Mayor Karen Freeman-Wilson of Gary, Indiana: Selling one dollar houses to revitalize a former steel town

The “Dollar Homes Project" is just one innovative approach in Freeman-Wilson’s ambitious plan to restore Gary.

This historic neighborhood in Gary, Indiana, is a reminder of its heyday and a beacon for its restoration. Image credit: National Register of Historic Places

At its heyday as the anchor town for U.S. Steel, the population of Gary, Indiana, peaked at 178,320 in 1960. But by 2012, Gary’s population had dropped to 79,000, while the number of workers at U.S. Steel dropped from 25,000 at its height to about 5,000 today. The exodus brought with it high rates of property abandonment – roughly 25 percent of Gary’s housing is abandoned – and a 2012 poverty rate of 37 percent.

Mayor Karen Freeman-Wilson, a Gary native, came to office in November 2011 determined to turn the city around. A Harvard-educated lawyer and former non-profit executive, Freeman-Wilson is Gary’s first female mayor and the first African-American mayor in Indiana. She is also a member of the NewDEAL, a network of “pro-growth progressive” state and local elected officials.

Freeman-Wilson has gained national attention for her innovative approach to economic development, including the 2013 launch of a program to sell city-owned abandoned homes for $1 to buyers willing to renovate and live in these properties. Modeled after HUD’s Dollar Homes Initiative, Gary’s Dollar Home Project attracted more than 400 applicants for the 13 homes it put up for sale last July.

We asked Freeman-Wilson about the progress of this effort and her other plans for Gary. This interview has been edited for length.

Mayor Karen Freeman-Wilson of Gary, Indiana.

Mayor Karen Freeman-Wilson of Gary, Indiana.

R3.0: The first group of homeowners taking part in the Dollar Home Project moved in last fall – how are they doing?

Freeman-Wilson: They’re very excited about being homeowners, and it’s created interest in people moving into or remaining in the community. One of the things that we have to decide in the next iteration is whether to open it up to people outside the community. There’s certainly an argument for that when the city has lost so many residents, but I’m still trying to make the final determination.

R3.0: You benefited from a similar program yourself when it was administered by HUD.

Freeman-Wilson:  I came back home in 1985, and it was in 1986 or 1987 that I applied for and was awarded a home in the [HUD] “dollar house lottery.” I rehabilitated my house, and my friends used to tease me that I went from shopping at Marshall Fields to Handy Andy, which was the repair store.

I had considered moving out of the city of Gary – I was working as the Lake County Deputy Prosecutor. But because of the opportunity to become a homeowner at a young age, it led me to engage more heavily in the community. I was able to get the house and fix it up, and I still own it today.

R3.0: Beyond economic redevelopment, is homeownership something you have in mind as a larger goal for this program?

Freeman-Wilson: It is absolutely the goal to increase the number of owners versus renters because they have a greater vested interest in the community. It’s not to say that those who rent don’t have a vested interest in the community, but something about having a home of your own motivates you to take greater care of it.

R3.0: How would you describe your strategy for revitalizing Gary, and how is it different from that of your predecessors?

Freeman-Wilson: One [aspect] that’s different is that we’re building on our strengths, [such as] transportation.

We have three [major] Class I rail lines; we have four interstate highways that go through Gary; we have the nation’s largest fresh bodies of water that lie adjacent to the city of Gary; we have an underdeveloped airport; and we are 30 minutes from the third-largest city in the United States [Chicago].

We looked to build our rail presence shortly after I came on and also decided to find investors for the airport, which has seen fits and starts since the late 1950s. We created a public-private partnership [to develop the airport] – one of the only public-private partnerships for an airport in 2013 – that resulted in a commitment of $100 million of investment both on and off airport property.

The other thing that is a little different is that we focus on “singles,” to use a baseball analogy. My predecessors talked about refurbishing a hotel that was vacant for 20 years and putting $20 million into that. That’s good, but if you put all of your eggs in one basket and it doesn’t pan out, you end up with no other dollars to invest somewhere else. So I decided to look at singles. We partnered with TA Petro to create jobs for the community. We looked at the airport as a public-private partnership.

We’re not really focused on the really big hit that will get the ball out of the park. We know that if we do this incrementally and in a sustainable way, you still get to home plate, and you do it in a way that will sustain the city for generations to come.

R3.0: What other innovations have you put into place that other mayors could replicate?

Freeman-Wilson:  One innovation is that we have a dedicated partnership with the Harris School of Public Policy at the University of Chicago. Mayors all over have universities to inform their decisions and to support their effort, but more often than not, it’s on a one-off basis.  Maybe the university will host one event or develop one initiative.

But we’ve developed a sustainable partnership where students serve as interns through the “Gary Practicum.” We lay out issues that we’re concerned about, and they come up with solutions.

As an example, one of the first issues we presented to the students was that of abandoned homes. They decided that before we could really do anything about it, we really had to get our arms around not only the number of homes, but the degree of abandonment – the condition of the home.

They developed what’s called the “local data program,” where we’ve been surveying abandoned properties throughout the city. We’ve been able to determine which blocks have abandoned homes and the condition of those homes. As a result, we were able to put together an application for some of the funding for the [Treasury Department’s] “Hardest Hit Fund.”

Another innovation is our use of data to help inform our decisions – whether it’s where to demolish property, whether it’s the work we do to make information available to the public, or how to shrink the city because that’s something we’ll have to do in order to control our budget and acknowledge the fact that we’ve lost half our population.

R3.0: If everything you’re working on comes to pass, what’s Gary going to look like in five years?

Freeman-Wilson:  In five years, you will see revitalization in the area around the universities here. We have one of the largest and busiest campuses of Indiana University – IUN – plus Ivy Tech Community College. We are now developing that area and calling it “University Park.” In five years, you’ll also see our casino, which is now in an industrial corridor, and there will be non-gaming development around it.

R3.0: Gary is actually a young town – it was founded in 1906. You’ve lived through much of the history of Gary personally.

Freeman-Wilson: Absolutely. I saw Gary at its height, and I’ve seen Gary at its best, and that is what inspires our team to work that much harder to bring Gary back to what it was. The reality is that it didn’t change overnight, and many of our younger staffers don’t really know the Gary that I knew – having been able to go to movie theaters downtown, or having been able to shop downtown. And what I remind them is that Gary is having the same experience as many urban cores – it’s just that Gary has seen it in a much more pronounced way.

R3.0: Is your ultimate goal to bring Gary back to what it was in its glory years?

Freeman-Wilson: I don’t know that we’ll ever return from a standpoint of population, but it is our goal to return Gary to the center of commerce for Northwest Indiana. I think that it’s certainly doable, given the fact that U.S. Steel still has its anchor operation here, but it’s also doable because we are learning from our mistakes in the past – that you cannot depend on only one industry. So we’re diversifying. And that will play a vital role in the restoration of Gary.