Department of Housing – BGA Policy 2025 Budget Snapshot

Departmental Highlights

Snapshot: Appropriation & Staffing Changes from 2024 Budget

• Despite overall budget cuts, Housing was one of a few departments that added programmatic staffing, with a net overall increase of five positions that includes two additional city planner positions, a new senior operations analyst, a new housing development coordinator, and a new rehabilitation construction specialist.
• In addition to roughly -$14 million declines in appropriations from both the pandemic relief and federal grant funds, DoH's 2025 budget also sees a -$9.5 million drop in appropriations from the Affordable Housing Opportunity Fund, reflective of an overall -73.5% drop in estimated revenue from that fund. Increases from the program income, state grant, and CDBG funds only partially make up the gap, leaving DoH down -14.8% from the previous year, which was itself down -15.7% from 2023.
• Core departmental programs are down significant amounts, including a -$117.9 million reduction in rehabilitation loans and grants, -$9.5 million in the affordable housing density program, and the total elimination of the housing assistance appropriation.
• Third-party spending is also down considerably, with -$42.6 million in delegate agency appropriations and -$4.4 million in professional and technical services.
• As of October 28, 2024, when the city's new ARPA dashboard was made available, DoH had $368,457 in allocated ARPA funds, of which $338,421 have been allocated and spent. All DoH ARPA spending went towards management and administration, with no DoH-specific programming in the ARPA dashboard.

Historical Context

Rahm Emanuel replaced the then-Department of Housing with the Department of Planning and Development in the 2014 budget, at a lower rate of funding than its predecessor. (Housing had $191.7m in appropriations in the 2013 budget; DPD began its existence in the 2014 budget with $153.8m.)

The Department of Housing returned to city budgets in the 2019 budget and resumed operating as an independent office under Lori Lightfoot's administration, with $148.4m in appropriations in 2019 and $198.9m the following year.

Housing then saw significant budget increases in the pandemic-era budgets, more than doubling its appropriation, predominantly from Emergency Rental Assistance funding. The end of ERA funds and a shift of the Home Repair Program from the department budget to the Finance General budget significantly reduced DoH's overall appropriations in the 2024 budget, and the proposed 2025 budget sees a further reduction of -14.8% from last year's appropriations.

Staffing

Despite overall budget cuts, Housing was one of a few departments that added programmatic staffing, with a net overall increase of five positions that includes two additional city planner positions, a new senior operations analyst, a new housing development coordinator, and a new rehabilitation construction specialist.

Appropriations

In addition to roughly -$14 million declines in appropriations from both the pandemic relief and federal grant funds, DoH's 2025 budget also sees a -$9.5 million drop in appropriations from the Affordable Housing Opportunity Fund, reflective of an overall -73.5% drop in estimated revenue from that fund.

Increases from the program income, state grant, and CDBG funds only partially make up the gap, leaving DoH down -14.8% from the previous year, which was itself down -15.7% from 2023.

Largest Appropriations

As with several other departments, the largest DoH appropriation by far in this year's budget is a $151.1 million "reserve balance" appropriation from a number of grant funds. This appropriation, which appears in several department's budgets and has been retroactively added to 2024 appropriations data as well, was not used in the previous year's budget at the time of its passage. BGA Policy has reached out to the Office of Budget and Management for clarification of this appropriation's purpose and has not yet received a reply.

Apart from the new reserve balance, the department's largest appropriation is, as it was in the previous year's budget, the rehabilitation loans and grants account, followed by pass-through spending to delegate agencies.

Change from Previous Year

Appropriations are down nearly across the board at DoH, with a slight increase in salaries and wages on payroll the only uptick.

Core departmental programs are down significant amounts, including a -$117.9 million reduction in rehabilitation loans and grants, -$9.5 million in the affordable housing density program, and the total elimination of the housing assistance appropriation.

Third-party spending is also down considerably, with -$42.6 million in delegate agency appropriations and -$4.4 million in professional and technical services.

ARPA Allocations

The city budget does not typically break down budget appropriations to the programmatic level. However, this year the Office of Budget and Management has made available a new ARPA dashboard and associated datasets that detail the allocations, obligations, and expenditures made towards ARPA-funded programs.

As of October 28, 2024, when the city's new ARPA dashboard was made available, DoH had $368,457 in allocated ARPA funds, of which $338,421 have been allocated and spent. All DoH ARPA spending went towards management and administration, with no DoH-specific programming in the ARPA dashboard.

ARPA funds must be obligated by December 31, 2024. The city can obligate funds by entering a contract, order for services, or similar award or transaction; by entering into an interagency agreement; by dedicating the funds to certain personnel costs for positions that existed and were filled prior to December 31, 2024; or by using them to cover the legal or administrative costs of ARPA itself.

As of the October 28, 2024 data, the city had allocated roughly $1.9 billion in ARPA funds, of which 91.8%, roughly $1.7 billion, had been obligated.

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