Rising Values

Larry and Pat Burns sit in the kitchen of their Orleans Street home as work continues on a new mid-rise building out the window, a few blocks from Cabrini-Green publich housing. (Photo by Mary Hanlon)

Larry and Pat Burns sit in the kitchen of their Orleans Street home as work continues on a new mid-rise building out the window, a few blocks from Cabrini-Green publich housing. (Photo by Mary Hanlon)

He was certain once he saw the horses, rabbits and dogs. It was 25 years ago that Larry Burns and his wife, Pat, decided they wanted to buy property in the neighborhood where Burns and his family grew up as renters—near the Cabrini-Green public housing development.

They looked at an eight-unit apartment building at 1031 N. Orleans St. that fronts Cabrini-Green’s landmark red buildings. It was home to squatters and going into foreclosure, said Burns, 73, who is African American. The couple tried to buy the property for $45,000 in 1980, but no lender would give them a loan. “What they didn’t want to say was it was too close to Cabrini,” said Pat, 63, who is white. To most, the area was risky, but Larry Burns thought otherwise. “Everybody who lived here knew it would be a prime location,” he said.

As the Chicago Housing Authority has closed or demolished Cabrini-Green high-rises, Burns’ prediction has come true. Sights not seen in the neighborhood before are now commonplace. The Chicago Tribune, which used to be a hassle to get delivered, now appears on his doorstep every morning. He can also see white horses draw stately white carriages, hungry rabbits nibble on bloomed summertime flowers and trendy canines pull their owners down the neighborhood’s streets. “Once you see the dogs coming in, then you know the neighborhood is gone,” Burns said. “I don’t know if it’s going to get better. It’s going to happen. It’s a flow. It’s like when the pioneers came to the West and moved the [American] Indians out.”

The neighborhood surrounding Cabrini-Green has gone through a dramatic metamorphosis, fashioning it into one of the city’s fastest-growing and most-attractive neighborhoods. The racial pendulum there has swung from black to white. Property has transferred from poor renters to middle- and upper-class homeowners. And developers have transformed blighted property and vacant lots into luxury condominiums and well-known retail outlets.

To a much lesser extent, similar changes are occurring around other developments slated for change as part of the CHA’s ballyhooed 10-year, $1.5 billion plan to demolish public housing high-rises and replace them with mixed-income properties, now in its sixth year.

The Chicago Reporter analyzed residential property transactions, dating back to 1995, within two blocks of the Cabrini-Green, Henry Horner, Madden Park, Rockwell Gardens, Stateway Gardens, Robert Taylor and Ida B. Wells developments—all of which are included in the CHA’s plan. The Reporter also analyzed Census 2000 figures and home mortgage lending data for census tracts that include the two-block radius around these developments. The Reporter found:

* Residential property sales within two blocks of the developments reached a combined total of more than $2 billion;

* Most of the real-estate activity, nearly $1.6 billion, occurred since 2000, the year the CHA launched its plan;

* Property values in these neighborhoods have escalated quickly, in some cases, doubling within weeks;

* While nearly 74 percent of residents in the neighborhoods were black in 2000, nearly 66 percent of new homeowners have been white since then;

* About 25 percent of the neighborhoods’ households earned more than $50,000 a year in 1999, compared with 82 percent of those who’ve bought homes there since.

By far, the most dramatic shifts have occurred near Cabrini-Green, where nearly $1 billion in residential property has been sold since 2000. It was no surprise that Cabrini-Green’s proximity to the Magnificent Mile and opulent Gold Coast would garner interest as public housing buildings there were torn down—it just had not been clear how much.

Since Jan. 1, 2004, residential property sales within two blocks of Cabrini-Green exceeded the sum for a six-square-mile section of the South Side—nearly $281 million sold near Cabrini-Green compared to a combined $272 million in Fuller Park, New City, and portions of Gage Park, Grand Boulevard and Washington Park.

“It hasn’t happened overnight,” said developer Dan McLean, whose MCL Companies has developed land near Cabrini-Green. “It’s been going on 10 years now, and it would’ve gone a lot faster if the CHA had torn down the buildings.”

But the change is happening fast enough for Larry Burns and other longtime residents who rebuff the names of the neighborhood’s many new developments—like North Town Village—for the area’s more familiar incarnation—the Near North Side.

