Historic Chicago Schools Converted into Affordable Housing
A notable development trend in Chicago involves the adaptive reuse of historic former school buildings into affordable housing communities. These projects transform underutilized public assets into cash-flowing multifamily properties, addressing the city's need for more affordable units while preserving historic architecture.
- The financing for these adaptive reuse projects often involves a complex capital stack, layering public and private funding sources. For instance, the Earle School Apartments, a $33.5 million project by Gorman & Co., utilized Low-Income Housing Tax Credits (LIHTC), historic tax credits, and $4.7 million from the Chicago Department of Housing. This multi-layered financing is common for deals that convert non-traditional properties into affordable housing. - Developer Svigos Asset Management has created a niche in converting former Chicago Public Schools into market-rate luxury apartments, including the Mulligan School in Lincoln Park and the Peabody School in Noble Square. Rents at the Peabody, for example, range from $3,000 to $4,200, demonstrating a different investment thesis from the affordable housing model by retaining historic features like chalkboards and high ceilings to attract premium tenants. - The supply of these properties is directly linked to the 2013-2014 closure of approximately 50 Chicago public schools under then-Mayor Rahm Emanuel. Developers like Gorman & Co. were able to purchase these assets for relatively low prices; the Earle School property was acquired for $200,000 in 2017. - Not all school conversions target multifamily rentals; some projects involve creating for-sale housing or community-focused centers. In Tri-Taylor, developer Home& purchased the former William King Elementary site and is building 30 new single-family homes priced from $590,000 to $650,000. In Grand Boulevard, the former Overton Elementary is being transformed into a $17 million community hub with event space and gardens, funded partly by a $5 million city grant. - Beyond schools, the city of Chicago is actively encouraging adaptive reuse for underutilized office buildings in the Loop through initiatives like "LaSalle Street Reimagined." This program uses Tax Increment Financing (TIF) to support conversions, such as the $130 million project at 30 N. LaSalle St., which will create 349 rental units, with 30% designated as affordable. - The West Pullman School Senior Community illustrates a successful affordable housing conversion by developer Celadon Holdings. The project transformed a three-building school complex into 60 units for seniors, with rents set for households earning between 15% and 60% of the Area Median Income (AMI), showcasing a model for addressing specific demographic housing needs.
