Real Estate Market Still Slow Despite Incentives

By Veronica Grecu, Associate Editor With only 25 percent of approvals granted to the recently approved low-income housing development on Madison Street, two Oak Park developers are now trying to find alternative ways to gather funds for their $15 million redevelopment [...]

With only 25 percent of approvals granted to the recently approved low-income housing development on Madison Street, two Oak Park developers are now trying to find alternative ways to gather funds for their $15 million redevelopment project at 820 Madison Ave.

Interfaith Housing Development Corp. and Oak Park Housing Authority plan to convert the vacant property into a four-story residential building. The one-bedroom apartments will be available for residents who earn less than $26,400 a year—individuals and single parents with one child. TribLocal reports that the financing process is expected to take at least one more year, and the developers are largely counting on low-income tax credits. But before receiving the tax credits, the developers need approval from the Illinois Housing Development Authority. Given the highly competitive market, the approval rate is very low.

Man Yee Lee, spokeswoman for the Illinois Housing Development Authority, declared that the organization has received 64 applications so far, and it is expected that only one out of four will receive approval. Under these circumstances, construction on the Oak Park low-income housing project could begin toward the end of 2012.

Also in real estate news this week, Chicago’s Plan for Transformation, initiated over 10 years ago by former Mayor Richard Daley, is facing a weak selling market. With developers seeking to quickly sell and thus cutting prices, homes are put on the market for prices sometimes much lower than their original value.

According to the Chicago Tribune, since the first Find Your Place in Chicago began in 2008, 103 buyers have benefited from various purchase incentives secured by the Partnership for New Communities. Despite the incentives of $10,000 the partnership is offering for down payments, a great deal of residential units remained unsold, however: 58 at Parkside of Old Town, 32 at Park Boulevard, 6 at Oakwood Shores, 23 at Lake Park Crescent and 19 at West End. Joseph Williams of Granite Partners, Oakwood Shores’ developer, declared that there wouldn’t have been any sale at all if it weren’t for the partnership program.