Photo courtesy of OTTO Engineering
Tom Roeser's rehabbed manufacturing site on the Fox River.
When, how, and how much should businesses invest in comminuty revitalization? At MPC's Feb. 27 roundtable, two employers made the case for housing investment. Speaking to an audience of employers, financial institutions, hospitals and universities, developers, municipalities, and community advocates, Derek Douglas of the University of Chicago (UofChicago) and Tom Roeser of OTTO Engineering shared stories about the unique roles their anchor institutions play in their respective communities.
Both stories resonate deeply with MPC. Our work over the past 12 years with employer-assisted housing has demonstrated that—most often—anchor institutions are the employers who truly understand the community development needs and opportunities of their “place." Generally, anchor institutions are geographically large, take up lots of space, and have an important presence in their cities and communities. How anchor institutions realize their potential for community revitalization varies greatly.
A University in the city, housing challenges abound
University of Chicago has had an employer-assisted housing (EAH) program for nearly a decade, and is involved in community revitalization on Chicago's Mid-South Side through a host of other initiatives, so Derek Douglas, vice president of the Office of Civic Engagement, UofChicago, had much to share. The University has invested more than $1.5 million in its EAH strategy, helping more than 200 employees purchase homes close to the campus using a forgivable EAH loan of $7,500 each. Douglas explained that the incentives toward EAH are two-pronged: The University benefits from having employees living near work, and has a positive impact on surrounding communities by encouraging housing purchases.
“The first question becomes, are we going to be active and engaged in the community or not? And if we will be, we start to think about how to do that, and we are led to solutions like EAH," said Douglas. He also explained that in some cases, anchor institutions feel they have no choice but to act—the "need element" is simply too great.
University of Chicago family bought a condo near campus.
Photo courtesy of University of Chicago
Though Douglas focused on the University’s EAH program specifically, he mentioned how their EAH effort overlaps with other goals of the University and community groups. The Office of Civic Engagement touches everything from housing to arts programming and partnerships with faith-based organizations. On working with community groups, Douglas says there is benefit to working together. The University participates in partnerships with community groups so they have a “better sense of plans from the community perspective and how we can use our role as an anchor to connect those plans."
In response to that dynamic, Douglas announced the University will be expanding the incentives for its decade-old EAH program. The University will offer tiered assistance rather than one set benefit amount of $7,500. Participating homebuyers will receive between $5,000 and $15,000, depending on their community area of purchase. By providing a higher financial incentive for employees to live in community areas with the greatest need for reinvestment, and by adding the option for employees to tap rental assistance to live in those communities, the University will be able to focus more deeply on some neighborhoods, encouraging a larger number of employees to make the choice of living near campus.
A manufacturer in Kane County proves the value of community revitalization for the interests of his business
In a very different geographic and business landscape than Chicago, the “need element” for housing revitalization in Carpentersville, Ill., was palpable.
Tom Roeser, president, OTTO Engineering, became involved in community revitalization through business ownership. His company produces industrial controls for two-way radios, including those used by military and first responders. OTTO has been located in Carpentersville, in the northeast corner of Kane County, for decades. Recently, Roeser’s manufacturing site and offices underwent a major renovation, and he started to see the community around his site in a different light. With his company's shiny new buildings nestled along the Fox River, the dilapidated homes within walking distance began to look even worse.
OTTO Home under refurbishment.
Photo courtesy of OTTO Homes
Roeser began purchasing nearby homes, fixing them up, and renting them at low cost to employees or employee referrals. His top priority for renters was that they would keep the home looking great. Having spruced up the nearby homes, Roeser turned his attention to a troubled local development. Due to absentee landlords, many of the homes were in disrepair, or had been foreclosed on and were vacant. Residents in the neighborhood were experiencing high crime rates and were concerned about their homes' property values. Since 2008, the transformation of this development has been remarkable. OTTO Homes has purchased nearly 140 homes, rehabbed them completely, and is selling them affordably. From 2008 to 2010, not one home sold in the neighborhood except to OTTO Homes. Since 2010, others have been buying in the neighborhood again—concrete proof that improving a block of individual homes in a geographically targeted area can improve an entire neighborhood and positively impact a whole town.
Roeser often encounters disbelief from people who hear about his investment—that a business owner would spend so much time and so many resources on this effort in one town. His response is that while these homes help people, the housing work he’s done in the area helps his bottom line, too. “Business owners look out for their own interests," he said. "What’s good for my business happens to be what’s been good for the community.”
"We need more OTTOs," said one audience member in the surveys collected at the roundtable.
We at MPC are inclined to agree.
The roundtable was sponsored by Hyde Park Bank—a Wintrust Community Bank and an anchor institution itself—which does business in the Hyde Park community and makes an impact on the neighborhood through intentional community development efforts.