Author Archives: Rance

Partner with a workforce development intermediary to develop workforce in Woodlawn to complement all Choice work;

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The first local economic development initiative calls on POAH to partner with a workforce development intermediary to successfully develop HUD Section 3 business concern in Woodlawn for performing work on all Choice Neighborhoods construction projects, including the redevelopment of Grove Parc Plaza, development of off-site replacement housing, planned commercial developments, and any development associated with the Small Building Initiative. This is, of course, already an interest of POAH, but the formation of a partnership with an intermediary or a firm would improve the effort. One such organization is 180 Properties, a joint venture between the workforce intermediary Cara Program and Mercy Housing that provides intensive job training to hard-to-employ workers for inspecting and maintaining vacant properties.

Educate homeowners about publicly-provided acquisition/rehab loans from NSP and IDHA

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There are several subordinate acquisition and rehab loans that are also available for consideration. These could be used in conjunction with a traditional mortgage, funding the renovation work that will be completed and some portion of the original acquisition. Chart

Merge East and West Woodlawn TIF districts

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In order to align the financing mechanisms with community interests in connecting the areas west and east of Cottage Grove, the two Tax Increment Districts should be merged into one. Continued (or past) gentrification of East Woodlawn would generate a source of funds for both financing affordable housing in the stronger eastern part and also for stabilizing investments West of Cottage Grove.

Encourage de-conversion of 2-4 units back to more spacious single-family homes and two-flats

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By encouraging the conversion of two- to four-unit buildings back into fewer units, the neighborhoodÕs housing stock would be Òright-sizedÓ (without demolition) to reflect the significant reduction in density that has resulted from population loss. This action reduces the total stock of housing units, reduces vacancy, all the while providing more spacious homes that are rare commodities in a dense city. As a result, this stabilizes the market through reduction of housing unit supply, but also creates a market-oriented commodity along with the potential of obtaining a next-door lot for long-term management. This action helps restore a sense of flexibility in the housing stock. If the neighborhood experiences significant growth in the future, not unlike it did post-WWII, and vacant land proves insufficient to meet the demand for housing, these homes may be converted back to two- to four-unit buildings.

Leverage existing down-payment and subordinate loan programs

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The Small Building Initiative should leverage existing down payment assistance programs. A complex web of existing, temporary and restricted programs exist that would assist the purchase of two- to four-unit buildings. These represent strategic financial sources to be accessed by the efforts in Woodlawn. I propose that the Small Building Initiative provide down-payment assistance to two- to four-unit buildings that are moderately renovated and that are formerly vacant, in the form a 5 year forgivable loan for which households up to 120% AMI are eligible. This particular down-payment assistance is intended to fill the gap for households at 80-120% AMI, prioritize projects that renovate properties, and require continued residence consistent with existing programs. The focus of lending to two- to four-unit buildings (and not homes converted to single family homes) means that this effort will create additional rental housing as well.

S.A.L.A.D. Strategic Framework

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The thrust of the S.A.L.A.D. Approach to Two- to Four-unit Building Revitalization is combining disparate ingredients that come together in a healthy, mutually reinforcing and attractive neighborhood strategy. Those ingredients include the following: Stabilization, Advocacy, Loan Fund and Financial Assistance, Assistance and Counseling and Developing Responsibly. Removing the salad dressing makes the salad significantly less enjoyable, and less likely to be eaten. Similarly, there are five outcomes of the S.A.L.A.D. Approach, which, if met, can speak to the interests of a broad swath of stakeholders and accomplish revitalization through a mix of reinforcing objectives.

Goal IÑStabilization: A stabilized, well-functioning property market for two- to four-unit properties. This goal reflects the destabilizing influence of rampant speculation that can take hold in a high-vacancy neighborhood with under-realized potential, causing more harm than good when unaccompanied by a plan for actual improvements in quality of life. The goal goes beyond identifying the symptoms by seeking to treat the root causes of the unhealthy market of two- to four-unit properties.
Objectives:
A. More stable property taxes
B. Fewer short-sales
C. Fewer lots and demolition for new construction
D. Fewer multi-family housing units and new, spacious single family housing
E. More ready-to-renovate two- to four-unit buildings

Goal IIÑAdvocacy: Policies and organizational infrastructures in alignment with the unique challenges of two- to four-unit properties. This goal reflects the acknowledgement that changing policies and structures is important within and beyond the boundaries of Woodlawn. It envisions creative approaches to problems in the Housing Choice Voucher program, building organizational infrastructure, improving the factors that determine neighborhood appeal, and identifying supporting resources.
Objectives:
A. More active organizations in Woodlawn that specialize in two- to four-unit buildings
B. Fewer non-professionally managed two- to four-unit buildings that are 100% occupied by housing choice voucher recipients and/or that exhibit weak property management
C. Higher quality of life and stronger market demand for housing in Woodlawn
D. More sources of funding for the Small Building Initiative

