Block by Block neighborhood stabilization?

[untitledreality]

In the hopes of stirring up a little activity in the forum, I thought I would start a discussion on a topic that I have always quietly pondered when riding through various neighborhoods in Chicago and browsing the MLS.

Is the idea of block by block mass acquisition and redevelopment by the private sector a viable method for neighborhood stabilization, or dare I use the G-word, gentrification?

With collapsed property values effecting all neighborhoods, some very little, others decimating, it seems that the ability for a sole investor, or perhaps a group of like minded individuals, to embark on a plan to acquire and convert the fringe through a block by block process would have some traction. With so many neighborhoods filled with vacant lots and neglected buildings for sale in the sub $100K range would a strategy of redeveloping in compact, fringe adjacent areas be a means slowly, progressively turn a neighborhood around?

The areas I see best fit for a less venturesome transition would be the North Kenwood/Oakland area seeing how it is already slowly growing and property is still readily available for bargain prices. (greystones for under $150K, standard lots for under $25K). Add to that its relative isolation from other neighborhoods, easy transit access, easy access to Hyde Park amenities and easy access to the lakefront make it rather attractive in my opinion.

On the other side of the coin would be undertaking East Garfield Park. I realize that there is not a stable area, or even fringe area to latch onto when you are looking at this area, but there are ways in which you could select a few isolated blocks in attempt to create a stronghold and grow from that zone. Sort of like completing the corner of a puzzle first then working your way out. Fitting this would be the area bounded by the Park on the West and South, Homan to the East and the railroad embankment to the North. While there are not a ton of listings in the immediate area right now, there is easily 30 vacant lots and homes with list prices for less than a Kia.

It would take a large commitment to pull off the EGP stabilization, and would be even harder to find urban pioneers willing to go that far into the bush, but the area has tons of potential.



So am I just a hopeless optimist? Or does anyone believe that block by block mass acquisition neighborhood stabilization by the private sector is possible? Any neighborhoods that anyone thinks would be well suited? Anybody want to invest in bullet proof vests, ballistic glass and go buy some EGP property with me?

[Chitownwest]

Im not sure that the private sector has the resources to start gentrification but I do think it can start stabilizing neighborhoods. Gentrification requires a larger effort on the part of politicians, community leaders, large businesses,etc.

I just bought a house for 20k this year by Columbus Park in Austin and put some sweat equity and another 30K into the property and its a beautiful thing. The block is already starting to change and I have seen a quick return on the investment already this year. It was four vacant/foreclosed houses on the long block and now its just two. There are some decent areas within these neighborhoods, usually as you said bordering other more desirable areas. The trick is getting as close as possible to a solid area, for example finding a foreclosed home one to three blocks away from Hyde Park. For Austin it would be Oak Park.

[untitledreality]

Originally Posted by Chitownwest

I just bought a house for 20k this year by Columbus Park in Austin and put some sweat equity and another 30K into the property and its a beautiful thing. The block is already starting to change and I have seen a quick return on the investment already this year. It was four vacant/foreclosed houses on the long block and now its just two. There are some decent areas within these neighborhoods, usually as you said bordering other more desirable areas. The trick is getting as close as possible to a solid area, for example finding a foreclosed home one to three blocks away from Hyde Park. For Austin it would be Oak Park.

This is exactly what I am talking about. Only imagine if you all four homes on the block were purchased and renovated at the same time by like minded individuals... then continue to extrapolate by slowing expanding a dense cluster of invested community members until the area starts to stabilize.

Even in a weak housing market good neighborhoods within the city still command relatively strong valuations compared to the rest of the city... often squeezing the middle class out of ownership. To me this is a waste of Chicago's second greatest asset, its shear size. Given the amount of property in the city, there is no reason that someone with a $200K budget shouldn't be able to purchase a SFH... if only there were safe/stable options beyond a few pricey enclaves.

[paytonc]

That's pretty much how the process works, yes. It's typically not quite as organized, though.

