Category Archives: Strategy

Analyze performance metrics for neighborhood disparities

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The second recommendation for improving public services involves tracking the requests and the performance metrics, which are open to the public on ChicagoÕs Data Portal and likely available to the AldermanÕs office in more detail. The type and total number of requests to different departments can be analyzed across community areas, as well the percentage of service requests that have been completed, average number of days to complete and spatial clustering. This analysis can serve as important evidence for disparities that surface across neighborhoods, inspiring practices for creative improvement by agencies using a clear set of performance indicators (Behn, 2006). As an example, the Data Portal provides daily requests to the Sanitation department, included in the screen shot below, listing opening date of the request and the completion date (if applicable), which can be transformed into a new variable: ÒDays to Complete.Ó This new variable can be analyzed across the community area with standard spreadsheet software.

Chicago Service Requests for Sanitation Complaints (graph) Source: City of Chicago, 2013

Comparing average days to complete a request and the level of poverty across community areas reveals there is no a clear relationship between the two factors. WoodlawnÕs average length of completed requests is longer than many other communities, but not much longer than communities with a comparable socioeconomic condition. This sample analysis could, for other factors, substantiate the anecdotal evidence of quality of municipal services. It may also support other explanations for the lack of satisfaction, such as the amount of service requests made per capita.

Average Days to Close 3-1-1 Sanitation Complaints (by Community Area and Poverty Rate) (Graph) Source: City of Chicago, 2013

Partner with NHS or other nearby pre-purchase assistance to advertise services in Woodlawn

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The most basic assistance that prospective homeowners need is pre-purchase counseling, a requirement of the more effective first-time homeownership programs and an important method of reducing the incidence of foreclosure. A network of providers associated with NSP serves as a resource for this work, including Agora Community Services, Genesis Housing Development, Greater Southwest Development Corporation, and the downtown-based Neighborhood Housing Services of Chicago.

S.A.L.A.D. Theory of Change

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Theory of Change
In order to address issues in both the homeownership and investor markets for two- to four-unit buildings, the Small Building Initiative should resist the urge to focus entirely on homeownership or rental housing. In fact, this is a false choice because a newly renovated two- to four-unit building adds rental housing even when bought by homeowners. By working to promote homeownership, namely addressing the market-oriented challenges that work against it, and supporting stronger and more neighborhood-minded developers and landlords through financial and non-financial means, Woodlawn can anticipate some material improvements in the housing values and vacancy associated with the market for two- to four-unit buildings. Pursuing changes to the non-vacant housing stock will also make important strides in improving the market for vacant properties.

Planners in Woodlawn should seek to revitalize through market-means, making actions that are directly tied to a stronger market where purchases, investment and leasing are more prevalent in the two- to four-unit building market. This is not to detract from the importance of demand-side (or supply-side) subsidies that facilitate income transfer and social welfare, but it stresses the importance of conditions that allow additional market transactions to take place. The targeting of efforts on specific blocks and the anchoring of work on existing strong blocks can create stronger sub-markets in surrounding areas. Successful development in tax increment districts will create future flows that can be leveraged for investment today./n
In addition, paying close attention to the relationship between general neighborhood health and the two- to four-unit building market is important. Making Woodlawn an area where people desire to live for several reasons will improve the two- to four-unit building market. These are not entirely economic factors, but they are just as important to reducing vacancy in the building stock. Enhanced public safety, higher quality of life and retail amenities will highlight the neighborhoodÕs various assets, overcome the challenges, and reverse the population loss that contributed to neighborhoodÕs decline./n
Building neighborhood consensus around better rental housing within two- to four-unit buildings and local economic development that builds wealth for existing residents will facilitate an equitable strand of revitalization. For example, rental housing with shallow subsidies and effective property management, and potentially housing that actively transforms tenants into homeowners, can tie the income diversification goals of homeowners with the goals of maintaining housing affordability. Expanding efforts to target construction work to local residents generates wealth and can lead to incumbent upgrading that will alleviate poverty and lead to other gains by existing residents rather that simply pushing poor people into other communities, a common consequence of unbalanced gentrification./n
Lastly, a multi-faceted approach is best for addressing the multitude of issues present in the two- to four-unit market, one that acknowledges the importance of synergy. Destabilizing factors in the market that artificially lower property values create gaps that must be filled by capital, gaps that are increased by the absence of homeownership education and counseling that enable households to adequately save and otherwise prepare for ownership. Incentives created by public policies may favor patterns of development that prompt community concern and opposition, and policies meant to improve urban markets may succeed in addressing one segment of challenges at the risk of neglecting others. This includes demolishing buildings to stem the drug trade, only to introduce more vacant land in the market that weakens the property values of nearby residents.

