The foreclosure calamity is hurting communities all over Chicago. Some struggling neighborhoods that were experiencing a rebirth, are now finding the current economic crunch is putting some of those efforts on pause. Woodlawn is one of those neighborhoods, and its leaders are angling for an infusion of federal cash to put things back on track.

Related:
View a list of HUD-NSP’s top national receivers [pdf]
View an allocation of HUD-NSP funds throughout Illinois [pdf] 

Mattie Butler and I are driving around Woodlawn, south of 63rd Street. She has a common refrain as she points out the flaws dotting many blocks.

BUTLER: This building here, it was a conversion. Now these were built new. Down further you’ll see some conversions but they’re all sitting pretty empty. The developer almost lost his shirt on this one, he said. 

Butler pointing out developments Butler runs the Woodlawn East Community and Neighbors, or WECAN, a nonprofit promoting affordable housing. One property price tag that we drive by really tickles her.

BUTLER: From $295,000…I don’t think so.

This place and vacant properties in the neighborhood worry long-time resident and activist Butler. From the 1960s through the 1990s, Woodlawn’s population dropped, vacant properties popped up and the area was stripped of its retail. Arson posed a huge problem.

But more than a decade ago, a new crop of housing construction began. Woodlawn’s proximity to Lake Michigan and the University of Chicago has made it attractive to developers. But some of those gains are now vulnerable. The Woodstock Institute, a policy think tank supporting affordable housing, reports Woodlawn has one of the highest foreclosure rates in Chicago. From 2005 to 2007, the number of foreclosed properties more than doubled to 261.

Back in her storefront office on Stony Island, community activist Mattie Butter says she has a solution. She tells me the answer is to convert these condo properties back to rental apartments.

BUTLER: Recapture some of these places that have already been foreclosed. Because if we don’t have it, these buildings are going to become a burden to the community and become vacant land again. We’ve already had our share of vacant land, we don’t need more of that.

Her idea isn’t farfetched. The federal housing department is doling out emergency assistance to cities so they can acquire and redevelop foreclosed and vacant properties. The plan was announced in late September. Chicago is only second to Miami-Dade County in the amount of funds coming, $53 million. Officials have until December to tell the feds how they will spend the money; then they have to spend it over the following 18 months.

SAHLI: Our goal is to acquire those properties in a strategic way and make a difference on a block.

Ellen Sahli is Chicago’s housing commissioner. Her office is responsible for submitting the Chicago plan to Washington. She hasn’t named the neighborhoods that will receive any of that pot of money, but she says the department is working with communities groups to get properties…

SAHLI: back into the hands of an owner-occupant who will live there or in the case of a six-flat building, inter-rental housing, whatever that might be.

The city has no plans to be a landlord. Sahli says options are turning properties over to neighborhood housing groups to rent them and providing financial assistance to new buyers. Meanwhile, Kevin Jackson, of the Chicago Rehab Network, a housing advocacy group, sees an opening in how to use the federal money.

JACKSON: We want to think thoughtfully about how do we make sure that there is housing opportunities for people with limited means. This provides a place to redo it, think anew and make affordable housing a priority in all neighborhoods of the city.

There’s one longtime Woodlawn developer who’s optimistic even though he has condo units that aren’t selling and another project, an anticipated artists loft, that’s now on hold because of the economic slowdown. Andy Scholnik shows me around a condo that’s been sitting, unsold for months, at 66th and Kimbark.

SCHOLNIK: Me, as a hunker down strategy, I’m concentrating on rentals, which is something that’s kind of recession proof. It’s not an attractive business, it’s not a fun business, it’s not a hugely profitable business. But it pays the bills and provides a social service.

In the past two months, Scholnik has bought eight buildings in Woodlawn. He’s going to turn them into rentals. Some of them federally subsidized.

I’m Natalie Moore, Chicago Public Radio.