WOODLAWN — The new owner of a Woodlawn apartment tower down the street from the planned Obama Presidential Center intends to expand affordable housing at the property, with the goal of limiting displacement in a hot housing market.
Preservation of Affordable Housing closed Tuesday on its $29.5 million purchase of the mixed-income Island Terrace Apartments, 6430 S. Stony Island Ave. The organization bought the 240-unit building from PNC Bank and will manage the property through a subsidiary.
The nonprofit aims to transition all units to being affordable for renters making 30 to 80 percent of the area median income, senior vice president of Chicago operations Bill Eager said.
That’s $27,950–$74,550 for a family of four, for whom monthly rents of about $700–$1,850 would be affordable under federal guidelines.
Island Terrace is a “prominent, almost-lakefront property … and for the city, the state and POAH to come forward and say, ‘Affordability right here at this prominent location is important,’ I think says a lot about where the priorities are,” Eager said.
About 90 of the apartments are under Section 8 contracts, which will be maintained under the developer’s ownership, Eager said.
The remaining units are currently market-rate, but “we hope to put some affordability [protections] on those apartments, as well,” he said. “They’re not going to be all Section 8. A range of incomes will be served through those apartments.”
When a property goes on the market, tenants living in units without affordability protections risk being priced out of their homes, Eager said. The developer is trying to prevent that scenario by pursuing low-income housing tax credits from the state to finance Island Terrace, he said.
“The imminent building of the Obama Presidential Center has fueled … concerns about speculators and skyrocketing housing prices,” Illinois Housing Development Authority executive director Kristin Faust said in a statement. “We are delighted to be able to assist in POAH’s preservation of this and other housing developments in Woodlawn — which is, in many ways, a model for preserving mixed-income neighborhoods.”
The tax credits require developers to maintain affordable housing for at least 30 years, but the state only has a 15-year window revoke the credits back if a developer doesn’t comply, according to the National Housing Law Project.
Regardless, POAH intends to keep Island Terrace affordable “permanently,” Eager said.
The commitment to maintain affordable housing at Island Terrace comes as Woodlawn residents work to prevent displacement in their community ahead of the Obama Center’s planned construction in Jackson Park.
The effort led to the city’s approval of housing protections for Woodlawn last fall.
“When we passed the Woodlawn Housing Preservation Ordinance in 2020, our chief goal was that everyone who lives in Woodlawn now should be able to stay,” the city’s housing commissioner, Marisa Novara, said in a statement.
POAH will finalize its plan to refinance and rehab Island Terrace in the upcoming months, Eager said. Beyond state tax credits, the developer will apply for city funding and private-sector grants, he said.
“This is a really textbook example of how a private developer and local government entities need to work together to preserve these affordable housing properties,” Eager said.
Construction at the property will cost about $28 million, as POAH plans to repair plumbing and electrical systems; renovate windows, kitchens, bathrooms and flooring; redesign community spaces; and improve play areas for kids.
The developer plans to offer financial planning, job readiness training and other services to Island Terrace residents out of its Woodlawn Resource Center at 6144 S. Cottage Grove Ave., though no further details are readily available, Eager said.
Another round of the Renew Woodlawn initiative, which helps low- and middle-income earners buy homes in the neighborhood, is expected to open later this year, Eager said. The city committed $500,000 to the program as part of the Woodlawn affordable housing ordinance.
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