Category Archives: Motivation for Study

Research Questions

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The motivation for this research project stems from the fact that vacant buildings pose a risk to the ability of POAH and its partners to maximize the benefits of the $30.5 million in Choice funding and the various other financial and non-financial resources.

Despite its close proximity to the University of Chicago, Woodlawn shows many signs of a distressed neighborhood. The presence of vacant housing was noticeably high before the recession, and even more foreclosures have come about due to the onset of housing crisis. Housing demand is weak in Woodlawn, in part because of safety issues and other quality of life factors. While existing efforts have sought to rehabilitate smaller buildings, either through investment from community development financial institutions, Neighborhood Stabilization Program and other governmental funds, they have not solved all the problems and, indeed, may serve as focal points for opposition from homeowners concerned about the amount of tenants with housing vouchers in thee neighborhood. Though POAH owns and manages over 8,000 multifamily units, their portfolio consists of larger (50+ unit) properties and does not currently have the capacity (nor desire) to add scattered site rental housing to its portfolio. A smaller building is a noticeably different development endeavor than 5+ unit properties, much less a large multifamily property. Smaller buildings provide much better opportunities to smaller entrepreneurs who are vertically integrated, performing construction management in-house. In addition, two- to four-unit buildings can be sold to homeowners to occupy the property and rent out additional units, just as they can be maintained entirely as investment properties.

This thesis analyzes the community and economic context around two- to four-unit properties and recommends a series of strategies to revitalization that will credibly reduce building vacancies and complement the larger investment in the neighborhood. It is the hope that this will yield helpful analysis and recommendations for POAH and other stakeholders in their long-term efforts at improving the neighborhood. In this spirit, the following questions have guided this research endeavor:

  1. What are the causes of vacancy in smaller buildings in Woodlawn?
  2. What challenges face the market for two- to four-unit buildings in Woodlawn?
  3. What existing efforts to address vacancy have existed and how have they fared?
  4. What community goals and most promising recommendations should be factored as a part of the Small Building Initiative to advance broader neighborhood improvement?

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Preservation of Affordable Housing Background

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Preservation of Affordable Housing (POAH), a 10-year old national non-profit developer specializing in housing preservation, became active in the City of Chicago in 2007 at the request of tenants of Grove Parc Plaza housing development in the Woodlawn neighborhood. Taking over the financially troubled complex, POAH initiated a multi-phase project for housing redevelopment and formulated a plan for comprehensive neighborhood revitalization. After the redevelopment process was underway, POAH received a Choice Neighborhoods grant of $30 million from HUD that is associated with a total direct investment of $272 million (which excludes some of the first phase’s investment due to timing).

Choice Neighborhoods Initiative, POAH and the City committed not only to improving housing outcomes for the existing residents, but also to implementing case management and addressing broader neighborhood needs. Part of the “Neighborhood” component calls for the creation of a Small Building Fund to promote home-ownership and address the stock of vacant buildings in the neighborhood.

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Choice Neighborhoods Background

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The Choice Neighborhoods program is a centerpiece of the Obama Administration’s Neighborhood Revitalization Initiative. Conceived as a replacement of the two-decade HOPE VI program, the program focuses is on redeveloping both public and privately-owned affordable housing and has four goals as stipulated by the 2010 Notice of Funding (HUD, 2010):

    1. Neighborhoods. Transforming neighborhoods with concentrated poverty and distressed housing into mixed-income neighborhoods with greater economic opportunity and better public amenities;
    2. People. Resident-focused improvements in education achievements and economic self-sufficiency;
    3. Housing. Providing current residents a choice between (redeveloped) affordable housing in the community as well as the opportunity to move to affordable housing in other neighborhood of opportunity; and
    4. Use of concentration, leverage and coordination of various types of funding for community and metropolitan growth.

The program reflects the all-too-often binary goals of balancing people and placed-based policies, supporting locality-based initiatives while ensuring that outcomes for current residents are just as important. It actively encourages grantees to leverage the public funds with other public funds (notably the Promise Neighborhoods Grants and Byrne Justice Innovation Grants) as well as private and philanthropic sources.

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Woodlawn Background

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Located on the Chicago’s South Side, Woodlawn is a neighborhood with a rich cultural and historical legacy. Lorraine Hansberry’s play “A Raisin in the Sun” depicts the Younger Family struggling to break the walls of entrenched racial segregation in Chicago. Hansberry based based the play on her family’s own personal and legal struggle to purchase a home in Washington Park, known then as West Woodlawn, in 1937. Woodlawn was a neighborhood where racial covenants would have legally prevented them from purchasing a home. Yet, by the premiere of the play in 1959, Woodlawn had essentially undergone the process of racial and socioeconomic upheaval (Taub, 1988).

Just across the Midway from the University of Chicago, Woodlawn has a strong legacy of community organizations such as The Woodlawn Organization (TWO). Unfortunately, it has become an unfortunate tragic tale of racial change in South Side Chicago. For several decades, much of Woodlawn has been plagued by social duress.

The recent push to improve smaller buildings in Woodlawn has grown out of efforts to redevelop Grove Parc. Grove Parc is one of the neighborhood’s affordable housing (Section 8) communities, notorious for its state of deterioration in recent years. Having grown out of the efforts to organize against University of Chicago’s Urban Renewal project, it has provided long-term affordable housing for low-income residents and an informal commitment from the University to forego expansion opportunities below 61st Street that is still in effect today. Grove Parc is the center of the Choice Neighborhoods revitalization initiative in Woodlawn.

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Introduction

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This thesis analyzes a range of market, policy, and neighborhood challenges associated with a particular housing typology—the two- to four-unit buildings in the Chicago neighborhood of Woodlawn—with the hope of developing a credible plan for contributing to the neighborhood’s health. This it accomplished through a descriptive case study of the real estate development process and supporting social ecosystem. The thesis then formulates a set of strategic options for stabilizing the local market, pursuing specific policy and community development improvements, expanding access to financial resources, improving technical and professional services for homeowners, and investing in a manner consistent with promoting improved circumstances for the widest swatch of neighborhood residents and stakeholders.

Smaller buildings in Chicago are a very important part of the housing stock, with two- to four-unit properties accounting for approximately one-third of the entire stock in Cook County (IHS, 2012a). In Woodlawn, the proportion of rental housing units in this building typology is slightly higher(IHS, 2012b). Much of this housing was negatively impacted by Great Recession, with 41% of the 2-4 buildings in Woodlawn having been impacted by foreclosure in 2005-2011(IHS, 2012a). Because of both their ubiquitous and dispersed presence in the neighborhood, these buildings are critical to the health of the neighborhood.

Since 2007, an exciting revitalization endeavor has been taking place in Woodlawn. As the lead grantee in the $30.5 million Woodlawn Choice Neighborhoods, non-profit developer Preservation of Affordable Housing (POAH), has undertaken an ambitious plan centered on redeveloping a large, distressed apartment complex in the center of the neighborhood. Under the Choice Neighborhoods initiative, POAH has been partnering with stakeholders to take on broader neighborhood-level improvements and formulate a Small Building Initiative since 2012. This research and planning endeavor is directly motivated by this Initiative, yet it intends to identify generalizable challenges, lessons, and insights that can be valuable to a range of neighborhood planners and actors.

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