Housing crucial to building wealth in Chicago’s distressed areas – Crain’s Chicago Business

On the West Side in North Lawndale, community organizers have ambitious plans to build hundreds of affordable homes but struggle to line up low-cost construction loans. A partnership of United Power for Action & Justice, the Lawndale Christian Development Corp. and Chicago Neighborhood Initiatives raised $12.5 million to start construction but needs to double that amount so it can reach a critical mass of 100 homes. “We need the banking and philanthropic organizations to contribute so we can build at scale,” says Richard Townsell, executive director of Lawndale Christian.

Experts say better access to credit is needed to enable landlords and homeowners to upgrade properties. Housing advocates say loans and grants from American Rescue Plan Act funds can be channeled to small operators for building upgrades in a simplified, streamlined process. Shared ownership, in which local residents pool their capital to acquire property, could be a way to return control to the neighborhoods, activists say.

“We used to build housing for working people, and we don’t do that anymore,” says Nick Brunick, an attorney at Applegate & Thorne-Thomsen who specializes in affordable housing.

Upgrading two-flats

The South Shore neighborhood is known for its variety of distinctive architectural styles from the early 20th century, including Prairie School and art deco. Like other South Side neighborhoods, South Shore saw a demographic shift from 90% white in the early 1960s to 94% Black by 1980.

Entrepreneur Alisa Starks recalls that when her family moved into South Shore in 1965, “we got dressed up to go to 71st Street.” Students in her kindergarten class were mostly white, but that reversed by the time she got to eighth grade. “Property owners left, businesses left, there was instant devastation,” she says. The median income in 2019 was $34,215, according to IHS Data Clearinghouse, compared with $60,438 for all of Chicago. One-third of the population is below the poverty line, as compared with 18.4% for Chicago, according to the Institute for Housing Studies at DePaul University.

To the southwest, the Chatham neighborhood also experienced white flight, but it evolved into a middle-class African American area, home to famous businesses that include Johnson Products and Seaway Bank. The population has declined from a 1970 peak, and the businesses were sold. Median income in 2019 was $38,208, according to IHS Data, and nearly 27% live in poverty. It has relatively more single-family homes compared with South Shore.

These neighborhoods have what analysts call “naturally occurring affordable housing.” That is, they’ve yet to encounter the gentrification of neighborhoods like Logan Square and Albany Park, where rising rents threaten to displace longtime residents and there’s demand for subsidized housing to keep housing costs affordable.

In South and West Side neighborhoods, the challenge is how to upgrade the thousands of two-flats, four-flats and small …….

Source: https://www.chicagobusiness.com/equity/housing-crucial-building-wealth-chicagos-distressed-areas