The many boarded-up or vacant apartment buildings in the Austin neighborhood are deceiving. Far from being a sign of continued decay in the West Side community, those seemingly derelict buildings signal a revival.
”I was worried when I first saw all these buildings being boarded up around here,” said Tom Jackson, a 25-year resident of Austin. ”I really thought it meant trouble. But when I realized they were all being boarded up by new owners who intended to rehab them, I looked at it a little
differently.”
Jackson is in a position to know. A loan officer with Community Investment Corp., Jackson has loan applications on his desk for at least a dozen rehabilitation projects in Austin and has already approved funding for several others that are underway.
”I`ve seen these buildings in their prime, and even though the single-family housing is still not bad, the multifamily has just gone downhill,”
Jackson said. ”But I have been amazed over the last six months at the number of people getting involved in this area. We`re seeing a dramatic amount of interest in Austin.”
Austin is bounded by the Chicago & North Western Railway tracks on the east, Roosevelt Road on the south, Austin Boulevard (to North Avenue) and Harlem Avenue on the west and the Chicago, Milwaukee and St. Paul tracks on the north. It abuts suburban Oak Park to the west.
Community Investment, a not-for-profit mortgage banking firm that administers the neighborhood lending programs of 20 Chicago-area banks and savings and loans, has targeted Austin for additional multifamily
rehabilitation lending.
”We`re very excited about the amount of rehab currently underway or that is expected to be underway in the next year or two,” said Ald. Danny Davis
(29th), whose ward includes part of Austin. ”Austin is on the upswing because a lot of people have invested a great deal of time and of themselves to turn this neighborhood around.”
But the interest in residential renovation is not limited to local developers and funders. Jackson said investors from as far away as
Philadelphia and Oklahoma City have been seeking Community Investment`s assistance in putting together rehabilitation deals involving 100 to 150 units of multifamily housing in the neighborhood.
The almost overnight emergence of Austin as a prime neighborhood for rehabilitation is explained in part by the federal tax credits that are available for developers of low-income housing.
Developers and investors say that a neighborhood like Austin, which despite its slide toward poverty in the 1960s and `70s retains a strong base of homeowners and a solid stock of multifamily property, is one of the few in the country in which the complicated tax credit can be used successfully.
”My dad used to take us for Sunday drives in Austin in the `50s,” said developer Robert King, principal of Carroll Properties Inc., who grew up in the East Garfield neighborhood. ”I would marvel at the buildings and at the neighborhood`s character.
”Austin`s gone through some changes since then; in the last 10 years especially there has been severe deterioration. But the housing stock is still substantial. I think it was the remembrances of what Austin was like that drew me to the area.”
King has purchased five buildings with 175 units along Washington Boulevard and plans to rehabilitate them into the Boulevard Commons apartments for lease to federal rent subsidy holders. He has three other Austin rehabilitation projects that are pending.
But while the tax credits explain the national attention, they are not as important to people like King already working in the neighborhood as Cook County`s tax reactivation sale, held at the end of 1987, which allowed developers to acquire without a cash bid abandoned or deteriorating buildings that had become tax delinquent.
The County Board began the program in 1983 at the urging of not-for-profit community groups who argued that their rehabilitation dollars could go farther if they did not have to pay the back taxes on the parcels. Because of a legal challenge to the program, no sale was held in 1985.
Renovation activity got a second boost in June when the County Board passed a tax incentive program proposed by Assessor Thomas Hynes that reduces the tax assessment on qualified multifamily rehabilitation projects of seven or more units from 33 to 16 percent of market value.
To receive the incentive, owners must rent at least half of the rehabilitated units at below market-rate rents and must agree to substantially rehabilitate at least three of the primary mechanical systems of the building. Rehabbers must apply to the assessor`s office prior to beginning the work.
”It`s hard to say, sitting here in the neighborhood, what caused this sudden change so that now we have all these developers in here,” said Saundra Swink, executive director of People`s Reinvestment and Development Effort
(PRIDE). ”It`s a total surprise to everyone.
”A year and a half ago, PRIDE was the only group doing development in South Austin. We had seen more and more interest in the area, but no one was prepared for what happened at the tax sale last fall.”
Formed in 1981 as a not-for-profit community group, PRIDE in its first seven years rehabilitated about 250 units of multifamily housing in 10 buildings. But the group hopes in just the next 2 years to renovate about the same number of units in 12 buildings it acquired at the tax sale.
