City allocates $75 million in bond funds to market rate housing initiative on South and West sides
Chicago's Department of Planning and Development is launching a $75 million program to build "missing middle housing" in neighborhoods on the South and West sides in an effort to provide lower-cost, owner-occupied for-sale housing options and repopulate communities after a decadeslong population decline , the department announced Tuesday.
The program — officially called the Missing Middle Infill Housing Initiative after originally being named "Come Home Chicago" — will start in North Lawndale with 44 vacant, city-owned lots being offered to developers to purchase for $1 each. The lots have assessed values ranging from around $4,000 to nearly $50,000.
Developers can submit applications to purchase the lots through Nov. 15 and can receive up to $150,000 per unit to further subsidize construction costs. Applicants will get a minimum of five lots. Construction costs have skyrocketed since the COVID-19 pandemic due to supply chain issues and elevated labor costs, making it harder for developers to sell new construction homes at more affordable price points.
This development initiative is the latest to be announced as a part of the city's $1.25 billion bond for economic development and affordable housing. City Council approved Mayor Brandon Johnson's five-year, $1.25 billion borrowing proposal in April as a vehicle to provide $250 million per year through 2028 for projects helmed by the city's housing and planning departments. The money — which Johnson has pitched as much needed cash, as the city faces "significant shrinkage" in revenues those departments typically rely on — will go toward a slate of progressive housing and economic development initiatives, funded in part by winding down reliance on tax increment financing, or TIF, districts.
Johnson and Chicago's Department of Housing also recently announced the first two projects to receive a sliver of the $230 million to $250 million in bond money earmarked for the construction and preservation of affordable rental housing. CARE Manor, a 44-unit project in West Garfield Park, will receive $9.6 million and Prairie District, a 100-unit rehabilitation project on the Near South Side, will receive $10.9 million.
"It's really important for us to not just wait for the private market to pick up and get vertical development on the site," said Ciere Boatright, the planning department's commissioner. "... For us, it's an opportunity ... to put the vacant lots back in productive use, repopulate, create density thereby ensuring that our corridors thrive. Retail follows rooftops."
The Missing Middle Initiative was originally expected to start last year but was delayed due to lack of funding, a planning department spokesperson said. Although the bond funds are not available yet as the bond has not come to market, Boatright said the money will be available by the time developers need it for the missing middle program.
Boatright said the price point for a single-family home will likely be below $300,000. For a two-flat, the price range is estimated between $450,000 and $550,000; for a three-flat, $550,000 to $700,000; and for a six-flat, $1.35 million to $1.65 million, according to the planning department.
The median household income in North Lawndale is just above $30,000, according to the city's program guide. There will be no income limits on who can purchase a property, according to the planning department.
The national median sales price for new single-family residential homes sold in August was $420,600, according to the most recent available data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
The start of the initiative began with a partnership between the planning department and the Chicago Architecture Center through a design competition last year to spur ideas for how "to reimagine Chicago's single-family home, two- and three-flat, rowhouse and six-flat typologies to better meet 21st century lifestyles," according to the architecture center's website.
The plan was to have the center select a winner and make the designs available to developers who will be building on the vacant lots. But the center has yet to select a winner, and funding has not yet been found by the planning department to make the architectural resources available to developers at a subsidized cost, stalling the availability of the designs until the next phase of the initiative, according to the department. The architecture center said in a statement that it would announce the competition winners and all of the published work "shortly" and did not respond to the Tribune's questions on why the announcement is delayed.
The planning department has a list of criteria it will consider when selecting developers, including "financial capacity, project density, design quality, relevant experience, and demonstrated ability to complete projects of similar scale and scope," according to the program guide. The goal is to primarily have multiunit properties, not single-family homes, and community members will get to weigh in on the shortlisted developers' proposals, the planning department said. Once the developers are selected, their projects will still be subject to the routine approval process by City Council and various city departments, but there will be no zoning changes needed.
Boatright said this initiative will not only provide more affordable homeownership opportunities, but also more affordable rental housing through the two-, three- and six-unit properties whose non-owner-occupied units could be rented out.
The department has an ambitious goal of getting shovels in the ground by spring 2025 after choosing winning bidders by the end of this year or January, the program guide says. Asked if the vacant land is in construction-ready condition, the department spokesperson said there are "no known issues with the lots." But the program guide states that the city will conduct an additional environmental review prior to the land sales and make further determinations about environmental remediation needs after that.
The program is starting in North Lawndale thanks to the proximity of vacant land, proper zoning codes, access to transit and a nearby commercial corridor and a supportive alderman in the 24th Ward's Monique Scott, according to the planning department. The department said up to 164 units of housing could be developed on the 44 lots under current zoning rules.
And the program is expected to be replicated in other South and West side neighborhoods, with a goal of building as many as 250 to 400 new structures and up to 750 units through 2028. The Missing Middle Initiative is designed as a "residential companion piece" to the existing commercial corridor developments on the South and West sides through programs such as Mayor Lori Lightfoot's cornerstone initiative, Invest South/West, according to the department spokesperson.
Englewood will be the next neighborhood for this development initiative after North Lawndale, with those vacant lots becoming available for purchase on April 1, 2025, according to the planning department. Boatright said other future neighborhoods might include Bronzeville and Auburn Gresham. The program guide for the initiative states that as of summer 2024, the city owns more than 7,000 vacant residential lots.
Scott, who found out about the new program's details on Thursday, said while she is concerned about how the new construction may contribute to rising housing costs in her community, she is hopeful that this program will help her continue to tackle the transformation of roughly 3,000 vacant lots in her ward. She wants to see "thoughtful gentrification" to attract new residents and keep current residents, as well as further economic development, she said.
North Lawndale saw its population decline by around 15% between 2010 and 2022, contributing to the quarter-million exodus of Black residents in the city since 2000, according to the program guide.
"Kids want to walk and see homes and grass and planters and not just lots that are filled with trash and high weeds," Scott said. "I think that this will change the whole look of our community, and also offer incentive for people to come back into the community."
