Could Obama library lift Woodlawn's housing market?

By Dennis Rodkin

August 04, 2016
Workers were creating a mural July 29 on a Marquette Road underpass in Woodlawn. Photo by Dennis Rodkin
Workers were creating a mural July 29 on a Marquette Road underpass in Woodlawn.
PHOTO BY DENNIS RODKIN

President Barack Obama isn't the only one who picked the Woodlawn neighborhood for his next construction project.

In recent months, three developers have launched homebuilding projects in the South Side neighborhood, staking their claims not only because they knew the Obama Presidential Center might go there but because Woodlawn has an air of inevitability. In a neighborhood of 12,000 housing units, it's just a trickle for now, but real estate developers and investors hope it's the beginning of something bigger.

"The president's choice is a glowing sign for the future of the neighborhood, but even without that, this is the time for Woodlawn," said Fred Spencer, a partner at KMW Communities.

The president's library will go on a 20-acre site along Stony Island Avenue in Jackson Park, on the neighborhood's eastern edge.

With its promise of a glittering facility dedicated to an ex-president and the restaurants and retail that go with it, the Obama center will draw foot traffic to the northeast edge of Woodlawn—and possibly have a broader halo effect spreading to surrounding blocks.

'OUR MOMENT' IN WOODLAWN

Spencer is counting on that. In June, Chicago-based KMW disclosed plans to build 25 homes—a mix of houses, townhouses and condos—on a site about six blocks west of the Obama library location. They'll be priced from about $300,000 for condos to $600,000 for houses.

Also rolling out is a group of eight eco-homes on Marquette Road, six blocks from the library site. The developer, Greenline Homes, which will hold its first open house this weekend, will announce two more groups totaling nine houses later this year, said principal Benjamin Van Horne. And last month, a group called Preservation of Affordable Housing unveiled plans forTrianon Lofts, a 24-unit project that it says is the first market-rate rental housing built in the neighborhood in recent memory.

Into that residential mix, add a $27 million charter school that the University of Chicago is building on 63rd Street, six blocks from the library site.

"We're having our moment with all this construction," said Lyletta Robinson, who lives in a Woodlawn townhouse she bought in 2001 and, as the Woodlawn Wonder, tweets news about the neighborhood. "It's about time."

Robinson and Spencer—who also lives in the neighborhood—both said Woodlawn is benefiting from spillover out of northern neighbor Hyde Park, quick commute times to the Loop and something that drew the Obamas: woodsy, historic Jackson Park, one of the city's first great parks.

Woodlawn's for-sale housing is inexpensive: The median sale price of a home sold in the neighborhood in the first six months of the year was slightly more than $74,000, compared with $215,000 citywide and $223,000 in adjacent Hyde Park. About three-quarters of the households in the neighborhood are renters.

Most of the new construction is concentrated in north and east Woodlawn, near the park and the University of Chicago in an area where the incidence of crime is lower than on the west side of the neighborhood.

"When you look at a map of Chicago objectively, which I can do because I'm an outsider, Woodlawn is an ideal location," said David Pezzola, CEO of Icarus Investment Group, a New York-based investor that owns about 300 apartments in Chicago. Since 2013, Icarus has bought, rehabbed and rented out 70 units in Woodlawn.

The library "is the icing on the cake that's already here, the thing that really shows it's not just hype out here in Woodlawn," Pezzola said. "This is real."

Since the housing bust, investors have been attracted to Woodlawn and to the other contender for the library site, Washington Park, by the potential for healthy profits in turning around distressed properties.

Steve Konstantopoulos, a co-owner of Northfield-based Axonas Realty, said units in multiflat buildings that need rehab go for about $50,000 and that, after fixing them up, developers have been selling the units for as much as $100,000. Axonas doesn't sell but rents its properties, which Konstantopoulos said amount to 150 units in Woodlawn.

Many of those properties are the detritus of the last boom, in the early 2000s when Woodlawn was also rife with development plans. In the bust years, Woodlawn had one of the city's highest rates of foreclosure, according to the Institute for Housing Studies at DePaul University. In 2009, there were 4.5 foreclosure auctions for every 100 residential parcels in Woodlawn, the second-highest rate among Chicago's 77 community areas, according to IHS. The figure fell back down to 1.7 last year, the fifth-highest rate in the city.

Robinson, who moved in during the last building boom, the years leading up to 2006, sees a difference between then and now: "The institutions are coming in."

She means both the Obama library and the University of Chicago's turn south into Woodlawn. Since 2009, the university has opened a 787-bed dorm on 61st Street as well as its Reva & David Logan Center for the Arts on 60th, on the northern rim of Woodlawn. Both have southward orientations into Woodlawn, a neighborhood that campus buildings used to turn their backs on. The charter school building on 63rd extends the university presence a few blocks farther south.

Greenline's Van Horne was part of the earlier Woodlawn boom. In 2003, he converted 24 apartments on Maryland Avenue into condos. But as housing went bust, he struggled to sell the last few units and shifted his operation to North Side homebuilding.

With the Marquette Road project, Van Horn is back in the neighborhood. In light of all the residential and presidential projects going on, he said, "I'm much more confident about Woodlawn than I've ever been."