For decades, the area had been an intimate refuge to many black renters and distinct pockets of black homeowners along Blackhawk, Orleans and Mohawk streets. Back then, relationships were developed through conversations drawn from plastic chairs on front stoops, cutting stations at the local barber shop, rectangular tables at the Italian-owned pool halls or basketball leagues at a nearby church.

People were known by their family name, preceded by a courtesy title. Others were identified by some prominence, occupation or description of their property. The guy who won NBC5’s Thomas Jefferson Award for public service—that’s Corwin Marbly. The black father-and-son architect team is Charles and Eben Smith. The 80-something who’s a bit hard of hearing and lives next to the fire station—now, that’s Mr. Booker.

Black residents have trickled out of the neighborhood over time to the South and West sides, though several—who call themselves the “Northsiders”—remain connected through monthly meetings at Captain’s Hard Time Diner on the South Side.

Those who’ve remained in the neighborhood, like Burns, try to acclimate to their more distant new neighbors and ballooning home equity. But they eye the changes with skepticism, questioning how long they’ll be able to participate. Burdensome property taxes alone have forced some away.

Burns bought his Orleans Street property in 1980 for $45,000. It is now appraised at around $1.5 million. Last year, the retired Chicago firefighter was billed more than $27,000, much weightier than the $11,000 he once paid. “If I didn’t have this building, I wouldn’t be able to afford to stay over here because it’s just too expensive,” Burns said. “That was one of the reasons a lot of people sold.”


Architect Eben Smith, an African American, talks about the new single-family homes he and his father, Charles, developed in the Mohawk, North subdivision near Cabrini-Green. Smith, who grew up in that area, says he can’t afford to live there now. (Photo by Mary Hanlon)

Some decried the CHA’s massive effort—dubbed the “Plan for Transformation”—and predicted it would set off a land grab among investors, transforming entire neighborhoods.

And now that the CHA is more than halfway through its 10-year plan, critics say their forecasting was warranted. They point to escalating real-estate activity as proof that, ultimately, poor residents are being displaced in favor of wealthier homeowners. “It confirms our theory,” said Harold L. Lucas, president and chief executive officer of the Black Metropolis Convention and Tourism Council. “There are not going to be poor areas [in the new mixed-income communities] because the people will be removed. The land will turn over.”

But, in a written statement, Terry Peterson, chief executive officer of the CHA, challenged the notion that his agency’s plan has sparked massive racial and economic shifts near the developments. “Your question carries two assumptions –¦ that the neighborhoods were not already undergoing change and [that] public housing families that relocated have no opportunity to return,” Peterson said. “Neither of these assumptions is true.”

Peterson noted that, while public housing residents have moved to other CHA developments or opted to use housing vouchers in the private market, most of them have the legal right to return, either to new mixed-income developments or other rehabbed public housing.

Only a portion of the 25,000 families affected by the plan will be able to return to the mixed-income developments, where public housing residents will live in nearly equal portions with affordable- and market-rate homeowners. The families waiting for a chance to move into the mixed-income developments must meet job, child-care and other requirements. Peterson said about 60 percent of them qualify right now. “If some families decide that what is best for them is to remain in the private market and enjoy their new lives, that is their prerogative—and that is not a bad thing. For the first time, many public housing families are getting to choose a course for their lives,” he said. “That is what the Plan for Transformation is about: Ending a legacy of poverty and isolation and offering families a chance to live without stigma.”

Alderman Madeline Haithcock, whose 2nd Ward includes the Rockwell Gardens development, believes the changes will better the entire community. “I know there are some people who are saying things aren’t going as well as they could. I’m no fool,” she said. “But I feel good about what’s going on.”

Alderman Toni Preckwinkle, whose 4th Ward includes the Madden Park and Wells developments, said the racial and economic shifts that have occurred around Cabrini-Green were the “unintentional consequences” of the Plan for Transformation. Such changes, and intense market activity, however, have not occurred in her ward, she said. Part of the reason is that there has been ample vacant land there to develop.

Alderman Dorothy Tillman, whose 3rd Ward includes the Stateway and Taylor developments, and Alderman Walter Burnett, who grew up in the Cabrini-Green area and now represents its 27th Ward, did not return repeated calls for comment.

