CHICAGO -- The entire board of the Chicago Housing Authority has resigned, dumping the nation's second-largest housing agency -- and widely considered the most troubled -- in the lap of the federal government.
The Department of Housing and Urban Development will take control of the city's 40,000 public housing units at 5 p.m. Tuesday in the largest-ever federal takeover of a housing agency.
"As we went around the country inspecting public housing, Chicago really stands out," Housing Secretary Henry G. Cisneros said yesterday. "It's fair to call it the largest troubled public housing in the country."
In a blunt acknowledgment that the housing authority was out of control, the board, including its nationally renowned chairman, Vince Lane, resigned late Friday afternoon, symbolically turning over the keys to some of the nation's most notorious projects along with the headaches they have long represented.
Even in a city accustomed to political intrigue and back-room deals, the resignations took residents by surprise. Yet, the takeover appears to have been in the works for weeks if not months.
Mr. Cisneros said yesterday that Mr. Lane had requested a HUD "recovery team," a group of housing experts, be sent to Chicago to help the agency chart a course out of a long list of deep troubles, including crumbling buildings, soaring crime, broken elevators and the loss of millions of dollars in the theft of pension funds from the agency.
HUD had threatened to take over the Chicago Housing Authority before, most recently in 1987. But Harold Washington, who was mayor then, bitterly opposed the plan and kept the agency under local control.
Earlier this month, Mr. Cisneros came to Chicago to discuss the latest plan with Mayor Richard M. Daley, who, unlike Mr. Washington, did not resist a federal takeover. "I think the mayor is frustrated at the slow progress," Mr. Cisneros said.
The next day, Mr. Cisneros met in Washington with Mr. Lane, who also agreed to the plan, Mr. Cisneros said. Mr. Lane had told the housing secretary earlier that he had planned to step down anyway after seven years as chairman, Mr. Cisneros said.
"With Vince gone, we knew there would be a real drop-off in leadership, so we decided to move," Mr. Cisneros said. "He has done a tremendous job. He's a visionary, but the problems facing that agency are just so vast."
Joseph Shuldiner, assistant secretary for public and Indian housing, will be HUD's point man in Chicago. The former head of New York City's housing authority, Mr. Shuldiner will oversee much of the transition from local to federal control.
He will arrive in Chicago either tomorrow or Tuesday to brief Mr. Daley and to talk with residents and the staff of the authority. Mr. Daley is out of the city and could not be reached for comment.
Mr. Shuldiner said yesterday in an interview that it would be a massive job to right the Chicago agency. He said a recent study of poverty found that seven of the nation's 10 poorest urban neighborhoods were in Chicago housing projects.
The Chicago authority has also been plagued by mismanagement, according to HUD's public housing assessment program tests. On a scale of 0 to 100 with 60 a passing mark, the Chicago agency came in most recently with a score of 50.37.
"Even getting them to 60 would be a great achievement," Mr. Shuldiner said, "but we want housing authorities in the 80s."
He said that New York City's housing agency, the largest in the nation, with 180,000 units, scores in the low 90s.
Chicago's scores, however, have climbed every year since the assessment program started about four years ago. At that time the Chicago Housing Authority scored in the mid-30s, Mr. Shuldiner said.
Many of the problems pulling the authority under today have been building for decades, back to when politicians and city officials decided to segregate Chicago's poor and blacks into isolated pockets, far away from the the city's middle-class neighborhoods, Mr. Cisneros said.
"The isolation in Chicago is unique," he said. "You can drive for almost four miles along South State Street and never leave the shadow of public housing. So what we are left with is entire developments with the poorest and the most troubled."
It is uncertain exactly what HUD will do, now that it is Chicago's biggest landlord. A source close to the negotiations about the takeover said that HUD will try to expand and speed up plans already in the works to privatize the agency.
Robert T. Starks, a professor of political science at Northeastern University, said Mr. Lane could perhaps have been a better dTC manager, but "in effect he was the caretaker for the Titanic."
Mr. Starks said the HUD takeover will probably not change much for the 100,000 residents of the Chicago Authority. He said the move to privatization would primarily benefit friends and allies of the mayor.
"The poor people in that housing won't be any better off," he said. "Nobody cares about them; otherwise this wouldn't have gone on for so long."