3C Affordable Homeownership Modeling

Connecting Capital and Community (3C) aims to increase equitable housing opportunities and strengthen local investment ecosystems. SB Friedman assisted 3C in quantifying the existing gap between low- to moderate-income homebuyer purchasing power and development costs of affordable single-family homes in the East Garfield Park and Humboldt Park neighborhoods of Chicago in today’s lending environment. 

SB Friedman constructed a dynamic and interactive model that allows users to test interventions in homebuyer assistance, lending and/or the development process to determine the greatest impact for the 3C initiative moving forward. Within the model, we synthesized real-time data from 3C initiative team members including development costs, financing costs, lending products, and homebuyer assistance programs. 

The model helped identify key factors driving the affordability gap for Chicago’s prospective homebuyers. It is also a tool that can be used to evaluate the impact of alternative combinations of homebuyer assistance programs, development typologies and lending products to most effectively reduce or close the affordability gap. Finally, the model has helped identify key policy levers and future interventions that The Chicago Community Trust, 3C partners, lenders and public entities can undertake to advance affordable homeownership, such as: creating a new low-interest loan product with a 40-year amortization period; and establishing a program to alleviate developer costs, including streamlining the provision of City land. 

Results: In October 2023, SB Friedman delivered the dynamic model and a briefing book documenting our findings. These tools are being used to help support policy change and attract capital to address affordable homeownership in Chicago.