It either takes a lot of capital or a lot of patience or both. CDCs often have the latter, and some developers have the former. Sometimes you'll read about single developers who end up controlling much of a neighborhood -- whether it's the U of C in Hyde Park or the Podmajersky family in East Pilsen or Goldman Properties in South Beach or Bart Blatstein in Northern Liberties or heck, the Maharishi's people in Fairfield, Iowa. The public sector also does this sometimes, like the land bank in Flint.

However, getting clear title to just one piece of land in a distressed neighborhood can be challenging enough -- much less getting a bunch of properties on one block. That's why condemnation is so useful for redevelopment projects. Once you've got title, fixing something up always holds surprises and takes more time and money than you think, in an environment where financing is scarce and no one has enough time.

[mohammed wong]

I think the foreclosure process is helping actually to some degree with neighborhood stabilization, I know it has in my case.

We own a 6 flat in RP, attached to that is a 4 flat
it was a 10 flat that was divided up and never shouldve been
well we just got the 4 flat about 2 years ago from some very incompetent peoplethru a shortsale finally we have stabilized our corner in Rogers Park
and have both buildings and yards under the same ownership.

Thats really cool that you fixed up a building in Austin
chitownwest, ofcourse you have to be careful because
Austin is dangerous, but parts of it have stabilized.

[untitledreality]

Originally Posted by mohammed wong

finally we have stabilized our corner in Rogers Park and have both buildings and yards under the same ownership.

Is there going to be a designated M.Wong block in the future? You can coin your own name for it and advertise it as an exclusive Rogers Park community.

[untitledreality]

Originally Posted by paytonc

the Podmajersky family in East Pilsen

Good find... looked through their portfolio and its very encouraging. Great to see such an ambitious family in an area steeped with great architecture. The city could really benefit from more people like them.

[mohammed wong]

Originally Posted by untitledreality

Good find... looked through their portfolio and its very encouraging. Great to see such an ambitious family in an area steeped with great architecture. The city could really benefit from more people like them.

I think its a double edged sword. It a very strange part of town.
Its an example of what would happen if one clan owned a significant majority of a part of the city. Becomes a bit monolithic with the address labels
and the artist thing going on. Dont get me wrong its okay. But a little MORE variety in ownership would make that area MORE interesting.

That area has been pretty static and unchanging for awhile.
Its the properties not owned by the pods that has added new needed diversity and investment in that area.

[The Urban Politician]

^ Mohammed, I checked out some real estate in Rogers Park lately, but I have to admit I was turned off.

Clearly I was looking in the wrong areas. Good building stock but a lot of...ghettofication.

What corner of RP is your 10 flat in? Maybe that is where I should look for property. I am not a live-in owner, but I have made a pledge to rent quality units to people with good credit, I don't have the time or energy to evict cheap-ass scumbags with my busy job in the medical field.

[mohammed wong]

Originally Posted by The Urban Politician

^ Mohammed, I checked out some real estate in Rogers Park lately, but I have to admit I was turned off.

Clearly I was looking in the wrong areas. Good building stock but a lot of...ghettofication.

What corner of RP is your 10 flat in? Maybe that is where I should look for property. I am not a live-in owner, but I have made a pledge to rent quality units to people with good credit, I don't have the time or energy to evict cheap-ass scumbags with my busy job in the medical field.

Hey Urb.
Our families ten flat is right near the Morse EL stop.
We have about 3 bad buildings on our block.
One with threshold (psych patients some with drug problems),
a ratty senior building (some old people are bad), and a total nightmare slumlandlord building. I and many neighbors email each other about
this nightmare building and we are doing what we can to get the landlord in hot water, there are drug dealers/prostitutes and bangers there, they dont completely dominate the building, there are some decent immigrant families there as well.

We use a leasing agent to get good tenants, even then there will be problems but much much less so. We finally have a decent array of tenants
in our building.

