’s poorest residents–and perhaps contributed to the cultural conditions from which today’s gun violence has emerged. 

In Obama’s view, only the good intentions matter, not the practical results of big government–or the corruption and cronyism that such policy may invite.