Roots and Roofs: Building Wealth Through Chicago’s Two-Flats

When Mercedes Pickett set out to buy her first home, she wanted to do it in the same way her mom had — by living in a two-flat, renting out the bottom apartment, and making the building into an investment property. 

For over a century, owning and living in a rental property has been one of the most effective ways to build wealth for Black and Latino communities. Yet these quintessential Chicago homes are in danger of extinction. 

This is the story of how a new generation of Black and brown homeowners are pushing back — and improving their neighborhoods in the process. 

Produced by Reema Saleh for Reparations Media | Editorial support from Juneteenth Productions @juneteenthprod2 | Collaboration with Neighborhood Housing Services @NHSChicago | Sound design by Will Jarvis @willyfrederick | Music: Sara Abdelaal, Blue Dot Sessions

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Key words: housing, home, homeownership, homeowner, landlord, mortgage, apartment, two-flat, rent, income, redlining, Black, Latino, solutions, Chi-Flats Initiative, Neighborhood Housing Services 

Transcript

Reema Saleh, Producer: [00:00:00] Mercedes Pickett grew up in a three floor walkup in West Garfield Park, on Chicago's west side. She had seven brothers and sisters, and her mom, Gladys, who raised them all. 

Mercedes Pickett: And my mom, she was the first person who taught me how to love community. So many people on our block saw her as that other mother that they've wanted to have.

Reema Saleh, Producer: Food, clothes, toys, whatever it was, Gladys provided for them and the neighborhood kids. 

Mercedes Pickett: And now that we're all older, she has a new group of young kids that are like, Hey, Mama Gladys! 

Reema Saleh, Producer: Mercedes family has been in Garfield Park for over 30 years. She's lived on the same street, in the same house. A two flat. A multi-unit home with a space to live and space to rent.

Mercedes Pickett: And I think that creates a sense of relief. Like, you don't have to do this alone anymore. You created that support system. So now all you have to do is just share the resources rather than being the one to come out of pocket [00:01:00] for it. 

Reema Saleh, Producer: So, this two flat, it gave her roots. It gave her a source of income. It gave her security.

And for Chicagoans, like Mercedes' mom, home ownership is one step towards generational wealth. So, when it came time for Mercedes to buy a home, she wanted to follow in her mother's footsteps. Buying a multi-unit home to transform not only her family's wealth, but an entire community. 

Mercedes Pickett: I really wanted to create roots in a community where other individuals that I love, that I trust, This is also grounded in why not build a foundation there.

Reema Saleh, Producer: And like her mom, she understood the unique opportunities that Black families have to build wealth and community through becoming landlords. Something that they've been robbed of historically. This is Reema Saleh with Roots and Rooves, Building Wealth in Chicago's Two Flats, [00:02:00] for Change Agents the Podcast.

Here's another thing about Mercedes. She's kind of a nerd. She loves data analysis. Probably more than most people. It's where she does her best work, digging into metrics and making companies and nonprofits more efficient. And when she graduated from DePaul University on Chicago's north side, she wanted to go back to the west side.

It's not just because the math made sense financially. 

Mercedes Pickett: There's so much opportunity in the community that I know and love is there, why not? I could have been investing in Lincoln Park. I could have been buying property in Albany Park. But, like she says, it would have had little impact, the families and the residents and the scholars that hold dear to my heart.

Reema Saleh, Producer: She also wanted a place that would build wealth for her own family. A place where her kids could live someday, and maybe even her [00:03:00] grandkids. And like her mother, she wanted to buy a two flat. If you're not from Chicago and you're thinking, wait, what the heck is a two flat? Relax. It's just a duplex. Or a walk up.

Whatever you want to call a small, multi-unit apartment building. Instead of a big, modern looking complex, think two, three, four, Long, skinny apartments stacked on top of each other. They make up a fourth of the city's housing stock. Once you leave downtown, you'll find rows and rows of them everywhere, especially on the city's south and west sides.