Lance Lewis, a spokesman with Mayor Richard M. Daley’s press office, said the plan is the best way to build housing for CHA residents. “It’s more cost-effective to tear them down and build single-family dwellings in mixed-income neighborhoods,” he said. “And that’s our city goal, to have mixed-income neighborhoods.”

Larry Bennett, a professor of political science at DePaul University specializing in politics and neighborhood development, said it’s naí¯ve to think planners didn’t know how the surrounding neighborhoods would be affected.

But it was easy for the fallout to be ignored because there was overwhelming support and urgency—both nationally and locally—to eliminate high-density public housing in support of mixed-income, low-rise “new urbanism.” That created a push for demolition, Bennett said, without a full discourse on the effect such drastic changes would have on existing residents.

Many questions had remained, Bennett said: What would be the effect of higher property taxes on remaining property owners, like Larry and Pat Burns? And which South Side neighborhoods would become destinations for displaced public housing residents and property owners? “I think that a lot of those kinds of questions were there,” said Bennett, co-author of “Where Are the Poor People to Live,” a book, to be released in the spring, evaluating the effect of the CHA plan on public housing residents. “But they tended to be subsumed within this larger commitment, which is, ‘We have to take down the high-rises.'”

Carol Steele, president of the Coalition to Protect Public Housing and a longtime tenant leader at Cabrini-Green, said residents there are grateful that the area is now deemed worthy of more suitable commercial development like the nearby, pristine shopping district that includes a Dominick’s grocery store and a Blockbuster. The roads surrounding Cabrini-Green are also dotted with a revamped Seward Park, a new library branch, and a diverse Walter Payton College Prep, where admission to the math, science and language academy is selective.

But their gratitude is not without reflection of the years they spent without having these simple pleasures within walking distance. “The school is here, the stores are here, the new library is here. You done fixed up the streets and the sidewalks,” Steele said. “Now you’re telling us, ‘Go away and come back, maybe, when we build new housing.'”

Kenneth Hammond is hopeful that he’ll be among the Cabrini-Green residents who can return once the redevelopment is complete. But the CHA’s plan is a double-edged sword for the 37-year-old who grew up at Cabrini-Green but now works as part of the Heneghan Wrecking Co. crew charged with tearing it down. “It’s a hurtful feeling and a good feeling,” he said. “With me having my own family now, [moving back into the new development] will be good for my family.”

Staring up, Hammond looks at the shell of the building at 630 W. Evergreen Ave. The roof is absent, and the outer walls have been removed, revealing each bare, individual apartment. He points to two apartments. The first is on the 14th floor, where his mother gave birth to him. The second is a fifth-floor unit where he has lived most of his life. Grass and asphalt that used to surround the tower has been ripped up by the construction crew. Hammond collects pieces of the debris. He plans to offer them to others for comfort.

Like Hammond, Eben Smith grew up in the neighborhood. After graduating from Howard University and working in the city’s bureau of architecture, Smith returned to the neighborhood in 1992 to go into business with his dad, Chicago architect Charles Smith. They opened an office near the North Larrabee Street apartment where they once lived. The two have gotten a piece of the lucrative redevelopment in the area, co-developing single-family homes in the Mohawk North subdivision.

Yet, Eben Smith said it would be tough for him to afford a home there. “The property values are so high. Maybe you can afford a $500,000 house,” he said. “I don’t have those resources.”

He’s not alone. Most who are buying in the area have incomes beyond middle-class residents like Eben Smith. While 52 percent of the area’s households earned less than $50,000 a year in 1999, just 10 percent of individuals granted home loans in the area from 2000 to 2003 earned less than $50,000—about 53 percent earned more than $100,000 annually.

In 2000, about 50 percent of the area’s residents were African American and another 40 percent were white. However, from 2000 to 2003, less than 2 percent of those granted home loans in the area were black; nearly 80 percent of them were white.

Two years before the CHA announced its plan, Yittayih Zelalem, co-director of the Nathalie P. Voorhees Center for Neighbor-hood and Community Improvement at the University of Illinois at Chicago, published a study predicting sales of 2,300 replacement units in and around Cabrini-Green to total $443.5 million. “We tried to look at the level of activity around the time we did the research. There wasn’t much,” he said. “We said, ‘This thing is going to really accelerate.'”

