Homeownership is a key part of building generational wealth, especially in Chicago where only 33.9% of Black families and 45.6% of Latino families own their homes, compared to 53% of white families, according to the Chicago Community Trust.
A program backed by local and national funders is looking to change those statistics by providing a smoother path to homeownership on the West Side — focusing on East Garfield Park and Humboldt Park, where the disparity in homeownership is even more striking.
In 2021, Chicago was one of five cities selected for the program Connecting Capital and Community that aims to strengthen housing investments and level the playing field for homeownership. The other cities are Los Angeles, Miami, Greater Seattle and Washington, D.C. The national initiative is led by Washington, D.C.,-based Center for Community Investment and funded by JPMorgan Chase.
“What [the cities] have in common is that the focus on the housing system was … ‘What is the shared priority?’” Omar Carrillo Tinajero, executive director at the Center for Community Investment, said. “In Chicago’s case, it was affordable homeownership.”
The Chicago Community Trust, with assistance from the Center for Community Investment, is spearheading the effort — using funds to support more residential development.
The trust amassed a team of 20 organizations to take part in the program. Some of its partners include Garfield Park Community Council, the Puerto Rican Agenda of Chicago, Neighborhood Housing Services of Chicago, KMW Communities and the city of Chicago. It also includes lenders and developers, Connecting Capital and Community Program Director Lynnette McRae said.
“We knew that these challenges were showing up for a reason,” McRae said. “There weren’t a lot of homes that were affordable in these communities. There were lots of vacant lots, and we know that there also wasn’t the same level of lending happening in these communities. … The power of 3C [Connecting Capital and Community] is us collaborating and us thinking about these things, not just from our own perspectives but putting community at the center.”
JPMorgan pledged an initial $1.95 million three-year philanthropic commitment, and to date, it has invested $5.45 million in the program. There’s now an extended network of funders, McRae said, including the Chicago Community Trust. In total, $10.38 million has been raised, including from JPMorgan.
The funds help with predevelopment costs, like purchasing vacant lots and site preparation. It’s also used to connect developers with the capital needed to build, McRae said.
“A lot of the developers faced many of the same challenges that our homebuyers did, which was being able to get access to affordable capital,” she said. “There are lots of challenges … when you think about appraisals, and you think about land values … in underinvested communities that they have to contend with. It’s really important to find lenders that are willing to partner with us, who understand the vision and the value and the impact that we’re trying to make.”
Connecting Capital and Community partners with six developers — including North Lawndale-based Inherent L3C, a developer of modular homes that’s also building in Chicago Heights, Humboldt Park and Proviso Township, as part of a Cook County pilot program to build 120 homes.
Connecting Capital and Community has secured 78 vacant lots, with a goal of building homes on 100 lots.
Bill Williams, founder and principal at KMW Communities, and Lynnette McRae, program director for Connecting Capital and Community, stand outside a recently built home in Humboldt Park. The executives are part of a group helping to build new homes and provide resources that help first time homebuyers on the West Side.
Anthony Vazquez/Sun-Times
As of November, the initiative has built and sold 10 new homes, according to the Chicago Community Trust. An additional seven homes have been built, with three of them under contract and four available for purchase. There’s plans to complete another eight homes early next year.
The homes must be sold at a price affordable to households earning up to 120% of the area median income, as determined by the Chicago Department of Housing, according to McRae. The maximum sale price varies based on the size of the homes but can range from $390,000 for a three-bedroom to $436,000 for a four-bedroom.
Potential homebuyers got to see the finished homes earlier this month, during a trolley tour that took individuals through East Garfield Park and Humboldt Park. Homebuyers were able to chat with housing counselors and learn how to qualify for mortgages.
“We want to bring more of an understanding of the [Connecting Capital and Community] program as well,” McRae said. “We had a good balance of about half of the folks who were there actively looking to buy, and the other half were kind of in a supportive role, wanting to learn more about how they could be supportive homeowners from the community.”
The initiative has helped 72 first-time homebuyers purchase new, or existing, properties on the West Side, McRae said.
McRae said next year, they plan to start building two-flats in addition to single-family homes. The group is also considering how the initiative can support rehab efforts for aging homes in need of repairs.
Connecting Capital and Community also wants to continue what McRae sees as its biggest success to date: bringing purchasing prices down by offering interest rate cuts and down payment assistance.
“We’re thinking about it as a menu,” McRae said. “We want to grow that menu of available options — whatever that looks like.”