PTR: Real estate discussions in Chicago generally focus on select city neighborhoods and the suburbs. Tell me about the real estate opportunities on the city’s South Side.

LaShawn Davis: The real estate opportunities on the South Side were a best kept secret, but that is no longer the case. There are many investors who have paid attention to the trends, and know these neighborhoods amenities – for example, the South Shore neighborhood, which is close to the lake and features golf courses and some of the city’s most beautiful, significant architecture. Investors are realizing those benefits.

Homeowners realize it also, but there is some disconnect. There is limited access to property since the crash – neighborhoods such as South Shore, Englewood and Woodlawn have lost quite a bit of equity. South Shore experienced significant growth during the boom years, but there was also a disproportionate amount of bad mortgages in those areas, so there was almost a blighting effect during the downturn.

So now, you have foreclosures throughout and more foreclosures to come, and Warren and I are advocates for consumers having access to those properties, as opposed to calling the bank and asking to buy it. The bank, which may not even have a consumer renovation product, tells the consumer, ‘No, you cannot buy this home, it is not livable,’ and then they stop right there; the consumer is stopped in their tracks, unaware of the options available to them.

Also, that boarded-up property is often inaccessible to consumers. Even if a consumer does their homework and learns what bank owns it, that bank does not make the property accessible to a neighbor, and instead the bank sells it to an investor for pennies on the dollar, when that neighbor probably would have paid double the price; and often, the investor holds the property or rents it out, rather than selling it. This market is driven and influenced by investors, rather than consumers.

PTR: What are some of the strongest housing markets in the South Side?

LaShawn: Woodlawn is one of the strongest neighborhood markets, as well as Bronzeville. Although Bronzeville saw the same rapid growth and decline as South Shore, it is on its way back up because of its beautiful housing stock and proximity to the Loop.

Until very recently, Woodlawn was an underserved area with quite a few dilapidated properties, but many people are learning about the area, and for one simple reason – there is not enough housing left in Hyde Park for professors, doctors and researchers. There is just no more housing stock, so those residents began migrating past 59th, where the school of law is located, and the university police has expanded its presence to include Woodlawn. Additionally, the university has begun constructing facilities there, and private developers are building high quality new construction and gut rehab homes, so you see a real rise in value in the area. That rising value is tangible due to renovation, not just market factors.

A couple other communities that are on the up and up are Washington Park and Greater Grand Crossing. The University of Chicago is offering incentives, in the form of down payment assistance, to encourage employees to purchase in those areas, and is playing a role in revitalizing those communities. They did the same thing with Woodlawn, but with how that area has progressed, it no longer qualifies as an “underserved” area, so they have expanded it to include those two neighborhoods as well.

PTR: And the Obama Presidential Library will no doubt add to those trends.

LaShawn: Absolutely! With that possibility – we know it’s likely to be on the South Side somewhere near the lake, whether it be in Washington Park or Jackson Park – it definitely adds another level of interest to the area, which already features considerable amenities: people ride their bikes along the lakefront; the areas are not congested; they are equally, if not more beautiful, than other neighborhoods in the city; we have the South Shore Cultural Center, which is an amazing piece of architecture and has a very rich history of Chicago; we have commercial corridors with considerable potential, and a Metra line that goes through the area.

Warren: Another thing to consider is where the money going to come from to revitalize the homes around the library, or any of the adjacent communities. You can only flip so many homes in the area, and the existing housing stock will remain dilapidated and in bad shape. Meanwhile, the VAR loans we spoke of earlier will go to one thing, and one thing only – revitalizing the homes. That is what makes it such a big opportunity, especially when you consider HUD’s Neighborhood Stabilization Program, which is also a comp creator. HUD does not have the resources to revitalize every home in the community, but what if we combined that program with our renovation loan proposal? This stands to change communities across the country, and we can start it right here in Chicago.