Goal IIIÑLoan Fund and Financial Assistance: Adequate financial resources for investing in two- to four-unit properties for interested and current homeowners in Woodlawn. This goal reflects the extent to which bank practices limit financing by homeowners and serve as a barrier to renovating two- to four-unit properties. It envisions the expanded use of acquisition and rehabilitation financing and more availability of down payment assistance and loans for exiting homeownersÐnot simply by providing additional money but by utilizing existing resources.
Objectives:
A. More interest in and attainment of acquisition/rehab loans by for owner-occupant purchases
B. More interest in, availability of, and attainment of down payment and subordinate loans for owner-occupant purchases of two- to four-unit buildings in Woodlawn
C. Greater access to renovation loans for two- to four-unit buildings in Woodlawn

Goal IVÑAssistance and Counseling: Adequate technical assistance and counseling for investing in two- to four-unit properties for interested and current homeowners in Woodlawn This goal reflects that prospective homeowners have personal, financial and technical barriers to homeownership. It envisions the expansion of this infrastructure within the boundaries of Woodlawn for the benefit of new and future owners of two- to four-unit properties.
Objectives:
A. Greater access to pre-purchase and consumer credit counseling in Woodlawn
B. Greater access to technical assistance in the design-and-build process for two- to four-unit buildings
C. More participation of both owner-occupant and investor owners of two- to four-unit buildings in landlord management training and certification

Goal VÑResponsible Development: Current residents have pathways to build wealth through local economic development and pathways to homeownership, while diverse rental products and necessary amenities attract newer (moderate income) residents. This goal reflects, most directly, the importance of considering equity in planning for the neighborhood. Balance must be sought in attempting to compete for external residents as well as cultivating homeownership within the neighborhood.
Objectives:
A. More steering of development jobs to residents and tenants
B. More rental housing for low-income households (60-80% AMI) that incorporate pathways to homeownership
C. More financial capital for strong developers of rental two- to four-unit buildings
D. More retail amenities

Promote 3-1-1 for requesting public services

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The first recommendation involves continuing education for residents on ChicagoÕs existing 3-1-1 infrastructures teaching how to make a host of non-emergency requests, namely filing a police report after a crime has occurred and the offender has gone, i.e. property theft, noise disturbances, and property/automobile damage (Chicago CAPS, 2013).

Augment TIF-NIP renovation financing through joint loan loss guarantee

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While supporting new homeowners is one focus, another focus must be allowing current owners to upgrade their homes. Supporting their ability to refinance allows them to invest in their buildings as well, further upgrading the neighborhood. Several options exist. First, homes can be refinanced through the 203(k) loan program. Second, the TIF-Neighborhood Improvement Program has begun or will soon begin to provide renovations for existing homeowners covered by the West Woodlawn TIF, up to $22,500 for a 4-unit building, with up to 30% available for interior repairs that are health and safety related. Finally, NHS of Chicago also provides renovation loans. Facilitating greater access requires publicizing these existing opportunities, and possibly leveraging the TIF-NIP program with additional funds.

Perform outreach to two- to four-unit building landlords to get training;

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Many other landlords will not be covered under these requirements and should be encouraged through other means. Free courses in Woodlawn with a proof of membership in the Homeowner Association or Block Club can be offered to those landlords who sign a code of conduct and/or participate in no-fee rental registration program with the Small Building Initiative. Despite the lack of explicit enforcement, this will create public information about available rental housing and provide standards for enforcing community norms.

Partner with other neighborhoods to use NMTC program to get construction loan to rehab two- to four-unit properties for sale or rental

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A second more expansive local economic development initiative would develop for-sale housing with New Market Tax Credits that has been demonstrated in Ohio. Examples include the Columbus Housing Partnership that weathered the recession in 2008, and previous projects by Vintage Development Group and Zaremba, Inc., in Cleveland. By providing a construction loan to a business located in a qualifying low-income census tract, tax credits can be used to finance the development of for-sale housing (Anderson, 2008). Because of the necessity of having a large project to raise capital using tax credits, the focus would need to expand beyond the approximately 200 two- to four-unit homes in Woodlawn to include homes in additional communities. There would also need to be a qualifying developer located in Woodlawn with sufficient capacity to take on the construction loan, which presents an easy tie in with the expansion of local Section 3 business concerns. This would present a systematic way to leverage large amounts of capital at discounted rates and capture the economic development impacts for the benefit of residents.