The fund is supported in large part by the MacArthur foundation, but anyone can make a small or large investment
Benefit Chicago is a local social impact investment fund launched in May 2016. Whet Moser wrote for Chicago magazine at the time: “[Benefit Chicago is] a community-investment vehicle that, on one side, loans money at low interest rates to people and projects that have trouble getting it from other types of financial institutions, and on the other, returns money to investors.”
The fund is operated by Calvert Impact Capital (which operates other funds), was seeded by MacArthur Foundation, and is advised by the Chicago Community Trust (among other organizations).
For as little as $20, anyone can invest their money online into Benefit Chicago knowing that it will be loaned to locally owned small businesses in Chicago based on social impact goals at a low interest rate and presumably without the kind of discrimination that Black and Brown small business owners suffer from when trying to get loans from big lenders.
I invested a very small amount of money in Benefit Chicago in 2016. I was excited that there was an investment fund that invested in Chicago businesses that a lot of Chicagoans can afford due to its low minimum. Many investment funds and crowdfunding programs have a minimum investment requirement of thousands of dollars and aren’t not necessarily local. I think the concept of Chicagoans supporting each other collectively through small investments is wonderful. I’m not offering investment advice.
For a while, though, it wasn’t totally apparent to me that Benefit Chicago was making any investments, and so it didn’t seem transparent. Fundrise, on the other hand, which is not a social impact fund, but a real estate investment trust, sends email every other week explaining its new investments, complete with photos and a summary explanation of the loan terms.
The investments Benefit Chicago is making today
Fast forward to October 2019; I still like the program and I saw an announcement from Benefit Chicago’s press relations team about two new investments to be administered through the Self-Help Ventures Fund. The fund is operated alongside the Self-Help Federal Credit Union, which entered Chicago this decade when it acquired Second Federal Savings & Loan and Seaway Bank.
According to the Self-Help website, the credit union and nonprofit fund were created by Martin Eakes and Bonnie Wright in 1980 to help “employees in rural North Carolina form farmworker-owned cooperatives and gain ownership of local mills that were being shut down”. The enterprising people were “stopped in their tracks because they couldn’t get conventional financing”.
Darryl Newell, market president of Seaway Bank, described to me the two projects that the Self-Help Ventures Fund is going to invest $5 million in on the South Side.
Healthy hub in Englewood
The Inner-City Muslim Action Network (IMAN) will use a $610,000 investment to partially fund a “healthy hub” in an existing Englewood building near 63rd Street and Racine Avenue. The project, at 1207 W 63rd St, received a building permit in May. Wheeler Kearns Architects is designing it.
“[IMAN] recognized that there’s a food desert there and they took control of an old building. They’re going to renovate it, have a healthy corner store, a café and eatery, and build some training space and office space.” Healthy food, Newell said, is one of the Self-Help Ventures Fund’s “lending segments” because “a lot of people need healthy foods in a walkable distance”.
The second project that Self-Help Ventures Fund is using Benefit Chicago money for is the conversion of Seaway Bank’s own former headquarters into a community services hub in Chatham. Newell said that “we [the bank] don’t need 40,000 square feet anymore” at the existing building at 645 E 87th St. “We only need 2,400 square feet” so Self-Help conducted a charrette to ask “what do we do with this big old building?”
Disclaimer: MAP Strategies, a Chicago small business where I’m the Director of Urban Planning & Technology, is the permit manager for this project. I am not involved in MAPS’s permit management services.
The former bank building will be renovated into a community services hub by the Self-Help Ventures Fund. Photo: Jeff Zoline
This is Self-Help’s first project outside of North Carolina, where the community development financial institution (CDFI) started, Newell said. From the charrette, Newell said, “We decided that we needed a community services hub.” Neighborhood Housing Services (NHS) will be a tenant, and there will be a small bank outlet, and the remaining space will be rented to non-profits at a below-market rate.
Additionally, Newell said, there needs to be a center for small business owners to gather and meet, given that the Greater Chatham Initiative’s study found thousands of small businesses in the area “and we and Benefit Chicago agreed that they need a professional meeting place”.
Both of these projects sustain part of the mission of the Self-Help Ventures Fund, Newell said, to expand financing capabilities to include “flexible and risk-tolerant capital which can advance small businesses and have a local impact in Chicago”.
The ARO is a form of inclusionary housing, a group of rules used in cities all over the country that require market-rate housing builders to provide affordable housing. In the ARO generally, the developer has to rent or sell 10 percent of the units in a project as affordable in exchange for a zoning change.
And it’s one of the many affordable housing funding programs that Chicago funds or tracks (in this case tracks). Read about the 19 other programs.
My favorite part about the dashboard is that DOH policy analyst Paul Williams said it’s going to be updated monthly, and eventually more frequently as it becomes automated. My second favorite part is that all of the data can be downloaded.
A screenshot of part of the dashboard showing the projects in the West Town community area that have an ARO contribution for affordable housing.
It’s easy to highlight a specific community area and see how many ARO units are (1) proposed, (2) approved by the DOH, (3) have been issued permits, or (4) are completed and accepting tenants.
The West Town community area has the second highest number of ARO units with 43 completed on-site units in nine projects. There are 88 on-site units under construction in 10 projects.
The analysis I’m interested in is how many ARO units are in TOD zones, areas within 1,320 feet (two blocks) of CTA and Metra stations and eligible bus route corridors. The residential project locations are aggregated to a block, so the analysis isn’t entirely accurate, but it’s good enough for this purpose.
These unit counts do not represent the full amount of affordable housing built because of the ARO. Many builders pay an in lieu fee that the city uses to construct or subsidize housing or pay rents for very low income households. In rare occasions, the developer will build their required units off-site. The dashboard has 362 projects in the four stages; we analyzed the 125 buildings that are under construction or completed.
How many on-site units are near transit?
Of the 54 completed residential projects in the ARO dashboard, 23 buildings, 42.6 percent, with 223 units are within one block of a CTA or Metra station; 37 buildings, 68.5 percent, with 364 units are within two blocks of a station.
The map shows the location of completed residential projects with on-site ARO units from transit: CTA and Metra stations and eligible bus route corridors. A project that’s under construction or complete is more likely to be within 2 blocks of transit (a station or eligible bus route corridor) than further away.
Of the same 54 completed locations, 16 buildings, 29.6 percent, with 122 units are within one block of an eligible bus route corridor; 26 buildings, 48.1 percent, with 159 units are within two blocks of one of the eligible bus route corridors. These groups of 16 and 26 buildings may also be near a CTA or Metra station, so there is some double counting of units.
In total, there are 407 completed ARO units in 45 buildings within two blocks of a CTA or Metra station or eligible bus route corridor.
How many on-site units will soon be near transit?
Of the 71 under construction residential projects in the ARO dashboard, 12 buildings, 16.9 percent, with 51 units are within one block of a CTA or Metra station; 32 buildings, 45.1 percent, with 306 are within two blocks.
Of the same 71 locations under construction, 14 buildings, 19.7 percent, with 155 units are within one block of an eligible bus route corridor; 24 buildings, 32.4 percent, with 210 units are within two blocks.
Where the ARO units are was originally published in Chicago Cityscape on Medium, where people are continuing the conversation by highlighting and responding to this story.
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