Last Thursday, Asiaha Butler went to check out the very last bit of concrete work that needed doing before final inspection and listing the first property she’s ever developed from start to finish. She intends to sell the home, a two-flat, to somebody in the neighborhood who’s currently renting.

Like so many two-flats on the South Side of Chicago, this one had fallen into disrepair, generations of potential owners denied access to credit because of redlining — the systematic denial of credit to borrowers and neighborhoods usually because they were or are Black. Many two- and three-flats on the South and West Sides of Chicago were torn down completely, leaving neighborhoods checkerboarded with vacant lots.

Butler has a list of 240 vacant lots just in this neighborhood of Englewood that she’d like to develop someday and sell to Englewood renters. But she wants to get a few more rehab properties under her belt before building new. She partnered with local architect Deon Lucas to create Englewood Development Group in 2018. This first property is right along a stretch of 63rd Street where both are also involved in a growing crop of locally led commercial real estate projects to revitalize the once-bustling retail corridor.

“We’re doing it from a community revitalization lens,” says Butler. “Most developers are not doing the work from that lens, and I understand that, but I’m hoping to at least partner with some of those or inspire others to do it from a community lens.”

Butler completes her first project as a developer at a moment when there is much to worry about but also much to look forward to as a new, community-oriented developer on the South Side of Chicago.

COVID-19 is an immediate worry, of course. Butler needs to be able to sell the home at a price that will both pay off the financing Englewood Development Group took out to rehab the property along with a small surplus that she can use as part of her capital stack for the next project.

Butler has gotten a lot of interest from potential buyers, who have been following along her journey largely via social media. She also has a lot of visibility as co-founder and president of the Residents Association of Greater Englewood, a membership-based organization she founded in 2010. It was all-volunteer at first, but she quit her day job to run the association professionally in 2016.

But those buyers will be running up against the historic racial barriers in access to capital that continue to plague predominantly Black communities like Englewood and the rest of the South Side.

An analysis by local public radio station WBEZ found stark inequalities in current mortgage lending — despite Chicago being one-third white, one-third Black and one-third Latino, for every dollar banks loaned in Chicago’s white neighborhoods, they loaned just 12 cents in the city’s Black neighborhoods and 13 cents in Latino areas. Banks invested more money in majority-white Lincoln Park than they did in all of Chicago’s majority-black neighborhoods combined, and the same was true for three other majority-white Chicago neighborhoods.

On top of that, appraisers continue to undervalue properties because they are Black-owned or located in Black neighborhoods, the Chicago Sun-Times recently reported. It’s not just a Chicago problem — according to a Brookings Institution study authored by Andre Perry, homes in Black neighborhoods would collectively be worth $156 billion more if not for the perception of being in a Black neighborhood. (Perry is also a Next City board member.)

For Butler, it means she’s selling a property in predominantly-Black Englewood that may not fetch what it could fetch if you lifted it up and dropped it down inside a white neighborhood with similar income, employment and poverty levels.

In order to even get the financing required to rehab the property, she went to Chicago Community Loan Fund, a community development financial institution, or CDFI. The loan fund has worked out a way to provide financing based on the cost of rehab and their own internal calculation of Butler’s expected sale price, instead of a traditional appraisal. That’s not something traditional banks have shown a willingness to do, especially for a new developer, not to mention one who is a Black woman.

“When I think about the things keeping me going, one is this moment in history when so many systems are being examined for racial injustice, and possibly dismantling them,” says Butler. “The conversation around reparations isn’t a weird thing now.”

The city itself is another X factor for community-oriented developers.

Within the first 100 days of his tenure, Chicago Planning Commissioner Maurice Cox was out in Englewood gathering community input and announcing INVEST South/West, an initiative to invest $750 million in Chicago’s historically disinvested neighborhoods. At the time of the announcement, the city had all those dollars in hand, so it was just a matter of coordinating or allocating those dollars to projects.

Some of those dollars could be in jeopardy now because of Chicago’s looming $1.2 billion budget deficit in the wake of the pandemic. But at least $250 million comes from tax-increment financing districts and developer fees earmarked specifically for projects on the South and West Sides.

The city can direct some of those dollars directly through properties it owns on the South and West Sides. It’s planning to issue three requests for proposals every three months, starting with a trio of RFPs issued in August — including a large piece of land along the 63rd Street Corridor in Englewood. Proposals are due November 24.

