The Benefits of Co-Location for Affordable Housing
David Block of Evergreen Real Estate on how dual-purpose developments can serve multiple needs of low-income residents and communities.
The U.S. is short more than 7 million homes for extremely low-income renters, according to the National Low Income Housing Coalition. And this gap, calculated using data from the 2019 American Community Survey, has only grown over the past year due to the economic hardship created—or, in many cases, exacerbated—by the COVID-19 pandemic.
Cities need more affordable housing, and while there’s no single solution to the problem, co-location has emerged as a strategy that has proven successful in getting new projects financed and built.
As their name suggests, co-located projects pair housing with other uses—ideally complementary ones that benefit both residents and the surrounding community. It’s a civic-minded form of mixed-use development that allows project partners to tap into various financing sources while lowering construction costs and reducing environmental impacts by building one structure instead of two or more.
While co-located developments, which may involve a mix of public, private and nonprofit partners, can be more complex to plan than a pure residential building, the efficiencies they create can more than offset the time invested in forming a unified vision for the project. With clear social, economic and environmental benefits, they are often an easier sell to those who would otherwise oppose affordable housing in their backyard.
What form might these projects take? Pairing affordable apartments with public libraries has been a popular combination, and one that our firm, Evergreen Real Estate Group, has had success within Chicago. In partnership with the city, Chicago Housing Authority and Chicago Public Library, we developed a pair of co-located library/affordable housing developments, each with 44 apartments for seniors, who, along with disabled individuals, account for nearly half of extremely low-income renter households, according to NLIHC.
Completed in 2019, these projects have been a win-win for the community. Neighbors welcomed the new library, and residents of the connected housing continue to benefit from social and educational opportunities that might not otherwise be accessible. This is especially true for seniors, who can avoid isolation through regular programming while enjoying access to computers, books and other library services and events.
Another example of co-location is pairing two types of affordable housing in the same development. Our firm is finishing construction on Ravenswood Senior Living, a converted hospital that will be one of the first affordable senior communities in the country to offer both independent living and supportive living in a single location—a model that allows residents to age in place as their needs change.
As with the co-located library projects, it is being developed in partnership with the Chicago Housing Authority utilizing a rare combination of public housing resources, tax credit financing and the Illinois Supportive Living Facility program, the State’s Medicaid waiver program that serves as an alternative to nursing home care for low-income older persons under Medicaid.
Co-located projects can also be a good solution in dense urban areas where land is scarce. In Evanston, Evergreen has teamed up with CJE SeniorLife, one of the largest nonprofit health and human services providers in Illinois, to develop a 60-unit affordable rental community adjacent to the existing CJE SeniorLife Adult Day Services center, which provides programming and socialization opportunities for seniors who require supervision during the day.
Residents will have access to programming at the adjacent center and benefit from an existing bus service that provides transportation to community destinations including grocery stores and medical offices. For the city of Evanston, it was an opportunity to serve local seniors while increasing tax revenue from the site, a portion of which had been tax exempt under the previous ownership structure.
As with any real estate development, the success of a co-located project is never a guarantee. And just because you can combine uses doesn’t mean you should—even with the right partners in the right location. Too many affordable housing developments bring retail stores to their first floor because zoning or planning requirements dictate retail uses, without undertaking the necessary planning and diligence to ensure an economically successful retail presence.
But with the need for affordable housing greater than ever, co-location is a tool every developer should consider adding to their toolbox as a means of integrating low-income homes into communities by aligning them with essential services that benefit all.
David Block is director of development for Chicago-based Evergreen Real Estate Group.