Here's Anthony Simpkins, the president of Neighborhood Housing Services of Chicago. Explaining just what that means. 

Anthony Simpkins, President, Neighborhood Housing Services Chicago: These small residential units, two, three and four flats, they predominantly house black and brown people in low- and moderate-income communities in the city of Chicago. 

Reema Saleh, Producer: They want people to think about affordable home [00:04:00] ownership differently.

than they have in the past. Something that they're trying to accomplish by educating Black and Latino homebuyers that buying this kind of property is even possible. 

Anthony Simpkins, President, Neighborhood Housing Services Chicago: Small landlords represent a way for people that are indigenous to these neighborhoods to become investors in the neighborhoods and improve the neighborhoods.

Reema Saleh, Producer: Historic policies like redlining, which are now illegal, denied lending to Black and Latino people and prevented investment in their neighborhoods. Those families still feel the effects today. In 2019, for every $100 in wealth owned by a white household, a Latino family had just $19. Black families had just $9, according to a report by Pew Research.

Owning and living in a rental property is one of the most effective ways to build wealth for Black and Latino communities. But those landlords are more financially vulnerable than their white counterparts, because of the wealth gap. [00:05:00] Your average Black or brown landlord is still paying off their mortgage.

And the number of 2, 3, and 4 flats in Chicago is dwindling.

Anthony Simpkins, President, Neighborhood Housing Services Chicago: This critical housing stock had been steadily diminishing over time through demolition because of neglect and deterioration in some of our disinvested communities, which meant the stock of housing that low- and moderate-income people could access was dwindling as well.

Reema Saleh, Producer: To make matters worse, during the pandemic, NHS began seeing a troubling pattern. Renters couldn't pay, which meant that smaller landlords struggled to keep their buildings. Two to four flat owners often have a harder time finding help because there are fewer policies and tools aimed at them. NHS realized they could solve both problems: Increase homeownership and affordable housing by becoming a one stop shop for aspiring homeowners on the South and West sides.

NHS President Anthony Simpkins [00:06:00] says it's basically supporting neighborhood development from within. 

Anthony Simpkins, President, Neighborhood Housing Services Chicago: These owner occupants are keeping that wealth in the neighborhoods and they're providing housing for people in the neighborhood. They have a stake in the neighborhood because they live in the neighborhood and they live in the building itself.

Reema Saleh, Producer: This is what Mercedes grew up with. This is what she wanted for herself. And when she set out on her home buying journey, Mercedes had a lot going for her. Her mom already owned a home. She was good with numbers. She graduated from college and had a job as a database developer. But Mercedes knew she needed help to achieve her dream.

Which is how she ended up at a class like this one. 

Naomi Thornton, Senior Housing Counselor, Chicago Flats Initiative: Control over your environment. This is one of my favorite ideas about home ownership. Is there's nobody saying don't paint the walls. There's nobody saying “don't.” 

Reema Saleh, Producer: That's Naomi Thornton leading the class. She's the Senior Housing Counselor for the Chicago Flats Initiative.

Naomi Thornton, Senior Housing Counselor, Chicago Flats Initiative: over your environment, your home that you didn't have before.

Reema Saleh, Producer: It's a program from NHS that helps families purchase small, multi-unit [00:07:00] apartment buildings in low-income neighborhoods on Chicago's south and west sides. On this Saturday morning, the room is full, about 30 people ready for an 8-hour class breaking down everything from how to build up your credit, to getting approved for a home loan and what goes into the home buying process.

Naomi Thornton, Senior Housing Counselor, Chicago Flats Initiative: Um, on here, what are the lender looking for? And so, the lender's looking for a couple different things. I told you they're going to ask for a ton of information, a ton of paperwork. They're also going to pull a credit report. 

Reema Saleh, Producer: Everyone here is on a journey to buy a home, but Naomi says she's seeing more people than ever hoping to buy and fix up multi-unit homes.

