Chicago keeping migrant shelter costs under wraps

Accused of rent payments higher than market rate to prominent landlords

City of Chicago Faces Backlash Over Migrant Shelter Rent Deals
Mayor Brandon Johnson. Inset from left to right: Phil Denny, Scott Goodman and A.G. Hollis (Getty)

As Chicago grapples with thousands of unhoused migrants, city officials are taking heat for how they’re handling shelter arrangements. 

Migrants have poured into Chicago from the southern border since August 2022, prompting city officials to open shelters, particularly in the West Loop area. The number of arrivals has risen to over 20,000. Residents are frustrated over the opacity of deals the city has struck to house them, Block Club reported

The decision to open four new shelters in West Loop was made without consulting the community, residents say. The lack of community input sparked allegations that the city was favoring well-connected property owners, including Phil Denny, Scott Goodman and A.G. Hollis. 

The lack of transparency has led to calls for detailed information on rental agreements and payments.

Critics contend that the city is paying more for shelter spaces than the advertised rent for office space in the same locations. Higher costs for managing shelters, including utilities and insurance, justify the expenses, city officials have said.

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Deals to convert three former office buildings into migrant housing in the West Loop costs the city as much as $1.3 million per month, the outlet reported. The city pays $18 to $19 per bed each night to house at least 2,300 people in the West Loop shelter spaces, according to summaries provided by the mayor’s office.

That doesn’t include expenses for food and services. The city has opened 22 other shelters, mostly in privately owned buildings, with expenses undisclosed to the public.

Mayor Brandon Johnson hasn’t disclosed how the West Loop properties were chosen, leading to allegations of favoritism and a lack of oversight. The absence of a competitive bidding process has intensified scrutiny.

The shelter arrangements fall under emergency response, allowing the city to bypass contracting rules. The lack of information raises questions about the bounds of emergency authority, said Joe Ferguson, the city’s inspector general from 2009 to 2021.

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