The city will invest $5 million to encourage the construction of about 100 affordable homes on vacant lots in six South and West side neighborhoods still recovering from the 2008 housing crisis, the mayor’s office said Sunday.
The Building Neighborhoods and Affordable Homes program will provide up to a $60,000 subsidy for qualifying homebuyers in Englewood, Garfield Park, Humboldt Park, Lawndale, Little Village and Woodlawn. The subsidy will support the purchase of homes built through a city program that offers vacant lots for $1 to developers to construct affordable housing.
Sunday’s announcement comes just a few days after the city announced a $30 million program to build affordable housing in high-price and gentrifying neighborhoods — $5 million coming from the city and $25 million from foundations and private investment.
“This pilot program is a win-win — it will double down on the investments we are making in Chicago’s neighborhoods while turning vacant lots into new and affordable homes,” Mayor Rahm Emanuel said in a statement.
The neighborhoods were chosen in part because housing prices in these areas are not attractive to developers, the city said in a press release. And these are neighborhoods that have seen new investment, such as the retail and housing around Englewood’s new Whole Foods and Lawndale’s Cinespace Studios.
“This is about pulling every neighborhood up in terms of housing and investment, but also leveraging the significant investment that the mayor, the city and other entities have made in these communities,” said Chris Wheat, the mayor’s chief of policy.
Asked about the scale of the 100-home program in relation to Chicago’s housing market, Wheat said it needed to be placed in the context of the Emanuel administration’s other housing initiatives.
“The ability to create a large number of new homes in those communities, homes that are owned by stable, working-class Chicagoans, makes a huge difference,” Wheat said. “We did not fall into the Great Recession on one specific program or one specific initiative, and we’re not going to get ourselves out of it through one specific program or one specific initiative.”
Funding for the program will come from the city’s Affordable Housing Opportunity Fund, which collects fees paid by developers who don’t build the required number of affordable housing units.
The homebuyer subsidy will range from $40,000 to $60,000 depending on the local cost of construction and sale prices. It will be available to buyers who make up to 140 percent of the area’s median income, meaning a family of three making less than $106,680 a year could participate.
Leah Levinger, executive director of the Chicago Housing Initiative, an affordable housing advocacy group, said she’s concerned the relatively high income threshold for this affordable housing program will redirect funds that would otherwise help low-income Chicagoans to relatively well-off home-buyers. “That is not the direction I think our public resources should flow,” Levinger said.
But Bill Eager, with Preservation of Affordable Housing, welcomed the news, saying it could help meet the burgeoning demand for affordable housing in Woodlawn — the site of several development projects, including the Obama Presidential Center, which some residents fear could force prices up and push them out of the neighborhood.
The Boston-based nonprofit has developed several apartment buildings in Woodlawn.
“It could be a huge success in Woodlawn and a really smart way to balance development and address fears about gentrification,” said Eager, vice president for the Chicago area, in an email.