In the 1990s, the Department of Housing and Urban Development, the Chicago Housing Authority, and the City of Chicago developed plans to tear down the public housing high-rises in Chicago and replace them with new mixed-income neighborhoods that would include units for public housing residents as well as market-rate units. Recently, it has been difficult to sell some of these units and the neighborhoods:

“Every single Plan for Transformation (community) is in exactly the same predicament,” said Ziegenhagen, vice president of operations. “They’re looking at their pro forma and they’re looking at a huge loss. The lenders have been more willing to work things out with these developments because they invested in them knowing they were really community development, and we were all assaulted by the same economic development.”…

Even in the good times, Williams said, buyers in a development like Oakwood Shores, on the site of the former Ida B. Wells housing complex, had to be what he calls “trailblazers.”

Now, those trailblazers aren’t happy because the price cuts of 25 to 35 percent have negated their equity, while their property tax bills have increased. Newer buyers need to be trailblazers who are much better educated about just what it is they are buying into at a Plan for Transformation community, Williams said…

“If you believe in real estate, you just have to believe that you keep building a neighborhood. Otherwise, you’ll continue to have a decline in the values of the existing neighborhood. These transformation sites are hard work,” Williams said. “This is missionary work. I didn’t start out thinking this is missionary work, but that’s what I think I’m doing now.

Some of this is certainly due to a depressed housing market. However, this also sounds like it is part of the growing pains of these new mixed-income neighborhoods: even though the units might be on in desirable locations, particularly at the Cabrini-Green site, some homebuyers might be turned off by the idea of living near public housing residents or being part of a newly-formed neighborhood and having to be “trailblazers.”

It will be interesting to see down the road whether this is just a blip in the development of these neighborhoods which were supposed to be transformational or whether they hint at deeper issues that are exacerbated by this economic crisis. I assume time will help take away some of the stigma of these neighborhoods, particularly their historic connection to notorious public housing projects, but this will still be a process.