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Transforming Abandoned Lots Into Affordable Homes
Abandoned lots in Chicago’s South Side are being transformed into affordable homes using modular construction to boost homeownership for residents.
Turn any corner in Pilsen and you’re greeted with vibrant murals that tell stories of revolution and resilience. Home to a majority Mexican American population, eloteros, or street vendors, push Mexican corn and paletas (ice pops). Like many Chicago neighborhoods it’s a community characterized by hope and perseverance, bursting with personality.
The influx of Mexican residents in 1960 marked a new chapter for Pilsen, one defined by dramatic cultural and economic shifts. Pilsen’s tax base shrunk, reducing the city’s capital for schools and infrastructure and triggering disinvestment. Pilsen was effectively a “credit desert,” where restrictive lending practices left families with limited access to mainstream credit. The situation rendered homeownership nearly impossible.
At the time, Pilsen was struggling. Poverty and a shortage of resources fostered increased crime, which further impeded meaningful investment in the community.
But Pilsen’s downturn spurred radical innovation among the community’s most passionate residents. Raul Raymundo, a Mexican immigrant who grew up in Pilsen, saw every vacant lot as an opportunity.
Raymundo knew that home purchase lending creates the kind of capital that can transform communities. In Pilsen, limited access to living-wage jobs, affordable housing, and bank loans meant families were trapped in a cycle of poverty.
In 1990, with just $30,000 in seed money from local religious leaders, the then 25-year-old created The Resurrection Project (TRP), an organization focused on transforming abandoned lots into affordable housing and hosting workshops on how to build credit and buy property.
Since 1995, Raymundo and The Resurrection Project have secured $537 million in investments to construct homes to own and rent throughout Chicago’s southwest neighborhoods and western suburbs. Focusing on cost effective solutions such as modular, manufactured housing built in less time than traditional new homes, Raymundo helped jump-start a new chapter in Pilsen’s history book, one that would have cascading effects across generations of Pilsen residents.
Today, the organization is looking to scale by constructing modular housing in the Back of the Yards community, a majority Latino neighborhood just south of Pilsen.
Raymundo’s work at TRP has not been easy—or cheap. A $7.2 million philanthropic commitment from JPMorgan Chase has lightened the load, and will aid Raymundo and TRP in building or preserving more than 150 affordable housing residences throughout the Chicago area over the next three years. It will also support new financial education programs and provide lending solutions for both first-time homebuyers and long-term homeowners (second mortgage loans and rehab loans, for example).
That support is a portion of the firm’s $30 billion commitment aimed at dismantling the structural barriers Black, Hispanic, and Latino communities have faced on the road toward building wealth.
For its part, JPMorgan Chase endeavors to solve for “the root cause of inequities, going beyond symptoms and institutionalizing change,” says Joanna Trotter, executive director and senior program officer of global philanthropy at JPMorgan Chase. That’s why, Trotter says, the firm seeks partners that are implementing systems-level change for the communities they serve.
As the leader of an organization that has been active in Pilsen since 1990, JPMorgan Chase trusts and invests in leaders like Raymundo. Trotter calls him “an important truth-teller and innovator,” citing TRP’s longtime leadership in developing and preserving affordable rental housing and homeownership opportunities, creating a community development financial institution (CDFI), and bringing responsive financial products to the community among the efforts that make him a both a valuable strategic partner and a fount of community knowledge.
“We have committed to targeting our investments in a way that benefits Chicago’s South and West side communities,” says Trotter. “But how we do that is informed by local organizations and leaders doing the work.”
Raymundo’s vision helped create growth opportunities for his community. Now developers see Pilsen as fertile ground for profit, prompting increases in property value and cost of living. Since purchasing her home in 1990, TRP homeowner Rosa Perez’s house has doubled in value due to this rapid change.
“Homeownership has historically been one of the most important pathways to wealth building in the United States, but it has not been so easily attainable for Black, Hispanic, and Latino people,” says Trotter. “We must invest in new ways of making homeownership attainable and sustainable for households of color. This helps build a stronger economy for us all.” According to Trotter, some of the more promising solutions include TRP’s work in manufactured housing, as well as its partnership with local government to lower the cost of acquiring and preparing land for high-quality, low-cost homes.
While critical, homeownership is just one part of community reinvestment. The vitality of a community is dependent on the availability of essential amenities: accessible medical care facilities, grocery stores, and community gathering spaces, to name a few.