So far the experience of working with the city has been a mixed bag, particularly on commercial real estate projects. Residents Association of Greater Englewood has been one of the partners behind the Go Green on Racine, a project looking to take control of multiple properties, including some currently city-owned, around the intersection of 63rd Street and Racine Avenue.

“Things weren’t moving,” says Butler. “We were requesting information and meetings. There were more hoops to jump around that, to me, in my eyes, says ‘we don’t trust you.’”

It’s also alarming to Butler and others when the city sells portfolios of buildings containing hundreds of units, some of them vacant, reportedly without telling anyone — including local aldermen representing the district. The deep-pocketed buyers of those buildings may have plans for those buildings and neighborhoods that don’t include current residents.

If the city chooses to support developers with those kinds of plans, Butler worries it could undermine developers like her by driving up market speculation before residents have had a chance to buy-in.

“There’s a risk that [the planning department] and the city of Chicago could have a whole other plan that could drive up the market that wouldn’t help by driving up the market so the folks we want to sell to wouldn’t be able to afford to stay,” says Butler.

The Cook County Land Bank Authority has been a contrast to the city. Created in 2013, the land bank has acquired nearly 1,700 properties so far, concentrated on the South and West Sides of Chicago as well as some suburbs that were hard hit by the foreclosure crisis a decade ago. The land bank has the power to acquire tax delinquent properties and wipe out the back-taxes owed before putting them back on the market.

The land bank started with a $4.5 million grant from the Illinois Attorney General, but today it operates with no taxpayer support, funded entirely from its sales to developers. As a policy, however, it does not engage in bulk sales of its properties, which would favor larger, deeper-pocketed developers.

So far, the Cook County Land Bank Authority has sold more than 900 properties to more than 525 different developers. According to executive director Robert Rose, half of those developers are Black, and 20 percent are Latino. Butler acquired Englewood Development Group’s first property from the land bank. She’s also grateful for the mentorship she’s received from another Black developer who has done multiple properties through the land bank.

While the bulk of the Cook County Land Bank Authority’s properties have been residential, it has acquired properties totaling 350,000 square feet of commercial space so far. Rose says it has sold four warehouses and a few storefronts, and plans to start marketing its commercial properties more, although COVID-19 has slowed that down a bit. The land bank has also started working directly with Butler, her business partner Lucas and others to target delinquent or vacant commercial properties for the land bank to acquire and re-sell to local developers.

At Chicago Community Loan Fund, Maurice Williams has seen an upward trend of local interest in commercial properties over the past few years.

“Existing [business owners] are investing in their own properties and next door to them to build up the area because they see other people doing it,” says Williams. “I see that going on the South and the West Side. In my opinion that really has increased over the last five years.”

The newest card in the deck for local real estate developers on the South and West Sides of Chicago is the Pre-Development Fund, an initiative from Chicago Community Trust. The fund will make grants covering up to $100,000 in “pre-development costs” — feasibility analyses, preliminary designs, cost estimates, soil testing, environmental studies, project consultants to help prepare project proposals. Developers can even use the grant funds to make “earnest money” deposits to get sites under contract for acquisition.

For-profit developers can access the Pre-Development Fund, but only if they recruit a local nonprofit to serve as a fiscal sponsor — intended to provide a community gatekeeper dynamic.

It’s these early costs that often prevent community-led projects from getting anywhere. Until now, pre-development costs for projects led by community members on the South or West Sides have relied on one-off grants from foundations or pre-development loans. New developers and developers operating on razor-thin margins because of historic racial discrimination against their neighborhoods have trouble covering pre-development costs, unlike larger, wealthier or more experienced developers.

Unlike typical foundation-led initiatives, Chicago Community Trust isn’t putting a fixed limit on the Pre-Development Fund. As the city’s community foundation, it is putting $2 million of its own cash to get the fund started and plans to raise money for it from corporate or individual donors on an ongoing basis. It’s planning to award grants from the fund every other month, and promises to provide feedback to applicants who weren’t selected, encouraging them to apply again later.

The Pre-Development Fund could complement the work of CDFIs like Chicago Community Loan Fund, which can put more of their capital to work for construction or long-term financing instead of riskier pre-development loans. Another CDFI, Community Investment Corporation, just announced it has raised capital to make $330 million in loans available for acquisition, rehab and construction of residential properties on the South and West Sides.

“[The Pre-Development Fund] is perfect for my next project,” says Butler. “As we’re having conversations about Go Green on Racine or as we’re talking about INVEST South/West, I’m hoping that Englewood Development Group becomes at least a small mom and pop development group that could continue to build its capacity and do more.”