”We`re continuing our pace of development and actually kicking it up a few notches, since we`re bigger than we were four years ago,” she said.
”It`s how I feel we`ve been a catalyst for the increased activity in the area.
”But I can`t say we`re prepared for all this development. It wasn`t on the Austin agenda. I think we can serve as a voice that will demand that people coming in here be fair and equitable to the people who live here now. We want to push for a policy of anti-displacement.”
Developers say prices have been rising in Austin and that market-rate rents will have to rise as well when the buildings are renovated. Jackson cited the example of a burnt-out vacant building on Central that is on the block for $200,000, which Jackson said would have been worth only $40,000 on the market before the recent wave of renovation.
”Until two years ago, nobody wanted these buildings,” said Joe English, president of Oak Park Real Estate Inc., who has lived in Austin`s historic district for 19 years. ”Suddenly, the West Side of Chicago is where people nationwide are coming to do this kind of rehab and to learn how to do this kind of rehab.
”This is a good block and a good location,” said English outside the 40-unit building he is renovating at 5113-23 W. Washington Boulevard. ”It`s a shame to have the homeowners trying so hard to keep up their property and community and watch as a building like this that really dominates the block deteriorates.”
English, who owns five other buildings on the West Side, was an early believer in Austin. It was more than two years ago when he first agreed to buy the 5113 building, but the closing was delayed as financing was lined up with the Illinois Housing Development Authority and Section 8 rent subsidies were obtained from the federal Department of Housing and Urban Development.
That kind of complicated financing will allow English to hold rents for one-bedroom apartments to $280 to $300 a month, where a market-rate deal would have produced rents closer to $500. The same kind of fiscal gymnastics face most of the other developers attempting affordable multifamily rehabilitaton throughout the city.
The South Shore Bank, which has been credited with aiding the revival of the South Shore neighborhood through its community reinvestment philosophy, is another of the newcomers bringing innovative development to Austin.
While a new banking facility is under construction at Laramie Avenue and Harrison Street later this year, the bank`s housing redevelopment arm, the Neighborhood Institute, will embark on plans to renovate as many as 600 apartments in the neighborhood. The first 160 units in 6 buildings are expected to be under construction by the end of the year.
”We only target the very, very bad buildings,” said Dorris Pickens of the Neighborhood Institute. ”They are not projects that market-rate developers would touch. But we figure that if we do those buildings then others will see they can afford to rehabilitate buildings that can take a little less.”
The Neighborhood Institute combines money from the state development authority, second mortgages from the city of Chicago, capital from the Chicago Equity Fund, involvement of City Lands Corp.-another South Shore subsidiary-and local partners in Austin to put its deals together.
Community Investment operates in much the same way. It combines its own below-market mortgages with secondary city loans and renovation money from the Chicago Energy Savers fund to keep developers` costs and rents down.
Others who have jumped on the Austin bandwagon include SAMCOR, a city-funded economic development group that owns several commercial properties along Madison Street as well as 11 nearby apartments; and Circle Urban Ministries, which is rehabilitating the former Siena High School building into offices and is also involved in housing rehabilitation and housing counseling in the neighborhood.
The neighborhood breaks down into three basic areas: North Austin, north of North Avenue, still has a substantial population of white homeowners;
Austin Village, a racially mixed historic area where many bigger, older homes have been renovated; and South Austin, a predominantly black and multifamily area where the current renovation activity is centered.
According to the 1980 census, Austin was 74 percent black. Thirteen of the community`s 24 census tracts were 88 percent or more black. In 1970, the neighborhood had a black population of 32 percent. In 1960, only 31 blacks lived in the entire area. Austin is the largest neighborhood in the city both in terms of geographic size and population.
”But the bottom line is we have decent housing,” Davis said. ”With this activity, I would expect over the next three or four years Austin will have gotten a new face lift.
”It`s already given the spirit of the community a decent lift. It`s inspiring people who live close to the renovated properties to put more into their single-family homes or two-flats.”
Davis is aware of the national popularity of Austin. He said he has talked with developers who are interested in building in-fill housing on vacant lots in the neighborhood, perhaps new townhouses or two-flats. He also said rehabbers working in some of Chicago`s lakefront communities are turning Austin`s way.
”I think Horace Greely had an excellent idea about going west,” he said. ”You know, that there`s gold in them there hills. Well, there might not be a lot of gold in Austin, but there is a tremendous amount of development opportunity.”