Naomi Thornton, Senior Housing Counselor, Chicago Flats Initiative: What I've loved is I see a ton of clients that purchase it and that are living with their families. So, you either have grandma living in there or you've got like your kids living in there. It's a great way to help build this wealth when you're supporting other family members. 

Reema Saleh, Producer: Mercedes still has the giant textbook for when she took the homeowner class, full of notes on who to call and where to get help [00:08:00] for her friends.

Mercedes Pickett: And that class was so fulfilling. Someone may not even understand how to maintain a home, let alone purchase one, because they never had an example. NHS is that example. They are not only the coach, they have consultants that can take you from having the idea to actually having the savings. It's just a lot of opportunity in one space and it's free.

Reema Saleh, Producer: In addition to educating buyers, Neighborhood Housing Services is a certified lender and offers grants for down payment assistance. In the event that things go wrong, NHS also offers programs to prevent foreclosures. It's something that almost happened to Mercedes' mom over a decade ago during the Great Recession.

Mercedes Pickett: My mother was about two months behind on her mortgage. So, my mother [00:09:00] was fearing foreclosure. She went to different banks asking for assistance and the banks saw her property as a potential buy. So, they was not really offering assistance. 

Reema Saleh, Producer: Then one day her mom was at the laundromat, and she came across a flyer.

Mercedes Pickett: A random flyer that she thought was a scam, but she went through so many other resources. She was like, why not? 

Reema Saleh, Producer: So, she called it. Turns out that flyer was from NHS. And it gave her two months of relief, which let them keep their home. Five years later, her mom successfully paid off the mortgage. 

Mercedes Pickett: My mother took us so far.

She was able to manage the home, renovate the home, and make it into an investment property. But there was so much she did not know herself and she kept telling me about the grants that NHS offered once you went through [00:10:00] their programs. She was telling me about their foreclosure prevention so you would never have to be in my situation.

Reema Saleh, Producer: That NHS grant gave their family financial stability, allowing Mercedes, a few years and NHS classes later, to buy her own home. 

Mercedes Pickett: So, this is my office. I spend most of my time here. 

Reema Saleh, Producer: Mercedes bought this two flat in 2021. It's in Garfield Park, just blocks away from the house she grew up in, where she lives with her partner, Antonio.

And she's showing me around the place. 

Mercedes Pickett: Almost everything you see came from a thrift store. So 

Reema Saleh, Producer: an easel, some mannequins, a telescope, telescope,

Mercedes Pickett: um, even this, uh, Buddha Head thrift store. 

Reema Saleh, Producer: And it's been a work in progress. When Mercedes first bought the home, there were tenants living on the first floor. [00:11:00] They just moved out last month, so she and Antonio, they're getting ready to renovate.

Antonio Pickett: We're going to end up going through the walls, cleaning the walls, painting the walls, doing the floors and borders. We're going to have to go downstairs and do that same thing all over again. 

Reema Saleh, Producer: They'll renovate the space, make it nice, and then do exactly what her mother did. But for as nice as she's trying to make the space, they have other concerns.

For example, the lot next door, it's caused a lot of problems. 

Mercedes Pickett: There were syringes, um, in the grass. It was packed drug sales, pass outs, because our garage creates a blind spot.

Reema Saleh, Producer: One day, they got footage of people hanging out and eventually running from the police right next door. With the grass overgrown, their garage made a blind spot for people to linger and sell drugs.

And without a fence, it made it easy for people to maneuver between lots. 

Mercedes Pickett: Where I'm like, hey, there's kids [00:12:00] living here. There's an elder living here. Like imagine people all right here getting drugs passed out. 

Reema Saleh, Producer: Mercedes and Antonio built a fence. But they still had problems. That property next door has changed ownership a lot.

Now, the city owns it, and Mercedes wants to buy it from them. 

