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How Obama and Valerie Jarrett Helped Launch Their Political Careers in an Outrageous 'Urban Renewal' Scheme

Developers and investors got rich on a project that destroyed the homes of thousands of Chicago's poorest black residents.

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Rezmar collected millions in development fees but fell behind on mortgage payments almost immediately. On its first project, the city government agreed to reduce the company's monthly payments from almost $3,000 to less than $500.

By the time Obama entered the state senate in 1997, the buildings were beginning to deteriorate. In January 1997, the city sued Rezmar for failing to provide adequate heat in a South Side building in the middle of an unusually cold winter. It was one of more than two dozen housing-complaint suits filed by the city against Rezmar for violations at its properties.

People who lived in some of the Rezmar buildings say trash was not picked up and maintenance problems were ignored. Roofs leaked, windows whistled, insects moved in.

"In the winter I can feel the cold air coming through the walls and the sockets," said Anthony Frizzell, 57, who has lived for almost two decades in a Rezmar building on South Greenwood Avenue. "They didn't insulate it or nothing."

"Affordable housing run by private companies just doesn't work," Mahru told the Globe. "It's difficult, if not impossible, for a private company to maintain affordable housing for low-income tenants."

Most of Rezko and Mahru's buildings have since been foreclosed upon, forcing the tenants to find new housing.

When Obama opened his campaign for state senate in 1995, Rezko's companies gave $2,000 on the first day of fundraising, and as the Globe points out, essentially "seeded the start of Obama's political career."

While Obama eventually distanced himself from Rezko, he maintained close ties to other developers. Jarrett became a close adviser, and Obama chose Martin Nesbitt, chairman of the Chicago Housing Authority, as his campaign treasurer. Nesbitt was one of the key overseers of the shift toward private management and development. And Obama kept the rich families around him.

From the Globe story:

As a result, some people in Chicago's poorest neighborhoods are torn between a natural inclination to support Obama and a concern about his relationships with the developers they hold responsible for Chicago's affordable housing failures. Some housing advocates worry that Obama has not learned from those failures.

"I'm not against Barack Obama," said Willie J.R. Fleming, an organizer with the Coalition to Protect Public Housing and a former public housing resident. "What I am against is some of the people around him."

Jamie Kalven, a longtime Chicago housing activist, put it this way: "I hope there is not much predictive value in his history and in his involvement with that community."

In a 2012 Harpers magazinearticle, Ben Austen writes that the area around Cabrini-Green no longer resembles the neighborhood he remembered from his years growing up in Chicago in the '70s and '80s.

Down the street from 1230 N. Burling stood a mixed-income development of orange-bricked condos and townhomes called Parkside of Old Town. Its squat buildings were outfitted with balconies and adorned with purple ornamentation and decorative pillars. There was a new school, a new police station, a renovated park, and a shopping center with a Dominick’s supermarket and a Starbucks. A Target was expected on the site the last tower would soon vacate. Later, I would warm up two blocks south in @Spot Café, where employees from Groupon’s nearby corporate headquarters streamed in to pay full price for lattes and panini.

Today, what seems harder to fathom than the erasure of entire high-rise neighborhoods is that they were ever erected in the first place. For years the projects had stood as monuments to a bygone effort to provide affordable housing for the poor and working-class, the reflection of a belief in a deeper social contract.

 
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