From 1995 to 1999, annual residential property sales within two blocks of Cabrini-Green climbed from more than $6 million to nearly $120 million. Sales peaked in 2002, reaching nearly $270 million. Sales topped $220 million in 2003 and 2004. Home loans for the census tracts surrounding Cabrini-Green increased five-fold from 1993 to 2003, from 249 to 1,259.

Cabrini-Green residents were well aware of their coveted property. It had always been attractive because of its proximity to the Brown Line, Michigan Avenue, the Loop and expressways, Steele said. “When the air shows come, we don’t have to go down to the beach—we can watch them right here,” she said. “This area, folks have been waiting years to get in here. Some of these people bought it as an investment. And, to the people who lived here, it was a community [developers] were destroying.”

McLean, whose MCL Companies is building around Cabrini-Green, said developers knew of the region’s value for a long time, but no one was willing to pioneer the effort with the public housing buildings still standing. “I’ve been developing in Lincoln Park since the mid-’70s, and everybody always talked that eventually [the land around Cabrini-Green] would become valuable,” McLean said. “We just happened to be the first people to go in and buy it.”

As the development progressed, some black property owners near Cabrini-Green were often in dire straits. Escalating property values ratcheted taxes above a threshold many could afford. Some accepted low-balled offers from developers and moved south, fearing the city would condemn their property if it wasn’t sold.

Residents had seen it happen before. Burns recalls in the ’50s when “urban renewal” were the buzz words. “They declared this area ‘slum’ and ‘blighted,’ so they tore down all those buildings on the east side of the Brown Line tracks,” he said. Residents hopeful of renewal grew frustrated when the condemned property sat vacant and wasn’t developed until decades later, into institutions such as the Walter Payton College Prep Academy and Moody Bible Institute.

Corwin Marbly, 80, left the neighborhood decades ago, but he spends so much time volunteering at St. Matthew’s United Methodist Church that some people don’t know he doesn’t live there anymore.

There was a time when Marbly, who retired from the U.S. Postal Service 20 years ago, called the Near North Side home. He co-owned a three-flat for $22,000 at 231 W. Scott St. until the race riots frightened his wife. The couple bought a home in the 10400 block of South Forest Avenue for $19,500. It’s now appraised at $105,000. But the Scott Street home they left is now worth $508,438, according to a 2004 Cook County Assessor’s Office market estimate.

Marbly laughs when asked if he regrets selling. “I know I would have been a richer man,” he said.

Instead, the Reporter’s analysis shows much of the profits going to a handful of development companies. Smithfield Properties of Chicago led all developers with nearly $86 million in residential properties, with many in the 400 block of West Blackhawk Street, the 500 block of West Erie Street and the 1400 block of North Cleveland Avenue.

“Anywhere they can get, they’re grabbing,” Marbly said.

However, the CHA’s plan wasn’t the catalyst in Stonegate Development’s decision to build a 163-unit condominium complex at 600 N. Kingsbury St., said Sam Persico, president of the west suburban Oak Brook-based real-estate firm. The complex is two blocks south of Cabrini-Green but just outside of the area analyzed by the Reporter.

“It was an up-and-coming area along the river, and we decided to develop in it. And it was solely successful in that way,” Persico said. “Maybe the time was better because of the overall plan. It may have caused more residential to be attracted to this particular area.”

Individual property owners also got in on the activity. In September 2004, an Oakwood Boulevard property owner near Madden Park bought a home for $133,500 and then sold 27 days later for $360,000.

Properties near Cabrini-Green, including condos and entire buildings, have been the most expensive, with an average selling price of about $380,000, almost double the value of property sold near Horner and Rockwell, where sales averaged nearly $207,000. Properties averaged about $173,000 near Madden Park and Wells, and about $138,000 within two blocks of Stateway and Taylor.

While some property owners near the South Side developments are being contacted by developers, activity there is scant compared to what’s happening on the Near North Side. On the South Side, blocks go for miles without redevelopment, and then a sprinkle of three- and four-story buildings are wedged between the existing, aged housing stock. It’s rare to see an entire block redeveloped, much less an entire neighborhood.

“The church has been approached by developers asking us if we want to sell, pitching ideas about what it is they could do for us,” said the Rev. John W. Brazeal of Christ the King Lutheran Church at 3701 S. Lake Park Ave. “We’ve said, ‘No,’ since we’ve got plans” to stay in the community.