Mercedes Pickett: I started the process, I reached out to the Cook County Land Bank and I'm starting the application now. 

Reema Saleh, Producer: She has big dreams of fleshing out the property. Kind of like her mom did. 

Mercedes Pickett: So, I really see my mom over the past 30 years build her home. At first, she had tenants, and then when we got older, we took that space and then when we got even older, we started building out parts of the basement, the back porch, the backyard to make it more homey.

Reema Saleh, Producer: But she's not knocking down walls. Mercedes still plans on renting out the second unit, providing housing for her neighbors. [00:13:00] She wants to add outdoor seating, maybe even a back porch. 

Mercedes Pickett: How can we, you know, make it livable for us, but then also have tenants that come in like, oh my god, I can't wait to move here.

Reema Saleh, Producer: So, I have a confession to make to you. I didn't realize it until recently, but I've lived in two, three, and four flats for the past six years I've rented in Chicago. And it's not because I'm obsessed with two flats or love renting from my local landlords. It's because when I scoured the apartment listings, they were my least expensive option.

And I'm not special. Two flats are a lot of people's cheapest rental option in Chicago. Jeff Smith, who leads the Institute for Housing Studies at DePaul University, says There's a good reason for that. 

Jeff Smith, Institute for Housing Studies, DePaul University: Because this type of housing is very common in many neighborhoods of the city, because it's older, because it's often owned by small scale [00:14:00] landlords who may be less profit motivated.

Rental units in two-to-four-unit buildings often make up a significant portion of our neighborhood's low cost rental stock. 

Reema Saleh, Producer: Smith's team has spent a lot of time looking at 2 4 flats as a form of naturally occurring affordable housing, when at risk as developers across the city are turning these old buildings into single family homes.

Jeff Smith, Institute for Housing Studies, DePaul University: The way that we're producing housing these days, if you lose a two to four unit building and you lose those relatively affordable units, there's not really a mechanism to replace them as relatively affordable. 

Reema Saleh, Producer: One Chicago neighborhood that's been fighting this battle is Pilsen, a working class and historically Mexican neighborhood on the lower west side.

It's scattered with these kinds of small apartments. Even today, many extended families live together, with grandparents or cousins on one floor, the kids and spouses on another. The past 20 years have seen low-income residents displaced by wealthier, white people [00:15:00] moving in. But local organizations have been seeing some success in preserving affordable housing, and the 2 4 flats that carry them.

It's something Evelyn Figueroa is intimately familiar with. 

Evelyn Figueroa: Two flats represented people being able to stabilize their finances. My grandfather was upwardly mobile because of real estate in Chicago. And in many neighborhoods, these houses are still passed down through the generations. 

Reema Saleh, Producer: Evelyn is a doctor, professor, and director of the Pilsen Food Pantry.

Evelyn Figueroa: My grandparents came from Puerto Rico in the 50s when redlining became much, much more explicit in Chicago. They were pushed into Logan Square, and so my family's had a home there for about 60 years. Even though my grandmother couldn't read, and my grandfather couldn't write at all, they were able to acquire property in Chicago through a lot of hustle.

Reema Saleh, Producer: Evelyn lives in a two flat in Pilsen, one [00:16:00] that she's rehabbing for her family to live in now. It used to be an old Schlitz beer house, one of about 57 left in the city.

Evelyn Figueroa: You can see all the really complex molding that's going back up. It's like multiple pieces. So yeah, they've done a beautiful job. 

Reema Saleh, Producer: The bottom floor still has the bones of a tavern.

The same bar that was there nearly a century ago is sitting in their living room.

Evelyn Figueroa: This is oak. This is pine. 

Reema Saleh, Producer: And it's a work in progress. 

Evelyn Figueroa: I mean, I've done a lot of renovations, and I've done a lot of things wrong. So, I have to just be patient. But it is weird to live in this. But this is my life. 

Reema Saleh, Producer: But Evelyn didn't always think this way.

