• CJ DiMaggio

Market focus: Soul City, Austin, Chicago

Successful community development means focusing on community.

Highlights

Austin is a community on the move.


One of Chicago’s most historic neighborhoods, Austin is now proving it can overcome the challenges of disinvestment, de-industrialization, and crime by building on its strengths: community, creativity, and caring.


Centered on Chicago Avenue, the Soul City corridor is a new public-private partnership using tax increment financing to envision and build a new westerly gateway for Chicago -- linking the neighborhood’s proud culture to the prosperity of western suburbs, and inviting visitors and residents to enjoy the music and food that are unique to Austin’s resilient African-American community.


Already, signs of progress abound. New businesses are opening, and home prices in Austin in 2020 are up nearly 25% over the previous year.



Soul City: a community vision for public-private partnership


Soul City is a community-wide and city-wide vision for a westerly gateway to Chicago that celebrates the city’s diversity and resilience.


The western portion of Chicago Avenue has been singled out as a future center of commercial development because it is the most stabilized part of Austin and occupies a key thoroughfare linking Chicago and Oak Park.


Beginning in 2013, the Austin African American Business Networking Association (AAABNA) worked with the City’s Planning and Development Department to envision a commercial thrive zone initiative called the “Soul City Corridor” stretching along Chicago Avenue from Cicero Avenue west to Austin Boulevard that would serve as a cultural benchmark similar to the city’s Chinatown or Greektown, where residents and visitors may experience the special music and food that are unique to Austin’s African-American population.


More recently, Mayor Lori Lightfoot has announced a plan called “Invest South/West” to spend $250 million over three years to spur business activity and enhance the quality of life in ten key western and southern neighborhoods, and Austin is well-positioned to capitalize on such investment.



Primed for investment


Austin is one of Chicago’s most storied neighborhoods, with a long history of economic development, social change and economic challenges.


Austin was founded in 1865 as a temperance settlement named “Austinville” that prioritized homeownership, gracious living, and public amenities such as tree-lined parkways. In the early 20th century, Austin grew rapidly as one of Chicago's best-served commuter areas, attracting diverse groups of upwardly mobile immigrants, but its connectivity proved a mixed blessing. By remaining a predominantly residential community, Austin yielded commercial development (and residents’ spending) to neighboring West Garfield Park and Oak Park, which even today boast much more advanced commercial infrastructures.


Due to its ongoing lack of viable commercial development, an estimated 85% of the total disposable income of Austin households is spent in its affluent western neighbor Oak Park each year. This export of wealth deprives Austin of economic development and its residents of employment opportunities. Consequently, Austin’s median income per household is approximately $32,843, compared to the dramatically higher $91,945 of Oak Park. Along with its wealth, Austin exports a staggering share of its labor. Only 3 percent of its workforce is employed within its borders, and almost half of its workforce commutes to jobs outside of Chicago.


Civic and business leaders have recognized that by recapturing its native capital with homegrown retail and employment opportunities, Austin can revitalize its neighborhoods and commercial corridors. Connecting Oak Park to the rest of Austin via Chicago Avenue, Soul City is ideally positioned to facilitate that transfer. Defined as the segment of Chicago Avenue (800N) bounded by Austin Boulevard (6000W) and Central Avenue (5600W), the Soul City corridor is part of the Austin Tax Increment Financing (TIF) district, which has collected over $12 million in financing since its inception in 2007 and apportioned over $2.3 million for investment in public improvements such as streetlights, road resurfacing and alley construction.


This investment serves as the basis for a favorable environment for constructive public-private partnerships in Soul City. In response, several new private businesses have opened along the corridor in recent years — a travel agency, a sit-down restaurant, a bistro, and a sweets shop, among others.



Looking ahead


Continued realization of the Soul City corridor public-private partnership will propel heightened demand for services utilizing the neighborhood’s limited functional building stock. New building designs should recognize that a diverse mix of residential, retail and professional services uses will diversify a development’s income stream and enhance its ability to weather economic headwinds.


The following uses warrant particular attention:


Multifamily housing


Austin is experiencing a shortage of upscale urban housing. Though Austin is still an economically challenged area, approximately 32% of Austin households earn more than the citywide Chicago median, with over 13% earning over $100,000 annually, which strongly suggests that the upscale market is badly underserved in Austin relative to other Chicago neighborhoods. Urban professionals valuing the area’s diversity and its proximity to regional cultural attractions and employment opportunities provide a strong renter base. Rentometer.com valuations for a 2 bedroom / 1 bath renovated apartment suggest an average rent of $1,235 and a 75th percentile rent of $1,410.


Performing arts spaces


Prior to 2020, art galleries benefited from increases in disposable income and in the number of households earning incomes of more than $100,000. In the wake of COVID-19-related political and economic uncertainty, overall annual revenue within the art dealers industry is anticipated to decrease at an annualized rate of 2.2%.


However, we believe that creative re-purposing and cross-marketing of gallery spaces have the potential to liberate additional revenue sources in emerging urban destination markets like the Soul City corridor.




Are you making the most of your opportunities, in Chicago or elsewhere?


Book a consultation with us at info@varamark.com to make sure your project makes sense in today’s market.


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