Pritzker is dumping some dough into RP,
check out Mayne Stage/Act One Cafe its right down the street from our building, helped the area a TON, that and Reside on Morse helped Morse alot
and Morse has undergone a huge streetscape. Our part of RP has really
gone past the tipping point, there is more good than bad there now.

Also Pritzker just bought the FLW building on Sheridan, the Emil Bach house.
Glad mr P has daned to grace our neighborhood with some dough.

The ghettoificaiton you mention in likely by Howard, which longterm is
probably the best bet for investment. I mean, if there is no upside and no room for improvement then there is less room for your investment to go up.
Our family doesnt plan on selling.

[untitledreality]

Originally Posted by mohammed wong

Dont get me wrong its okay. But a little MORE variety in ownership would make that area MORE interesting.
.

That is not at all the fault of the Pod family though... in fact, if there have been little new investment in the area is has not been because properties are being blocked by the Pod's, but that few other investors are interested... so I see the Pod's as a stabilizing force keeping the area intact until new blood emerges.


Moving on to other neighborhoods, I have been hearing a lot about a few points of gentrification emerging in South Shore... how does everyone feel about the prospects of this neighborhood? It has excellent building stock, good values, access to the lake/parks/LSD... but is still very much a risk.

[paytonc]

It's a lovely neighborhood, great bones, great location and amenities, and a good community of people who do care about it, but the collapse of ShoreBank may have dealt a blow to its medium-term prospects. I'd say that its problems might be less intractable than Rogers Park's, and I know several bourgeois types who've already moved there.

[lawfin]

Wong, I too am a RP resident. Have you or your colleagues looked into chicago's nuisance abatement ordinance. Document everything , video if necessary.

[lawfin]

Originally Posted by paytonc

It's a lovely neighborhood, great bones, great location and amenities, and a good community of people who do care about it, but the collapse of ShoreBank may have dealt a blow to its medium-term prospects. I'd say that its problems might be less intractable than Rogers Park's, and I know several bourgeois types who've already moved there.

Southshore less intractable than RP...not a chance. Just for example south shore has had nearly 5x the homicides that RP has over the past several years. RP is averging about 4 a year with a population of 60-65,000, South Shore has a similar population number but unfavorable demographics for homicides for instance. I would expect if the trend in RP continues and the poor AA population continues its downward trajectory the homicide rate would continue to drop.

[untitledreality]

Originally Posted by lawfin

Just for example south shore has had nearly 5x the homicides that RP has over the past several years

Which is strange because when you limit the crime search to solely non violent offenses I believe the numbers of South Shore are similar to neighborhoods like Uptown/Rogers/Albany. They just need to find a way to get the homicide count down.

[lawfin]

Actually according to CPD the index crime numbers for SS are close to 3 times the number that have occurred in RP over the last 12 months. They really are not comparable at all in terms of crime levels Even property crime levels are roughly 2.5 times the number in RP.

[mohammed wong]

Originally Posted by lawfin

Wong, I too am a RP resident. Have you or your colleagues looked into chicago's nuisance abatement ordinance. Document everything , video if necessary.

Where in RP do you live? Us neighbors email each other about the building and call in all drug deals. Yeah I think it may be a good idea to put up a securtiy camera for surveillence. The slumlandlord lives in West Ridge and the building has just been paid off.

If I had unlimited money, I would buy all the houses up around his place (the slumlandlord) and then fill them up with section 8 and then tell him what, what, whats the problem?

[mohammed wong]

Originally Posted by lawfin

Southshore less intractable than RP...not a chance. Just for example south shore has had nearly 5x the homicides that RP has over the past several years. RP is averging about 4 a year with a population of 60-65,000, South Shore has a similar population number but unfavorable demographics for homicides for instance. I would expect if the trend in RP continues and the poor AA population continues its downward trajectory the homicide rate would continue to drop.

Yes Southshore is way rougher. Still a good bet long term I would say.
Yes it is higher risk. The cheaper price on buildings there is for a reason.