She used to live in a two flat in Logan Square, another traditionally Latino neighborhood facing rising home prices. As her family grew, she and her husband Alex made a decision that they regret now. 

Evelyn Figueroa: I really wanted us all to fit in the same house. [00:17:00] And I used to dream about living on that street. I used to joke.

I met my perfect person and I wanted to get my perfect house. So, they decided to turn a two flat into a single-family home. And by the time we converted that house and we're going to move in, we were a year into the food pantry, and I looked at Alex and I was like, what have I done? I've become the man.

Like, how did I do that? Very quickly I just realized it was too much house for us and it wasn't the kind of life that we wanted to have. 

Reema Saleh, Producer: Less available housing meant more expensive rents and fewer Latino families who could afford to live there. Logan Square became a haven for young white professionals who could afford it.

For years, Evelyn had seen her neighborhood change. It made her feel like a stranger right where she grew up. Part of the problem was all these two flats disappearing, along with all the affordable housing they used to have. And then, Evelyn realized [00:18:00] she was contributing to that. 

Evelyn Figueroa: But it still feels like very bad to me that I, that I did that.

Reema Saleh, Producer: Evelyn and Alex eventually moved to Pilsen, where many of their patients live. By then, their views of home ownership had changed. 

Evelyn Figueroa: We vowed that we were going to take whatever proceeds we used from that house, at least, and try to do something good where we lived. And so, we're trying to take the proceeds from that house and actually invest it into a multi-unit walking distance from this house, and that we will never convert that to a single family home.

It's just, we didn't convert this house. 

Reema Saleh, Producer: It's also at this moment, as I stare through the open rafters and ongoing construction, that it hits me. Hey, maybe this isn't for everyone. 

Evelyn Figueroa: I mean, look it, we make a mistake, they have to re sand it and fix it, and it's like, how do you, how do you afford that? For us, we'll just keep people doing stuff for us forever, but we can, we can afford that.

Reema Saleh, Producer: The Chi Flats program is not just pitching [00:19:00] someone on owning their own home. It pitches someone to run a business. It's a business that a lot of working-class communities really need, but that doesn't free the owner from the risk. It can be scary if the building has problems, you're unprepared for, or you're stuck depending on rental income that never comes through.

Evelyn says it's kind of all the challenges of homeownership and then some.

Small scale landlords and their tenants live in this sort of symbiotic relationship. Renters need it, so they have a source of affordable housing. And two to four flat owners need renters, so they can keep on providing it. Keeping that relationship going helps everyone. And there's a lot of research connecting homeownership in a community to better life outcomes.

Communities with higher levels of homeownership see lower rates of violence. But it's not homeownership alone that creates that. [00:20:00] It's when residents get involved in their communities. when they form block clubs and become regulars at church basement meetings. That's all easier when you own your own home.

Evelyn Figueroa: Neighborhoods that have less home ownership are not going to have that connection because they're displaceable and they're more vulnerable. If you're in survival mode, how are you going to care if garbage is being thrown around? How are you going to care if it's not green in front of your house? 

Women's Self Defense Workshop: It sips you up in your eye every day.

Reema Saleh, Producer: Back in Garfield Park. Mercedes is making the same point. Quality of life stems from community. 

Women's Self Defense Workshop: Women don't feel safe in our community...

Reema Saleh, Producer: We're at a women's self-defense workshop hosted by a Westside non-profit, helping students overcome obstacles to education. Events and resource fairs like these are usually the best place to find her. But she's not here to [00:21:00] fight.

Mercedes is passing around a QR code with a quick survey. 

Mercedes Pickett: What I'm doing here is I'm helping with the data collection and also just helping with the needs assessment that will be built into a community plan. 

Reema Saleh, Producer: She's gathering data on what young people want in their neighborhoods and what they need to thrive.

Eventually, they want to put it all into a quality-of-life plan for West Garfield Park, so community organizations can meet those needs. 

