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Housing development in Chicago's south suburbs showcases burgeoning partnership between private, public sectors

What happens when neighboring communities commit to work together—and in partnership with every level of government, as well as private investors—to do strategic housing redevelopment to address the foreclosed and vacant properties devastating their neighborhoods?

Since the advent of the foreclosure crisis, that’s the strategy that MPC, the Metropolitan Mayors Caucus and a range of committed partners have been testing out. We call it “interjurisdictional collaboration,” which is a lot of syllables for a relatively simple concept: towns working together, across municipal borders, to implement a jointly developed plan. Three clusters of Cook County suburbs are demonstrating how to bring back communities devastated by the economic downturn through joint planning, and the pooling and targeting of resources, to redevelop homes near transit stops and job centers.

When the cluster in the south—the Chicago Southland Housing and Community Development Collaborative—first formed to tackle the area's devastating foreclosure trends, we identified three ingredients necessary for success, a "Recipe for Change." It’s taken a bit of work, but all three ingredients are in the pot: 

  1. A joint municipal strategy in the southern suburbs, building on local assets and aligning priorities. Check! The communities embraced housing priorities described in the south suburbs’ Green TIME Zone redevelopment strategy, which builds on local transit assets to attract and revitalize mixed-use, mixed-income development. With support from visionary philanthropic organizations—The Chicago Community Trust, Grand Victoria Foundation, and Field Foundation—they hired a Director of Housing Initiatives, Janice Morrissy, to facilitate the collaboration, manage local deals, and build capacity.  A subregional housing policy plan, through Homes for Chaning Region, was recently published -- after an inclusive community engagement process with policymakers and the full range of stakeholders.
  2. Support for this strategy from every level of government (in particular county, regional, state and federal). The gang’s all here: Government agencies at all levels—including Cook County, Chicago Metropolitan Agency for Planning, Regional Transportation Authority, Illinois Dept. of Commerce and Economic Opportunity, Illinois Housing Development Authority, U.S. Environmental Protection Agency, and U.S. Dept. of Housing and Urban Development (HUD)—have rewarded this collaborative planning and local leadership with more than $20 million. (More details on all these public sector investments available at www.metroplanning.org/ij.)
  3. Private sector investment in this strategy from the development community, employers and banks. There isn’t and never will be enough public funding to address the local demands and vast number of foreclosures that have occurred. To ensure this collaborative model is replicable and scalable, private sector investment is mission critical. 

The south collaborative has spent much of their first several years addressing the first two ingredients, with less attention focused on engaging the private sector. But that is starting to change, with new tools and initiatives underway to attract private sector support.

That’s why I’m thrilled to report, based on three recent milestones, that the private sector is at the table.

  • On Thursday, April 5, the South Suburban Mayors and Managers Association formalized an agreement with the nationally reputed Enterprise Community Partners and the locally accomplished Chicago Community Loan Fund to manage the new Southland Community Development Fund and Investment Consortium. Their goal?  To take $1.5 million in seed money provided by a HUD Sustainable Communities Initiative Challenge Grant and $4.5 million Enterprise is bringing to the table to leverage another $9 million, which will bring to life the south suburb’s transit-oriented development plans.
  • On Thursday, April 12, members of the Chicago Southland Housing and Community Development Collaborative adopted a new tool developed by the Chicago Metropolitan Agency for Planning to help participating municipal leaders prioritize its pipeline of development activity for maximum impact. For developers wary of “doing business” with dozens of different  towns, the transparency and predictability of this tool underscores that political leadership indeed exists and that “a single point of entry” can promote efficiencies. This tool also can help prioritize demolition activity for the land assembly needed to implement catalytic development plans.  
  • On March 22, at a panel discussion I participated in at the Illinois Housing Council’s Annual Meeting, fellow panelist Rafael Leon, executive director of the Chicago Metropolitan Housing Development Corporation (CMHDC), boasted to his developer peers about how he recently acquired 86 units of scattered site rental housing in the south suburbs through a bulk acquisition from Bank Financial Corp. The south suburbs of Country Club Hills, East Hazel Crest, Hazel Crest, Matteson, Park Forest, Richton Park, Sauk Village, and University Park all benefitted from this transaction. While many industry leaders are talking about scattered site rental as one of the few  scalable solutions to the vacant and abandoned building crisis devastating so many communities, Leon also noted that “It was a tremendous business opportunity.”As for concerns about community opposition, Leon further stressed that "these properties are already occupied by residents of the communities and  “I’ve been heartened by the political support and leadership of SSMMA and the collaborative. The fact that we were able to close one transaction that crossed borders in six communities really demonstrates that it’s a new day for developers in the southern suburbs.”

  • Several south suburban employers have been committed to Employer-Assisted Housing (EAH), through which they help their employees purchase, rent or retrofit homes in or near the communities where they work. Employers such as Robinson Engineering and St. James Hospital and Health Centers are refining their EAH programs to encourage local employee demand for priority developments.   

The creation of the Southland Community Development Fund and Investment Consortium and the selection of its capable managers are incredibly promising. The interest of local employers and banks (and the precedent started by Bank Financial Corp.’s transaction with CMHDC) offers further inspiration. And the new project selection tool developed by CMAP further ensures public and private sector stakeholders that sound, politically vetted criteria is being used to prioritize investment. Indeed, it is a new day for developers in the southern suburbs. 

Learn more about how interjurisdictional collaboration is leading to housing redevelopment and economic recovery in Chicagoland:

  • Visit the Chicago Southland Economic Development Corporation web site to see the transit-oriented development (TOD) visions towns are adopting. To implement these plans, the communities are approving new zoning and demonstrating market demand by sharing critical information on local transit ridership, population growth, retail development opportunities, and more. Visit public.cshcdc.org to see the many housing tools aligned through Director of Housing Initiatives Janice Morrissy.
     
  • Read the Federal Reserve Bank’s November 2011 special edition issue of Profitwise magazine, which illustrates how Chicagoland’s housing collaboratives are deploying this "Recipe for Change" to fit their specific local challenges and needs.
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