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Housing Bulletin: Low-Income Housing Developer Hit Hard by Downturn

On Monday, February 9th, Duane Ehresman received a Chicago Neighborhood Development Award for his work preserving 153 low-cost apartments in five buildings in North Lawndale. It’s the latest project in Ehresman’s 28-year career of creating and managing affordable rental housing in Chicago; in that time, he has had a hand in the renovation of almost 1,500 housing units for low-income people…

On Monday, February 9th, Duane Ehresman received a Chicago Neighborhood Development Award for his work preserving 153 low-cost apartments in five buildings in North Lawndale. It’s the latest project in Ehresman’s 28-year career of creating and managing affordable rental housing in Chicago; in that time, he has had a hand in the renovation of almost 1,500 housing units for low-income people.

About half the buildings Ehresman has renovated were abandoned or vacant before he took them over; some others were occupied but infested by rats. Honored three times as a “Good Neighbor” by the Chicago Association of Realtors, Ehresman now owns and manages 550 apartments in 19 buildings in Chicago’s Austin, West Garfield Park, and North Lawndale neighborhoods.

But with vacancy rates in his buildings soaring over the past two years Ehresman is not sure he will make it through the present economic storm. In his Austin buildings, 38 percent of the units are vacant, while vacancy at his North Lawndale project—five 1920s-era buildings in a three-block area at South Independence Boulevard and Arthington Street—stands at 20 percent.

“Since I bought my first building in 1989, I hadn’t seen more than 7 percent vacancy,” Ehresman told me last week as we walked through the North Lawndale buildings. “In 2001, I was 3 percent vacant. I’ve made it through other recessions, but this one has hit us harder.” And if things don’t turn around this year? “I can’t survive,” he said. “This [his apartment portfolio] has to maintain itself. If it doesn’t pay the bills, I can’t keep going.”

Ehresman moved to the West Side of Chicago from downstate Illinois in 1979 with his newly minted degree in theology, sure that he would find a way to put himself to use easing the area’s social inequities. He soon discovered that low-quality housing ranked as one of the greatest challenges in Austin, and he has worked to improve the situation ever since. “When you get people into good housing, it empowers them,” he said. “It gives them something they can hold on to.”

As you can see in the video, the North Lawndale buildings provide decent, modest housing. Ehresman bought them in 2006, part of a 100-building portfolio seized from a slumlord by the city and the U.S. Department of Housing and Urban Development. Ehresman says that he paid $150,000 for the buildings—about $1,000 per apartment—and then spent $6 million to restore them to a good but no-frills living standard. His crew of 20 workers, most of them West Side residents, accomplished the lion’s share of the labor; for the past two summers, he has also put 25 to 30 neighborhood kids to work painting fences, cleaning floors, and performing other nonskilled jobs. “It gives them money, teaches them responsibility, and provides them with some job skills,” Ehresman said.

The completed units—four buildings are done, and the last should be finished by March 1st—have large closets, refinished hardwood floors, rebuilt rear porches and steps, and new kitchen and bath plumbing, appliances, and cabinetry. Rents run from $475 for a one-bedroom apartment to $1,000 for a three-bedroom apartment (heat is included). “People can’t even afford that, with the economy where it is,” Ehresman said. He recently learned that a woman who had rented a four-bedroom apartment, ostensibly for herself and her three children, had brought in six more people in order to cover the rent. “Many of my tenants make $20,000 to $30,000 a year,” Ehresman said. “They are working-class or lower middle-class folks. These people are suffering in this economy.”

And as a result, so is Ehresman. “In a year from now,” he said, “I might not be here.”

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