'A Virtuous Circle': Healthcare Meets Affordable Housing In Model Chicago Development

Mixed-use housing developments commonly feature retail space, fitness centers and restaurants, but another offering is being added to the mix in one low-income Chicago neighborhood: healthcare.

Ogden Commons in Chicago’s North Lawndale neighborhood is part of a growing affordable housing trend that is seeing hospitals and clinics open smack in the middle of the communities they serve. For healthcare organizations, the arrangement brings real estate cost savings and a prominent location for services. For residents, it offers care just steps away, as well as homes for medical workers.

“How we've described it ... is a virtuous circle that combines housing, healthcare and jobs, and all of those things exist in tandem on the site," said Jeff Head, vice president of development for Habitat Co.'s Habitat Affordable Group.

Habitat is developing the project that will include medical offices from Sinai Health System. 

"There are a lot of low-income workers in the hospital, and this is a way for them to have quality housing and live close to their jobs, potentially avoiding the need to own a car."

The $200M development will sit on a 10-acre site that Sinai, a local business owner and the Chicago Housing Authority previously owned, and it represents the city’s largest opportunity zone project.

Habitat is developing 350 mixed-income units and 120K SF of commercial space at the site. Some of that space is filled by traditional retail — a Momentum Coffee Shop, a Wintrust Bank location and a restaurant are already open on the ground floor. But Sinai will lease the remaining commercial space, providing residents with an outpatient surgical center, an expanded dialysis center and a digestive health center.

There will be an urgent care center on the ground floor of the development too.

“We thought that the whole would be greater than the sum of the parts," Head said, adding the partnership with Sinai allowed his company to acquire a larger site than originally planned while offering a wider combination of commercial uses and services.

Phase 1 of the project, completed in 2021, involved building a 55K SF medical office building anchored by Sinai’s One Lawndale Community Care and Surgery Center. Phase 2, getting underway this year, will include the development's first residential units.

Sinai Community Institute President Debra Wesley said the organization was moved to enter the partnership to provide high-quality care to community members impacted by racism, health disparities and historical inequities. In other words, the population that needs it most, she said, citing a 14-year life expectancy gap for those in the neighborhood.

“When you look at the indicators that would lead to that, you're talking about chronic diseases that have some environmental issues, whether you're talking about asthma, cardiovascular disease, diabetes,” Wesley said. “Unfortunately, these are some of the diseases that go along with challenges that our community that has been disinvested in for many years, this is the end result, and so Sinai wanted to be proactive.”

Centering affordable housing around healthcare isn't new, though it is still uncommon. Elsewhere, Ryan Cos. is developing a new mixed-use project that includes a healthcare center in St. Paul, Minnesota, and nonprofit Mercy Housing was just selected to build a housing community that includes a health clinic aimed at serving Denver's American Indian and Alaska Native populations.

But more is needed across the country, especially in the wake of the coronavirus pandemic, said Richard Townsell, executive director of Lawndale Christian Development Corp. and chair of the housing committee for the North Lawndale Community Coordinating Council. In North Lawndale, 44% of households had incomes below $25K between 2016 and 2020, according to a July 2022 report from the Chicago Metropolitan Agency for Planning.

“I don't think we have the luxury of separating issues and saying they're just housing or it's just healthcare,” Townsell told Bisnow. “Transportation can't be thought of in a vacuum — or healthcare or housing or parks or economic development or workforce. They can't be thought of in a vacuum. They've got to be integrated, and in order to have a real community plan, you’ve got to look at all the things that it takes to have a healthy community.”

Habitat recently announced it received funding for the second phase of the development and has broken ground on a 92-unit apartment building at 1325 South Washtenaw Ave., which will offer 90% affordable housing. Habitat is working with Sinai on an employer-assisted housing program for some of the units, Head said.

“I think there'll be a strong presence of people from the healthcare community, as well as just people in the local community that are anxious for the opportunity to live in improved housing,” Head said. 

That's also true in Detroit, where Detroit Pistons owner Tom Gores announced two housing developments near Henry Ford Hospital, including converting Henry Ford Health's headquarters into apartments and building a new building nearby. Henry Ford Hospital is also expanding, though the projects are being developed separately, according to The Detroit Free Press.

“Sometimes it can be literally like amassing the pieces of a puzzle, where you have to make sure that the requirements for each kind of capital infusion, that those requirements are met,” Liz Rogers, a Detroit-based partner at law firm Taft who specializes in real estate law, told Bisnow of how the Detroit project came together. “So sometimes, you're moving the pieces around to make sure that you can fulfill all of their requirements in connection with that capital and that the timing works for the development itself.

“It's a pretty complicated process, and you're always moving those pieces around until you lock in on something that works and that allows developers to check all of the boxes.”

Developers across the country are thinking broadly about what it means to have healthcare integrated within their housing developments. Hudson Valley Property Group surveyed residents at its buildings and saw healthcare was a common concern.

The group has since begun partnering with hospitals across the country, including University Hospital in Newark, New Jersey, and Johns Hopkins Hospital in Baltimore to offer health screenings and education at their affordable housing developments, particularly for seniors. Some have a social worker on-site as well.

“It's allowing these people to remain independent but have better healthcare,” HVPG Director of Asset Management Richard Doetsch said. “It’s something that we're seeing in the affordable world [that's] sometimes lacking.” 

Combining housing and healthcare in mixed-use developments can present some challenges like hospital teams learning to work with housing developers when hospitals are used to owning their properties.

“I think it’s a very good partnership, but it's not natural necessarily for either party,” Head said. “But there are lots of cross-benefits for both of us. I think that the benefits are greater than just the business benefits because of the community development components and the long-term assets that we're building in the community.”