Chicago approves $100Mn funding boost for Favorite Healthcare Staffing

CHICAGO, UNITED STATES — Chicago Mayor Brandon Johnson recently approved a $100 million increase in funding for Favorite Healthcare Staffing, a Kansas-based company managing the city’s migrant shelters.
This move comes as the city faces a nearly $1 billion budget deficit and ongoing debates over its approach to managing migrant housing.
Controversial contract extension details
The contract extension with Favorite Healthcare Staffing has drawn criticism due to the company’s high hourly rates, which range from $50 to $156 per hour. An NBC 5 investigation revealed that Favorite routinely billed the city for 84 hours per week per employee. Even at reduced rates, this could cost $220,000 to $859,000 per employee annually.
Despite these concerns, Johnson defended the contract as essential for maintaining services while investing in other critical areas of the city.
“We’ve saved the taxpayers over $200 million based upon the work that we’ve done… There are less people in shelters because we have operationalized a system of care,” he stated.
In January, the city of Chicago also issued a $30 million contract extension with Favorite Healthcare Staffing to continue providing staff for temporary migrant shelters, bringing the total spending limit to $70.2 million.
Understanding Chicago’s migrant shelter needs
Chicago has been dealing with a substantial influx of migrants, many of whom are asylum seekers. This situation has necessitated the creation of temporary shelters throughout the city.
At the peak of this crisis, nearly 14,000 individuals were housed in these facilities. Recently, the city reduced its number of shelters from 27 to 16, with current occupancy at approximately 5,300 people.
This reduction is part of a strategy to manage resources more effectively and operationalize a system of care that Mayor Johnson claims has saved taxpayers over $200 million.
Federal funding and future financial plans
The city’s online migrant spending portal shows that Favorite Healthcare Staffing has been paid $291 million through a combination of local taxpayer dollars and federal grants. The latest contract includes provisions to recoup at least $9 million through a Federal Emergency Management Agency (FEMA) grant.
However, Johnson emphasized the need for federal assistance and questioned when the federal government would step up to address this international crisis.
Since April, when the city began enforcing its 60-day shelter stay policy, over 2,400 people have exited the shelter system. The Department of Family & Support Services (DFSS) clarified that the increased funding limit allows payment for services rendered since April 2024.
“While this is not an approval for additional funding, it will enable the City to pay for shelter services previously rendered by Favorite Health since April 2024 through next month, October 2024,” the DFSS stated.
Looking ahead: Balancing fiscal and humanitarian needs
The increase in funding brings Favorite Healthcare Staffing’s total contract value to over $334 million.
This development underscores ongoing tensions between fiscal constraints and humanitarian obligations as Chicago seeks sustainable solutions for its migrant population amidst broader national and international challenges.