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This article was published on: 02/01/2003

Housing Opportunity: Real-Life Solutions

Chicago's Edgewater
Affordable Housing Success Stories
A community-wide initiative help turn historic homes into affordable places to live.


Long before affordability became a hot housing issue, Chicago’s Edgewater neighborhood embraced a living laboratory of affordable strategies that actually seem to work.

In fact, Edgewater stands out as an example of a community that has comfortably melded affordable and market-rate housing. It’s one of 10 U.S. neighborhoods the Fannie Mae Foundation in 2000 named as “just right” for first-time buyers, offering “families of modest means a toehold on homeownership with an abundance of starter houses and good prospects for significant price appreciation.”

To residents and city officials, the area’s financial accessibility can be chalked up partly to its diverse housing stock. The community has high-rise lakefront condominiums as well as affordable studio and one-bedroom apartments. Expensive single-family homes co-exist among two- and three-flat buildings. About two-thirds of Edgewater's units are rental; the others are owner-occupied. To boot, residents are connected to the downtown business district with plenty of access to transportation.

The area’s diverse population is the other key to affordability. Traditionally, Edgewater, has been considered a gateway community for new immigrant groups. It’s also home to plenty of native-born middle-class Americans who prefer the area's cultural stew to bland enclaves such as Lincoln Park, a neighborhood south of Edgewater.

"No group feels threatened here," says Paul Boyd, who sells homes in Edgewater for Coldwell Banker Residential Brokerage. "Edgewater functions economically and socially with a strong distribution of ethnic types.”

The city and developers have also had a hand in maintaining housing options for modest-income residents. When about 10,000 of the affordable rental units began to decline noticeably by the early 1980s, millions of dollars from private and public sources were spent to rehabilitate them. Landlords also improved property management efforts to ensure proper upkeep.

After that, "people buying condos didn't realize that the building next door was Section 8 housing," says Boyd, a previous president of the Edgewater Community Council. "The threatening element of the neighborhood was gone."

Some worry now that the pendulum may have swung too far the other way, and Edgewater may become unaffordable. About 1,000 rental apartments have been converted into condominiums over the last decade. Median home values have increased to $243,594—a 50 percent jump since 1990. The average price of a single-family home is $464,768. "There’s a danger people could get forced out," says Clare Tobin, executive director at the Edgewater Community Council.

But new programs may help Edgewater keep its affordable housing. For example, the $30 million rehab of two old residential hotels has saved 379 affordable units. Also, first-time homebuyers can participate in a program, available citywide, that offers a 6.5 percent fixed-rate mortgage along with a rebate to the homeowner of 4 percent of the loan amount.
Alderman Mary Ann Smith of the 48th Ward, which includes much of Edgewater, thinks increased homeownership, especially among new immigrants, will only add stability to a community that already embraces variety. She says: "Families want to stay here."

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Series Introduction

Case Study #1:
Asheville, NC

Case Study #2:
Chicago's Edgewater

Case Study #3:
New York City

Case Study #4:
Wabash, Indiana

Case Study #5:
Dallas, Texas