Housing Preservation Case Studies

Case Studies

The following case studies dramatize how important it is to preserve housing in northeastern Illinois and how transformative the act of preserving housing can be.

Lorington Apartments, Chicago

The Lorington Apartments are situated across the street from Palmer Square at the northeast corner of Kedzie Avenue and Palmer Boulevard in Chicago's Logan Square neighborhood. Since 1985, residents of the 54-unit property have benefited from the federal project-based Section 8 program. This program limited each resident's rent payments to the HUD-accepted affordability level of 30 percent of each person's household income.

But as the section 8 contract was set to expire, the owner decided to sell the property. Logan Square saw a dramatic increase in condominium conversion and construction, and soon the neighborhood became one of Chicago's "hot" housing markets. Lorington tenants feared that the building could be converted to market rate condominiums, bringing an end to the property's affordability.

However, the Logan Square Neighborhood Association (LSNA) intervened on behalf of the tenants. LSNA assisted the residents in forming a tenants association and also helped to bring public, private, and non-profit partners to the table to find a new buyer for the property. It took two-and-a-half years of organizing until the campaign found a suitable buyer. The Community Builders, Inc. (TCB), a national non-profit developer and manager, agreed to purchase the building, rehabilitate the units, and renew the section 8 contract through the year 2027, thereby preserving housing for residents at the HUD-accepted affordability level. Energy-efficient appliances and double-pane windows were installed, and all major building systems were revamped to promote energy efficiency, designed to give low-income residents a break on their utility bills.

Besides LSNA, the Lorington Tenants Association, and TCB, other partners in this housing preservation project include the City of Chicago, Illinois Housing Development Authority (IHDA), and the Chicago Community Loan Fund.

Chicago Mayor Richard M. Daley declared the Lorington Apartments to be the model for housing preservation in the City of Chicago. The Lorington also serves as the marquee property for the Preservation Compact (see "Strategies and Tools" above)

Sources: Logan Square Neighborhood Association, 2008; Center for Housing Policy, 2008; The Community Builders, 2008; Urban Land Institute & MacArthur Foundation, 2008

Walden Oaks Community, Woodstock

Located in central McHenry County, Woodstock is home to Walden Oaks, a community of 192 rental units distributed throughout five buildings across 13.5 acres of land.

Generally, as housing prices increase, property values increase as well. Many new homes, priced at $300,000 and $400,000, have been built in and near Woodstock over the last few years, increasing property values in the area. As such, news that the owner of Walden Oaks had plans to sell the property caused fear that the property would be turned completely into market-rate housing and lose its affordability due to market pressures.

Hispanic Housing Development Corporation (HHDC), a well-respected non-profit housing developer in northeastern Illinois but based primarily in Chicago, purchased the property and turned it into a mixed-income project. With assistance from IHDA, Federal Home Loan Bank, Local Initiatives Support Coalition (LISC), the Enterprise Community Loan Fund, the Housing Partnership Fund and First Chicago Bancorp (formerly Labe Bank), HHDC developed the property and reserved 125 units for seniors and 25 units for low-income families. These 150 units receive assistance via the Housing Choice Voucher program. These residents pay a third of their income for rent; government subsidies cover the difference between the voucher and the market-rate rent. The remaining 42 are market-rate rental units. Housing was preserved, and affordability will be maintained through at least the year 2055.

Sources: Center for Housing Policy, 2008; Hispanic Housing Development Corporation, 2008; Office of the Comptroller of the Currency, 2008a & 2008b, Urban Land Institute & MacArthur Foundation, 2007

51st and King Drive Apartments, Chicago

Across the street from Washington Park, at the northeast corner of the intersection of 51st Street and Martin Luther King Drive, in Chicago's Bronzeville neighborhood, 96 units distributed throughout 12 contiguous buildings were in danger of losing their affordability, possibly subjecting many of its low-income tenants to an uncertain future. The properties' owner had been utilizing HUD's section 236 mortgage subsidy program to keep the buildings affordable. However, the owner had wished to retire and sell the property. The owners had become eligible to prepay the mortgage; doing this would have ended HUD's low-income use restrictions. There was fear that tenants would be forced out of the buildings to make way for conversion of the rental units to market-rate condominiums. As the buildings were built over a century ago, the buildings needed much rehabilitation as well.

Through the work of the National Housing Trust/Enterprise Preservation Corporation, the buildings were saved from condominium conversion and were preserved for low-income residents. Tenants were able to stay in their units. Windows were replaced, electrical systems were improved, and kitchens and bathrooms were renovated. Not only was the housing preserved, but now the property also has a Neighborhood Networks Learning Center that provides computer training, GED instruction, and information on practical life skills in a community where all are greatly needed.

Along with the National Housing Trust, partners included the Chicago Community Development Corporation, IHDA, HUD's Federal Housing Administration (FHA), and FHLB.