Frank Larkins, 73, has lived in his property in the 4000 block of South Indiana Avenue for 12 years, succeeding his in-laws who were there for 40 years and had originally paid $6,000 for it. Developers are now offering $150,000, though new condos on the block are selling for $229,000 and up. “If I wanted to sell, I’d put it on the market myself. But where would I go? I’m too old to start over,” Larkins said.

Experts say the South Side neighborhoods will have a much more protracted rejuvenation. “I think the rapidity of development in Cabrini-Green isn’t at all surprising. Its location was such that it made it particularly amenable to a lot of private investment coming in,” said DePaul’s Bennett.

The income and racial shifts have been far less dramatic near the South Side developments than those seen near public housing on the West Side and Near North Side. On the South Side, African Americans are still the majority of new homebuyers in areas around public housing. And less than 15 percent of individuals buying near the South Side developments earned more than $100,000 annually, compared with more than half of those buying near Cabrini-Green, and nearly a third of those buying near Horner and Rockwell.

Since the property values have not risen as dramatically, some longtime black residents on the South Side have not faced exorbitant tax bills like their counterparts on the Near North Side. They have no intention of leaving and are willing to renovate their properties to gain from the budding development activity.

Mary Steward, who lives on Prairie Avenue near Robert Taylor, believes new development in Bronzeville will have a positive effect on property values. It was 13 years ago when she bought her home for $45,000 and an adjoining lot for $3,000. She isn’t sure what her property is worth today. But the person who sold her the home also bought one across the street for $5,000. It recently sold for more than $400,000, Steward said. A contractor, Steward plans to build a six-flat condominium building on the lot next to her home. “Most of the land you see being developed—it’s not CHA land,” Steward said. “People bought that land speculating that the area is going to change. And you’d be stupid not to think it’s going to change.”

Realtor Marty Phelan, of Keller Williams Realty, an Austin, Tex.-based firm with six Chicago locations, believes it’s possible the changes on the South Side could be similar to what’s already happened elsewhere. “When you take a look at the history of Chicago, and what types of neighborhoods have gone through some transformation—it wasn’t that long ago when the area around Wrigley Field wasn’t the type of area that you wanted to be caught in,” he said.

But, during the past decade, there was more than $1.2 billion in residential property sales within two blocks of Cabrini-Green, more than three times higher than the $391 million worth of property sold near the South Side developments. Bennett cautioned that development near South Side public housing might never catch up, since those properties are characterized much differently than their Near North Side counterparts. The region surrounding Cabrini-Green was already posh, unlike the South Side, Bennett said. Therefore, developing the South Side would require a project of a much larger scope and longer timeline. Additionally, it’s uncertain whether mortgage rates will remain low, enticing buyers, he added. “I could imagine a national recession, an increase in interest rates slowing down home purchases and slowing down a lot of the investment activity,” Bennett said.

While the CHA has mandated that developments built to replace demolished public housing buildings consist of market-rate, affordable and subsidized homes and apartments, some wonder if the surrounding neighborhoods will naturally attain a similar mix.

Realtor Eric P. Martin has his doubts. “When you look at it, it’s almost like trying to force a situation and trying to make everybody get along,” said Martin, 40, of Keller Williams. As a child, Martin spent three years living in Stateway Gardens.

There’s no answer just yet but officials say people have to give it some time.

“I don’t think it’s a strategy we’ll turn our backs on later,” said MarySue Barrett, president of the Metropolitan Planning Council, an independent nonprofit that has addressed growth and development issues, including public housing, for more than 70 years. “There are examples of communities with a range of housing types and mixed races, like Rogers Park, and they’re healthy. But they need constant attention to keep it working.”

Connie Buscemi, spokeswoman for the city’s department of planning and development, said she expects the mixed-income model to continue. “It gives everybody an opportunity to share in the benefits of the economic and residential boom that is happening in the city,” she said. “Everybody wants to be able to have a nice home to live in, to point to a home and say, ‘That’s my house; that’s where I live.'”

Larry Burns isn’t sure yet whether he’ll remain part of that mix around Cabrini-Green. Friends are surprised that he’s still there. “We might be the only ones left from Division all the way down to Chicago Avenue,” Burns said. “I guess it’s just a matter of time before I’m gone, too.”

Contributing: Mark W. Anderson, Jeff Danna, Amy Rainey and Whitney Woodward.

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