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Is Invest South/West Worth Continuing? Looking at Chicago’s Neighborhood-Development Challenges

Published: May 15 2023


“One City, 50 Wards: Does the City That Works Really Work?“, a joint series from Crain’s Chicago Business and the University of Chicago Center for Effective Government, explores the connections between how Chicago’s city government is designed, how it functions, and how it performs. You can learn more and read other articles from the series here.

By: Steve Hendershot

One function of Chicago’s City Council is to provide legislative continuity amidst the shifting priorities of different mayoral administrations. That’s especially relevant to community economic development programs such as Invest South/West, outgoing Mayor Lori Lightfoot’s signature initiative to catalyze development on Chicago’s South and West sides. The success of such programs often depends on sustained commitment as mayors come and go. Incoming Mayor Brandon Johnson has sent mixed signals on whether he’ll continue to support the associated projects.

Is Invest South/West worth seeing through? Brett Theodos, senior fellow and director of the Community Economic Development Hub at the Washington, D.C.-based Urban Institute, analyzes Chicago’s neighborhood-development challenge.

CRAIN'S: First, why is it hard to stimulate development in these neighborhoods — both in terms of achieving success and also on aligning on the right approach to get there? 

THEODOS: Part of the challenge is that Chicago is big, and it has a lot of neighborhoods that could benefit from investment. Said differently, it has a lot of neighborhoods that the private market has passed by. And so, the city's resources, while robust and important, are just not on the size or scale needed to mobilize and spark market interest in activity and all the neighborhoods that need it.    That leaves of a couple possible paths which are not entirely attractive. One is for the city to focus on the neighborhoods that are adjacent to current market strengths — places where the market could go next. You’re building out from an area of strength, and it doesn’t cost as much to spur development. It’s a good strategy from an economic development perspective — it’s actually how economic development works, how it actually can happen, instead of how it should happen. But it's dissatisfying from an equity perspective and a wait-in-line perspective, because you’re not addressing the areas of the city that aren’t adjacent to areas of strength.     A second option is make a difference in a place by going big enough to truly affect it. You can catalyze a market with half a billion to a billion dollars of spending in a neighborhood.     The third option is to spread it around different neighborhoods. You get the benefit of equity and you get the benefit of appearing to help everyone. You also get the reality of not actually achieving change in a place. You can do some nice projects here and there, and benefit the people who are directly affected by them, but it's just not sufficient size and scale to change a neighborhood.

That sounds tough to square with the traditional job description for Chicago’s aldermen, which starts with advocating for the interests of the wards they represent. You’re saying they’ll need to embrace a more citywide perspective? 

Yes. If we take all the resources and divide them by 77 — equally for each of Chicago’s neighborhoods — that's not going to work.

Assuming its leaders can get on the same page, how well equipped is Chicago to engineer turnarounds in some of these neighborhoods? 

The positive news is that the city does have influence and it does have resources — not just the city's own resources, but also its control over a lot of the federal dollars and state dollars to that flow to it, and has its own set of low-income housing tax credits that it gets to allocate. 

Chicago also has sophisticated mission investors. The ecosystem is strong on the small-business side, the multifamily affordable-housing side, the affordable homeownership side, even on the commercial real estate side — and there are philanthropies that really care about Chicago. The tools are there, the knowledge is there; there's not a need to invent actors in the ecosystem. So there's lots of strength to work from, and that's not true everywhere.     What Chicago needs is the resources and sustained commitment to see it through. And that can require hard choices and trade-offs.

What should all of this mean for Invest South/West? If the mayor-elect opposes those projects, should the council fight for them? 

I kind of don't know what he wouldn't like about it. Maybe it has a new wrapper or brand because it’s so associated with Mayor Lightfoot, but these projects are located in the communities where his constituency comes from, and they represent upstream solutions to this broader system of ills that creates the crime problem. He may be much more human services-oriented or schools-oriented than oriented toward place-based infrastructure, but I’d be surprised if there's actual resistance to these projects.