It was an hope to be a panelist at the Woodlawn Summit. I have spent all of my real estate career active in Woodlawn, encouraging inclusive and sustainable development and investment. I am pleased to see recovery for Woodlawn on the horizon, and am committed to promoting inclusive development strategies to bring Woodlawn the reinvestment it needs while providing high quality attainable housing.
THE WOODLAWN MARKET
Woodlawn is on its way to recovery.
The graph above details the median price trend in Woodlawn (BLUE), vs. the Chicagoland Market Area (RED). The left of the chart shows the financial crisis in January 2008, and the right is market data as of Feb 29, 2020. Note that Woodlawn has not yet fully recovered from the financial crisis.
The greater Chicagoland market has returned to previous values. Woodlawn was hit more severely during the financial crisis. By January 2010, the median sale price in Woodlawn had fallen from above $200,000 to below $50,000 in the span of two years. This decline was much more severe than the rest of the market area. Recovery has been very slow, with todays values starting to show signs of stability. Thanks to lots of hard work by many activist residents, community groups, dedicated developers and non-profits, investment has started and we're seeing increased housing demand in Woodlawn.
THE RECOVERY
Many homebuyers who purchased prior to 2008 we're left deep underwater as the Great Recession set in. As a result, hundreds of homes were foreclosed and many building left abandoned. As we rebuild the market, organizations like the Cook County Land Bank, NHS, POAH and many private investors have been doing the heavy lifting of getting abandoned buildings and vacant lots back into the market inventory, allowing for redevelopment and re-occupancy. Many residential developers have started to renovated older abandoned buildings and build on vacant land, reducing blight.
This recovery is great to see, and as it moves forward we need to promote an inclusive strategy that allows for the preservation and creation of affordable rental units and attainable homeownership opportunities. We can accomplish this by paying attention to some key details:
1. Increase zoning density and create public policy to encourage not only the preservation of existing two and three flats, but allows for the addition of additional density into these properties. Currently the trend in the Chicago Market Area is to convert a two flat into a luxury single family home. This trend is the result of zoning that favors single family home development. Simply, it's much simpler to get a permit to renovate to single family than to add an additional housing unit. Obstacles like parking requirements, maximum floor area rations and density standards need to be reconsidered. If investors can add a garden unit or a "granny flat," development will favor density and we will see the creation of more housing inventory.
2. Encourage the construction of new 2-4 unit housing. Many of Woodlawns rental units are larger multifamily buildings. These buildings are easier for first time homebuyers to purchase, as the income helps them qualify for loans. It also adds high quality, well managed rental inventory to the market.
3. Encourage true affordability in the market. This means considering maintenance cost and energy usage in the building design. Developers such as Greenline Homes have engage a "net zero" approach and many of their current homes are entirely renewably powered. The latest development by them is a two unit that is renewably powered at 1219-1221 Marquette. These homes have very low energy cost, are nearly maintenance free, and have income to help a first time homebuyers qualify for the mortgage. Since new construction is expensive, it's important to consider the median income and how we can make our developments more attainable.
4. Discourage the conversion of existing two and three unit buildings to single family. This reduces the supply of rental homes and negatively impacts affordability.
