Newspaper article The Christian Science Monitor

How Chicago Sparked Family-Housing Boom

Newspaper article The Christian Science Monitor

How Chicago Sparked Family-Housing Boom

Article excerpt

CHICAGO developers call it a "Parade of Homes" and indeed, the shiny new houses, set amid the gritty working-class neighborhood of East Garfield Park, appear as showy and hollow as floats in a parade.

But the group of some two dozen houses is no cellophane and cardboard sham: Single-family homes are springing up today in many Chicago neighborhoods once thought headed irretrievably toward decline.

Chicago is booming with a construction rate of family houses unseen in more than 20 years. The city last year granted 1,268 home-building permits, 88 percent more than in 1994 and more than 10 times the number for 1990, according to Bell Federal Savings and Loan Association in Chicago. Many buyers of new homes are middle-class residents who provide the fundamental source of tax revenue and the engine for local commerce, say developers and housing consultants.

The revival of home construction in Chicago, they say, offers some lessons about how large cities might slow the long-running flight of the middle class to the suburbs.

To be sure, among America's old industrial cities, Chicago is more economically diverse and less subject to extreme swings that disrupt neighborhoods. Moreover, Chicago is riding the crest of a economic-growth wave.

City government has enhanced these advantages by giving developers incentives to turn patches of urban wasteland into sites for trim, two-story homes. "It used to be so difficult to build in Chicago that a lot of developers said, 'Why bother?' " says Steven Hovany of Strategy Planning Associates in Schaumburg, Ill. From the late 1970s into the '90s, family homes were built here at a small fraction of the current rate.

"Now the city has cut red tape and begun to cooperate much more with developers than it used to," says Mr. Hovany, a real estate analyst. The city encourages builders to construct affordable houses by providing subsidies and reducing both permit fees and the price of city-owned lots.

For home buyers, Chicago has committed $50 million in bonds to help families reduce down-payment and closing costs by as much as $2,000 each. …

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