Lori Lightfoot’s showdown with the feds: What’s at stake for people in Chicago

About 20 years ago, Thomas Wilkins was homeless and HIV-positive and had no family to turn to for help.

In 2006, with the help of AIDS Foundation of Chicago, he was able to get an apartment in Logan Square, where he still lives. He says having an apartment saved his life, helping him turn things around. He says he’s now regularly taking his medicines, eating better and exercising.

“Without this program, I really believe I would be dead years ago,” says Wilkins, 59. “I was on the street. I didn’t have no way to secure my meds.”

For Wilkins and other Chicagoans with housing needs, federal money — provided through the Department of Housing and Urban Development — is often a lifeline. Through a range of city programs, it helps City Hall and the federal government address social needs in Chicago that also include a wide range of mental health services and the threat of lead poisoning, among other issues.

But now federal funding that provides the city with tens of millions of dollars a year for such programs is in jeopardy unless Mayor Lori Lightfoot’s administration agrees to address what a HUD investigation found are discriminatory practices related to planning, zoning and land use.

The city is accused, in essence, of environmental racism, of helping polluting businesses move out of largely white neighborhoods to majority-Black and Brown communities.

For the city to tap the HUD money that it relies on, it has to abide by federal law. That includes not having policies that discriminate on the basis of race.

Despite HUD saying that’s exactly what the city’s policies regarding polluters do, laying out its findings this past week in a letter to Lightfoot, the mayor says that’s not at all true.

“It is preposterous,” Lightfoot said of HUD’s accusations. “We’ll let the lawyers sort it out.”

In a battle of city vs. the federal government, the housing agency has a great deal of leverage. It can turn off the spigot the HUD money flows from.

The dispute began with a complaint from Southeast Side residents in September 2020 that City Hall’s support for moving General Iron’s scrap-metal operation to their Latino-majority neighborhood from largely white, affluent Lincoln Park amounted to a violation of their civil rights.

The complaint led to an investigation in which HUD says it also looked more broadly at what it describes as the city’s historical pattern of discriminatory planning and zoning practices.

The scrap-metal operator’s permit was rejected earlier this year by Lightfoot’s public health department, a decision that the company is fighting before a city administrative hearing officer.

The city of Chicago’s 2021 budget included $375 million in HUD funding that went to more than a dozen city departments, including public health and planning and development, according to the letter HUD sent to the city.

That was higher than usual — the city had been getting nearly $80 million a year from HUD — because it also included COVID-19 stimulus money that was signed into law after the pandemic hit in 2020.

City officials haven’t disputed those figures.

Much of the money comes from a HUD program called Community Development Block Grants. City Hall has a lot of flexibility as to how it spends that money. Some of it goes beyond housing, to job training and economic development.

It’s through these grants that the city funds many social service programs, including those for seniors and victims of domestic violence and efforts to reduce lead poisoning in children.

City officials have pointed to their success in reducing elevated lead levels in children over the past 30 years.

“The city of Chicago definitely relies on HUD funding for bringing lead-abatement services to low income families,” said Amanda Gramigna, associate director of environmental health for the nonprofit Elevate, which receives HUD funding through City Hall for various programs, though not for lead abatement. “It’s really essential funding. To lose it would be highly detrimental to families.”

Another HUD program helps Wilkins, who collects less than $1,200 a month from Social Security. That program called Housing Opportunities for Persons with AIDS.

The AIDS Foundation of Chicago gets HUD money directly and also through the city. That money now keeps 650 people with HIV or AIDS from living on the street, said John Peller, chief executive of AIDS Foundation of Chicago.

Peller said his organization gets $5 million a year in HUD funding that’s administered through the city’s public health department.

“This housing support is critical,” Peller said. “Rents in Chicago are becoming unaffordable.”

Though the HUD money is essential, it’s not enough to fight homelessness in Chicago, advocates say.

“Given the scope of encampments we’re seeing in Chicago, the need is even greater than what existing HUD support provides,” Peller says, adding “HUD funding is critical to supporting quality of life for people who are homeless, formerly homeless or living with chronic illnesses like AIDS.”

Anthony Vazquez / Sun-Times

Chicago’s Breakthrough Urban Ministries also depends on HUD money directed to the city. It helps Breakthrough provide shelter and services for homeless people, including addressing “chronic homelessness.”

“That money from HUD to the city is vital for the population we serve,” says Nikki Yancy, associate director of operations and facilities for Breakthrough.

Based in East Garfield Park, Breakthrough provides permanent and transitional housing and other support for the homeless, such as food, showers and laundry. The organization, which has been around for more than 30 years, also offers other social services.

In addition to Lightfoot’s public display of anger directed at HUD this past week — the mayor also vowed to “prove them wrong” — the agency said in its findings that city officials had not been cooperative during its nearly two-year investigation. Even before the investigation was completed, HUD officials had complained that Lightfoot administration officials were slow-walking responses to its requests for information.

“The city failed to timely and fully produce requested information to its detriment,” Jacy Gaige, HUD’s director of compliance and disability rights division for the office of enforcement, said in a letter to city officials July 19. “The city severely delayed the production of some requested materials without good cause.”

Though the final letter to the city was delivered only in the past week, Gaige disclosed that a summary of the agency’s findings were provided to Lightfoot’s administration in February.

“The city has not responded with evidence to alter the department’s conclusions,” Gaige wrote.

HUD officials did not respond to requests for comment.

The letter from Gaige also points to a pattern of city policies and practices that it said helped move heavy industry out of white communities, such as Lincoln Park, even before the city began preparing to help General Iron move to the Southeast Side.

Former Mayor Rahm Emanuel’s administration got the process started, but it was Lightfoot’s law department that signed an agreement with General Iron in 2019 that made possible the planned relocation to a Latino community surrounded by Black neighborhoods.

Despite Lightfoot’s denial of a permit for the scrap-metal operation, Gaige noted that a pending appeal by the business’s owner Reserve Management Group is asking a judge to overturn the city’s decision, which could allow the already-built facility to begin operating. The permit that was denied in February was the last approval the company needed from the city.

“If the appeal results in an approval, operations at the new site are expected to begin immediately since the new facility is fully constructed and all other permits have been issued,” Gaige said in her letter.

Jesse Mumm, who teaches critical ethnic studies at DePaul University, said he was surprised Lightfoot pushed back on accusations that the city has discriminated against people.

“The city of Chicago has the responsibility to say: We’re going to defend our residents,” Mumm said.

Brett Chase’s reporting on the environment and public health is made possible by a grant from The Chicago Community Trust.