The Habitat Co., a property management firm that oversees about 3,400 units of public housing for the Chicago Housing Authority, has moved to end its management agreements with the agency after almost 40 years of partnership.
Correspondence obtained by the Tribune Friday reveals that on Sept. 6, the Habitat Co.’s president, Matthew Fiascone, informed CHA that his firm was denying the authority’s request to extend the company’s property management contracts for the next year. The parties have not yet agreed on a formal end date for Habitat’s services, although a transition period will occur as CHA scrambles to secure new property managers for the 16 buildings Habitat manages.
“In recent years, we have observed significant changes within CHA that, unfortunately, have caused the good working relationship, and the collegial and respectful interaction that we once enjoyed as CHA’s private property manager, largely to disappear,” Fiascone wrote in his letter to CHA.
CHA and Habitat began their working relationship in 1987, according to a Habitat spokesperson. Habitat has worked in affordable housing development in Chicago for more than 50 years.
Out of the occupants of the about 3,400 units of CHA housing that Habitat manages, approximately 2,500 are senior citizens and 1,300 are individuals with disabilities, according to a response letter from CHA Chief Executive Tracey Scott to Habitat on Sept. 27.
In its initial notice to CHA, Habitat offered to stay on until Nov. 1 while “winding down” its management services. However, in her letter to Habitat, Scott wrote that this shortened transition period was in violation of the contracts, which allegedly require a 120-day notice for any decision to “abandon” the properties.
Scott proposed an extension of the transition period until Jan. 6, citing a “potentially disruptive impact on thousands of CHA residents and their families.”
Residents at Dearborn Homes, a 688-unit CHA development in the Douglas neighborhood, told the Tribune in August that housing conditions rapidly deteriorated after a new property manager took over from the Habitat Co. eight years earlier.
“The essence of CHA and Habitat’s relationship relates to our obligations to serve the needs of thousands of mostly senior Chicagoans who live in the CHA properties that Habitat manages,” Scott wrote. “Putting our residents’ interests above whatever grievances we may have against each other, and as a reflection of the deep and ongoing partnership between our organizations, CHA requests that we cooperate through the proposed date of January 6, 2025, to faithfully transition to new management.”
Neither party would comment Friday regarding when the end date would be, with a Habitat spokesperson claiming that it is still under negotiation.
A spokesman for CHA wrote in an email to the Tribune on Friday that the agency is “actively working to secure new property managers” to take over once Habitat’s services end, adding that the CHA does not anticipate an “adverse impact” on residents. He also wrote that CHA is currently communicating with residents of Habitat’s buildings regarding the upcoming changes, and plans to host resident meetings “when new property management teams are identified.”
In his Sept. 6 letter, Fiascone criticized CHA for “significant non-performance” of its obligations, citing the agency’s alleged demands that Habitat agree to obtain its own liability insurance for the properties it manages. He states that it would be “customary in the residential property management world” for CHA to cover Habitat under its own insurance program, adding that Habitat had “made very clear” that it would never agree to any contract where this was not the case.
Fiascone also alleges in the letter that CHA failed to properly communicate with Habitat while trying to extend the agreements for all 16 of the properties it manages, sending the request for an extension to an administrative assistant who was out on leave instead of Habitat’s senior leadership. The Aug. 31 expiration date then passed before the request made its way to the relevant individuals at Habitat, Fiascone wrote.
However, even if CHA had successfully requested a renewal before the deadline, Fiascone wrote that “it would have been ineffective” due to existing problems that “have also led Habitat to determine that it is not willing, or required, to continue to manage CHA properties.”
In CHA’s response, Scott admitted that the agency had sent its extension request to “the wrong person,” stating that it was an “oversight.” She did not respond to Fiascone’s specific criticisms of CHA’s allocation of insurance coverage responsibilities.
The Habitat Co. declined to comment further on Friday regarding the specific reasons behind its termination of its property management relationship.
“For many years, our partnership with the CHA was mutually beneficial and an advantage to the residents,” a company spokesperson wrote in an email to the Tribune. “However, given the current challenges at the CHA, we no longer believe this partnership is in the best interest of Habitat or the residents.”