Mercedes Pickett: Garfield Park doesn't have a quality-of-life plan. So, what does it look like when we're improving the residents, um, development, the home infrastructure, you also have to make sure that you're building with their youth as well.

Reema Saleh, Producer: Since moving back home, Mercedes founded the non-profit Earth Remedies, along with some of her family. 

Mercedes Pickett: When you take community development and you are in the field for two plus decades, you get tired of the traumas the community youth [00:22:00] service experience. You get tired of the financial burdens that you're witnessing on a day to day.

People are calling, asking for help. 

Reema Saleh, Producer: They run a tutoring program for young scholars. They connect donations for families over the holidays. And during the pandemic, they fundraised for small businesses struggling to stay afloat. And like Mercedes is doing here, she's helping nonprofits collect the data on how they're helping the community.

Mercedes Pickett: We're able to recycle the value of the dollar rather than it leaving our community and leveraging data. It sounds very unattractive, but when you see the smiles, it's, it's breathtaking. We love nature. 

Reema Saleh, Producer: It's the morning before Mother's Day, and Mercedes and her mom, Gladys, are up bright and early, picking out seedlings at the Garfield Park Conservatory.

Mercedes Pickett: We used to do this growing up, of every Mother's Day, going to the yard, turning the soil, getting the rocks where [00:23:00] she wants them, getting the pathway the way she likes. 

Reema Saleh, Producer: It's a family tradition for them. Mercedes planting fruits and veggies and Gladys planting flowers. Sometimes Gladys gives her advice on gardening, but also on home ownership.

Mama Gladys: Uh, one thing I always tell my kids, stay in your neighborhood. Work with your neighborhood. Don't move out of your neighborhood because it's beautiful. Our area is now coming, the new downtown, and I was happy that she was able to purchase her first house on the west side. So 

Reema Saleh, Producer: When Gladys got that grant from NHS in 2011, It helped keep her family together, but it also helped keep them rooted to their community.

Sometimes people told them they should move out of the West Side or send their kids to high schools outside their neighborhood. But every time, they said no. 

Mama Gladys: No. We're building, we're coming back. This is the plant; this is the seed. And now that I've planted that [00:24:00] seed in my kids, they all are investing on the West Side. So I can't ask anything else. 

Reema Saleh, Producer: She wants Mercedes to keep investing in their neighborhood by buying more property, making more affordable housing, and starting her own family right where she grew up. It's what she wants for everyone. 

Mama Gladys: But when they see me and they comment, “Oh, Mama Gladys, you've been here for 30 some years. I want a home.” And that's what I want people to say to my children, to say to Mercedes. “You've been here for years. You didn't leave the community. I want to invest too.” That's what it's about, investing in our neighborhood. 

Reema Saleh, Producer: Sometimes Mercedes and her mom wonder if what's happening in gentrifying neighborhoods could happen to West Garfield Park.

That speculators will discover new parts of the west side, price out the residents, and displace them from their homes. It's already happening on the east side of the park the neighborhood is named for. Two to four flats are disappearing and leaving single [00:25:00] family homes in their place. And on the west side of the park, abandoned flats are turning into vacant land.

But Mercedes, and so many small landlords around the city, they're not budging. They're building a better life for themselves and the communities around them.

Narrator: Thank you for joining Change Agents, the podcast series looking at grassroots actions and solutions through stories told from the inside. Produced by Juneteenth Productions for Reparations Media. The music is composed by Sara Abdelaal. Funding support provided by the Chicago Community Trust, the Field Foundation, and the Wayfair Foundation.

Additional support provided by the John D. and Catherine T. MacArthur Foundation and DePaul [00:26:00] University's College of Communication. Subscribe to this podcast on Apple Podcasts, Stitcher, Spotify, and wherever you find your podcasts. Follow Change Agents on Facebook, Instagram, LinkedIn, and on our website, changeagentsthepodcast.com.