THE UNIVERSITY OF CHICAGO PRIVATIZING CHICAGO: THE POLITICS OF URBAN REDEVELOPMENT IN PUBLIC HOUSING REFORMS A DISSERTATION SUBMITTED TO THE FACULTY OF THE SCHOOL OF SOCIAL SERVICE ADMINISTRATION IN CANDIDACY FOR THE DEGREE OF DOCTOR OF PHILOSOPHY BY AMY TURNBULL KHARE CHICAGO, ILLINOIS JUNE 2016 i TABLE OF CONTENTS LIST OF TABLES .................................................................................................................vii LIST OF FIGURES ...............................................................................................................viii LIST OF MAPS .....................................................................................................................ix ACKNOWLEDGEMENTS ...................................................................................................x ABSTRACT ...........................................................................................................................xviii CHAPTER ONE: INTRODUCTION ....................................................................................1 Problem Statement .................................................................................................................1 Theoretical Overview.............................................................................................................3 Research Goals.......................................................................................................................7 Dissertation Overview ...........................................................................................................8 CHAPTER TWO: THE POLITICAL ECONOMY OF A NEOLIBERAL CITY ................10 Introduction ............................................................................................................................10 Ways of Understanding the Political Economy .....................................................................10 Political Institutionalism Theory................................................................................10 Urban Regime Theory................................................................................................13 Using Marx to Understand Neoliberal Urbanism ..................................................................18 “Actually Existing” Neoliberal Urbanism in Housing Policy ...............................................22 Creative Destruction in Public H ousing Policy .........................................................22 Urban “Entrepreneurial” Governance ........................................................................26 Federal Devolution.....................................................................................................29 Privatization ...............................................................................................................33 Commodification of Public Property .........................................................................37 ii Contestation ...............................................................................................................40 Chicago as a Case of “Actually Existing” Neoliberal Urbanism ...........................................42 Conclusion .............................................................................................................................43 CHAPTER THREE: METHODOLOGICAL APPROACH .................................................45 Introduction ............................................................................................................................45 Ethnographic Approach: Embedding of the Researcher ........................................................45 Overview of the Extended Case Method ...............................................................................49 Assimilation and Researcher Observations ...............................................................50 Case Construction and Theoretical Contributions .....................................................51 Data ........................................................................................................................................52 Interviews ...................................................................................................................52 Observation ................................................................................................................57 Document Review ......................................................................................................59 Data Analysis .........................................................................................................................60 Study Limitations ...................................................................................................................62 Conclusion .............................................................................................................................65 CHAPTER FOUR: THE POLITICAL CONTEXT OF CHICAGO’S REFORMS ..............66 Introduction ............................................................................................................................66 Brief Historical Overview of Chicago’s Public Housing ......................................................68 Transformation in Policy Frameworks ..................................................................................76 Urban Governance .....................................................................................................77 Devolved Authority: From Federal to Local Control ................................................87 Privatized Housing and Services ...............................................................................88 iii Conclusion .............................................................................................................................94 CHAPTER FIVE: MAYORAL POWER AND MARKET-ORIENTED REFORM ............97 Introduction ............................................................................................................................97 Mayoral Influence in Urban Restructuring ............................................................................97 Policy Priorities ......................................................................................................................102 Political Tactics to Achieve Market-Oriented Reform ..........................................................106 Financial Support .......................................................................................................106 Government Reorganization ......................................................................................111 Political Capital ..........................................................................................................115 Conclusion .............................................................................................................................123 CHAPTER SIX: FEDERAL POLICY DEVOLUTION AND LOCAL POLITICAL AGENCY ...................................................................................................................127 Introduction ............................................................................................................................127 HUD’s Moving to Work Demonstration ...............................................................................127 Political Negotiations for Local Control and Federal Subsidies ............................................130 Political Negotiations for Local Control ....................................................................130 Political Negotiations for Special Funding Formulas ................................................133 Impact of Federal Devolution ................................................................................................136 Activists’ Rise to Power.........................................................................................................146 Conclusion .............................................................................................................................151 CHAPTER SEVEN: PRIVATIZATION AND ECONOMIC CRISIS .................................157 Introduction ............................................................................................................................157 Rationales for Privatization....................................................................................................157 iv Government Failure ...................................................................................................158 Necessity of the Private Sector ..................................................................................158 Market Assimilation...................................................................................................160 Public Housing Mixed-Income Development Reforms .........................................................162 Public-Private Partnerships ........................................................................................163 Mixed-Tenure and Ownership Structures ..................................................................168 Mixed-Finance Models ..............................................................................................176 Dual Interests: Public Purpose, Profit Orientation .....................................................183 Hybrid Accountability and Conflicting Roles ...........................................................184 Privatization in an Era of Economic Crisis ............................................................................186