Some parts of Chicago that historically have seen a pattern of disinvestment are experiencing a significant uptick in housing prices, as a strong economy attracts investors to more areas.
“The market is moving in those neighborhoods,” said Geoff Smith, executive director of the Institute for Housing Studies at DePaul University. “There hasn’t been a great set of solutions to prevent displacement and dislocation … to slow down change and encourage neighborhoods to be inclusive.”
The new investment results in improved housing stock, along with excitement that a neighborhood could be on the upswing, luring higher-income residents and new businesses. But it also means increased risk that long-term residents are pushed out, particularly in areas on the West Side near public transportation and North Side neighborhoods where gentrification has long been a worry.
Austin, South Lawndale, and East Garfield Park are among the moderately priced neighborhoods that saw prices of one-to-four-unit buildings rise significantly between 2012 and 2017, increasing more than 21.6%, according to a new analysis prepared by the institute. Moderately priced buildings are those that sold for between $96,738 and $285,200.
Other, lower-cost neighborhoods, such as West Garfield Park, Central Park and Greater Grand Crossing, also saw significant rises in home prices during the five years analyzed. Those neighborhoods are considered emerging areas where prices are predicted to climb higher because they are near public transit, have large projects underway or are attracting more speculative investment.
Of the 270 census tracts in the city with moderately priced homes, 57 of them saw housing prices climb more than 26.1% in the period studied. Another 151 saw housing prices climb 9.5% to 21.6%.
“We know from our research, there are certain characteristics that might indicate vulnerability: Low-income households, renters, seniors, vulnerable populations might be more at risk.” said Geoff Smith, executive director of the institute. “The goal of this project is to help create affordable strategies in these kinds of neighborhoods.”
Moises Pacheco is trying to carve out such a path.
He recently made a profit of about $50,000 flipping a bungalow in East Garfield Park that he purchased, rehabbed and sold for $335,000.
Pacheco, 35, has lived in the neighborhood since 2005 with his family, after they were displaced from Humboldt Park when it became too expensive.
Now, he said, he’s dedicated to turning around houses in East Garfield Park and bringing in young people to live in the rehabbed homes. The area is ripe for redevelopment, given its sturdy housing stock and close proximity to downtown, with easy access to the CTA’s Green and Blue lines and Interstate 290.
“You still have shootings happening pretty regularly,” Pacheco said. “But it’s starting to shift now because you have a lot of new people. The thought process is that in a couple years, the crime won’t be here.”
Indeed, crime is down 20% in East Garfield Park since 2013. Still, nearly 5,000 crimes of all types have been committed in East Garfield Park since Dec.1, 2017, according to city of Chicago crime data.
Developer Jovita Baber, 50, isn’t worried about crime rates. “Crime is happening all over the city,” she said. “They focus on neighborhoods and say crime there is bad, but crime in Chicago is bad. I wouldn’t say East Garfield Park overall is bad.”
For more than a year, Baber has worked on what she calls mission-based development , buying and restoring old homes with period-appropriate materials she’s acquired and then finding renters for the properties. Baber, who lives in Logan Square, said she’s transforming transitional neighborhoods, one home at a time.
Her target market is renters who have been priced out of gentrifying neighborhoods, people like single mothers and service professionals, she said. Her business model allows her to rehab homes and make them “reasonably priced” for working people, and East Garfield Park is particularly attractive because it’s filled with families who have lived there for generations, families that she’s convinced would stay if they could find affordable, nice places to live.
“There are so many amazing things going on in (East) Garfield Park that people don’t talk about,” Pacheco said. “I’m not into flipping. It’s not good for communities.”
Pacheco is interested in marketing to longtime East Garfield Park residents too, but has found many aren’t interested. “The mindset is: Get my education and get as far away as possible,” Pacheco said. “I’m fighting with the residents to keep them here.”
As a developer who is interested in improving the neighborhood while simultaneously keeping it affordable for current residents, Pacheco said he’s also up against deeper-pocketed developers who are rehabbing homes and bumping up the prices. Two new single-family homes on the block where he recently sold a house are for sale, priced more than $60,000 higher than the selling price of his property.
“You have some houses in the neighborhood that have sold for $500,000,” Pacheco said. “It keeps pushing the price point upward where people can’t afford it anymore. That’s where the tension is.”
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