Tag Archives: s.a.l.a.d.

S.A.L.A.D. and the Small Building Initiative

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Potentially the most important topic that has been largely unaddressed is who will be responsible for managing the temporary initiative that has been described, in this publication as well in official Choice Neighborhoods grant applications, as the Small Building Initiative. While the proposed strategic plan will rely on several partners to pursue initiatives that will positively impact the 2 to 4-unit market in Woodlawn, several initiatives must and will be undertaken by dedicated staff with programmatic resources. While the question of who should compose this entity is no less important, this thesis has instead focused on creating the road map that the organization, when chosen, may adopt. Taken as a whole, the recommendations illustrate what may be asked of potential partners and the content of a request for proposals to competitively select the Small Building Initiative administrator that is most capable and willing of fulfilling the role. In the typical framework of planning, this thesis could address the initial existing conditions and strategic planning in order to provide the foundation for actual implementation.

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

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.

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.