Joint participate in loans to non-profit developers, for-profit developers and joint ventures for developing two- to four-unit buildings into rental housing (with eventual for sale)

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To address the gap in financing that exists for rental housing developers of two- to four-unit buildings, the Small Building Initiative should jointly participate in providing loans to non-profit developers, for-profit developers and joint ventures of the two. Identifying an experienced non-profit to develop homes under the 203(k) loan program would be difficult, potentially even more so with the requirement that all homes are limited to 80% AMI. Rent-to-own strategies for 80% to 120% AMI would be eligible for these additional loans. Support of for-profit developers would be accompanied by safeguards that require effective property management and Fair Housing for Housing Choice Voucher recipients. The inclusion of joint ventures can allow non-profits to gain development experience in partnership with for-profit partners, a practice that was effective in Philadelphia (Kromer, 2000). Providing developers better access to financing will encourage the participation of more financial intermediaries, who are useful for shifting investment strategies from generating cash flow to creating long-term asset growth.

Perform traditional long-term land banking

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Another step, which is an explicit goal of the Land Bank, is to procure and hold land in Woodlawn and set clear signals to the market that the land will not be developed anytime soon. This prevents the threat of new construction from intimidating housing renovators. The Land Bank would serve as a much better manager of the land and buildings for the Building Department than when it undergoes demolition and city ownership, given that the Land Bank actively plans for how each vacant building or newly leveled lot will be used.

S.A.L.A.D. Implementation Considerations

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The first implementation consideration is the basis for which political capital can be expected to enable the strategyÕs breadth and ambition. Among other recommendations, the strategic plan calls for changes to the Chicago Housing AuthorityÕs implementation of the Housing Choice Voucher program. This may, in turn, require changes to HUD rules governing the program, placing pressure on departments that provide core city services. It seeks the attention of the Land Bank Authority that has just created its governing board in January 2013. However, there is at least one reason why I believe that Woodlawn, one of 77 Community Areas in Chicago, should be able to attract a high level of political support: the Choice Neighborhoods Initiative. The City has committed to making a not insignificant financial investment and to transforming the neighborhood. Indeed the DHED is a co-implementation partner in the endeavor and reportedly the entity that pushed for the Small Building Initiative in the Choice NeighborhoodÕs application. Moreover, given the CityÕs well-documented reliance on HOPE VI funds, they are invested in ensuring success for the programÕs replacement and should support its component strategies that include a focus on two- to four-unit buildings. For these reasons, there is ample political support available for the various recommendations in the strategy.

Secondly, while this chapter serves to illustrate both existing ideas and new proposals to address the problems identified, Appendix I organizes the recommendations into primary and secondary sets of priorities. The primary category consists of recommendations from stakeholders and newly generated recommendations anticipated to have a high impact using relatively few resources. Secondary priority recommendations may be more creative approaches, particularly difficult to implement or simply less promising for the respective objective. Next, the first priority recommendations are organized into low and high-effort, identifying those that are low-effort as Òeasy winsÓ which should precede tackling those deemed high-effort.

Elevate the Network of Woodlawn

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This recommendation involves the positioning of the Network of Woodlawn and its affiliates as the neighborhoodÕs leading community organizations, making sure they are seen as representative of all residents. This would require seeking stakeholders who may be less enthusiastic in their support for the organization and its base of support and directly speaking to their concerns. The most pressing complaint is the level of independence from Dr. Byron BrazierÕs leadership. A board that was sufficiently representative of the entire neighborhood and an organization that was guided by true consensus should provide an enhanced sense of legitimacy. In addition, the organization needs to be sufficiently staffed and resourced, including the hiring of a coordinator of Economic Development whose portfolio will include housing revitalization.

Develop approved list of 203(k) consultants, providing workshops to promote more capable consultants to become certified

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Another critical form of technical assistance would help prospective homebuyers, who are not construction experts, but who are open to acquisition and renovation of two- to four-unit buildings. Low-cost finished homes in the market are in large supply, so acquisition and rehabilitation must provide value that cannot be found elsewhere with as little burden as possible. Hopefully, these homes are less costly than finished homes and provide a homebuyer the added value of being able to design a home to suit oneÕs particular needs. This process, however, hinges on competent and trustworthy general contracting. There are three approaches considered that could provide this form of technical assistance to potential homeowners in Woodlawn.

The Small Building Initiative could take on the role of passive intermediary (and perhaps incubator), taking no direct business interest in the 203(k) consulting process. The Initiative could host workshops for successful contractors to become 203(k) consultants and establish a list of Òpreferred consultantsÓ based on quality control that it would use for directing homebuyers. This strategy does not involve a source of revenues for the Initiative, but it also involves very little financial expense and risk beyond administrative overhead.

Based on the expressed preferences for supporting local developers and the need for flexibility, it is advised that a construction manager be hired than can serve as a 203(k) consultant to assist several homes through the construction process during start-up phase. This manager will also perform general administrative functions and transition the Initiative to serving as a more indirect intermediary ÒsponsorÓ of local 203(k) consultants.