For John Pritscher, fighting social injustice was not the passing fancy of a young idealist. It was a life-long calling. But while he started his career demonstrating in the streets of Chicago, he ended it by remaking the very neighborhoods where he once marched.

In the 1960s, as a Catholic priest, he marched dozens of times for civil rights, once sharing a Chicago jail cell with James Farmer, one of the founders of the Congress of Racial Equality, a group that played a pivotal role in the U.S. civil rights struggle.

Working in the inner city, Pritscher soon realized that having a decent home in a safe neighborhood was crucial to the ability of inner-city residents to improve their lives, so he turned his attention to rehabilitation of this city’s many older rental buildings.

As the head of the Community Investment Corp. (CIC), a consortium of banks that makes loans for apartments in a six-county area, Pritscher spent most of his career showing that small-scale, market-oriented rehab could bring neglected, crimeridden neighborhoods back to life.

He combines a passion for neighborhood revitalization and affordable housing with solid real estate know-how.

Mixing pragmatism with optimism, Pritscher built an organization that turned his vision into reality, enabling mom-andpop investors to turn beat-up or abandoned old buildings into decent apartments with affordable rents.

He demonstrated that housing needs could be met cost-effectively by preserving existing buildings through the work of hands-on entrepreneurs who keep costs low, partly by avoiding the delay, added costs, and restrictions of federal subsidies.

Pritscher is proud that CIC was able to show Chicago’s banking community that multifamily rehab lending is good business, and that banks “followed us in neighborhood after neighborhood in making solid and profitable loans.”

In 23 years, CIC borrowers have received $915 million in financing. More than $800 million in CIC loans were for the rehab of 1,500 buildings with 40,000 units and a total project cost of $1.4 billion. CIC losses have been 0.58 percent of closed loans, with 0.23 percent passed on to investors. This helps to keep interest rates low, at the cutting edge of the market, Pritscher said.

CIC does not finance cosmetic improvements that have the main purpose of helping an owner justify higher rents. It lends only on buildings that need repairs and rehab.

Who rehab serves

In 2006, 92 percent of CIC-financed buildings had after-rehab rents affordable to persons earning below 50 percent of the area median income (AMI), and 100 percent were affordable to persons earning 60 percent of the AMI. This is the market-rate rent in many South and West Side neighborhoods, where many CIC borrowers and contractors are racial minorities, Pritscher said.

The state or city sometimes kicks in a subsidy of about $5,000 per unit, and the Cook County Assessor’s Class 9 tax incentive program is available to reduce property taxes while permitting higher appraisals and making larger loans available. There are no delays or added costs with either; the rehabbers just process their real estate loans to closing, Pritscher said.

The risks were very real on many CIC deals, especially considering that CIC would take chances on firsttime building owners and make high loanto- value loans. Under Pritscher’s leadership, however, CIC showed that the risk could be managed by choosing the right owners and borrowers, and by providing intensive training.

Then there was the personal touch that was unique to John Pritscher. As one developer client said, he treated each borrower like a member of an extended family. “He’s passionate about what he does. He’s passionate about his fellow man,” the client said. “It comes through that he cares.”

Pritscher taught his staff to approach the lending process with the same optimism and faith in the small owners that he had. “He is a unique manager. For him, the glass is not half full; it’s always three-quarters full,” said Patrick Nash, who preceded Pritscher as president of CIC and is now managing director of JPMorgan Capital Corp.

Even in the summer of 2007, as he fought an uphill battle against cancer, Pritscher remained hopeful and determined to keep pushing himself. Pritscher announced his retirement, but he planned to give the next president of CIC as much help as he or she wanted for as long as possible.

Turning troubled projects around

He will leave his successor with an organization that has grown from a bold experiment in risky inner-city lending to an “all-around urban problem solver,” according to Jack Markowski, former commissioner of housing for the city of Chicago and now an executive at Park Bank Initiatives. CIC has expanded its horizons to help deal with troubled projects funded under traditional subsidy programs. Because of its track record, first mortgage lenders as well as city and state housing agencies often look to CIC to transfer distressed buildings promptly to capable new owners.

In what’s known as the Lawndale Restoration. Chicago’s largest federally subsidized project is being transferred to small owners through CIC, and most of the housing is being preserved without subsidies. In January 2006, the Department of Housing and Urban Development (HUD) transferred its largest failed deal in Chicago—104 scattered-site buildings with 1,104 units and 1,800 code violations—through one deed to the city, and then with one deed to a subsidiary of CIC. On the same day, CIC transferred ownership to 23 entrepreneurial owner/operators for $1 per building.

Most of the buildings, with 18 developers, required no added subsidy.

CIC also took the lead in finding new owners for troubled tax credit deals syndicated by the Chicago Equity Fund.

Through its Troubled Buildings Initiative, CIC has helped the city fix up buildings with serious code violations. Since July 2003, 331 buildings with 6,075 units have been brought into the program, with rehab now complete on 1,917 units in 103 buildings.

CIC’s accomplishments are more impressive when you consider that when it was founded in 1974, “redlining was the rage,” as Nash put it, referring to the practice of banks refusing to make loans to entire inner-city neighborhoods.

The Community Reinvestment Act had been enacted in 1977, but it was not enforced, and many of Chicago’s nowhealthy neighborhoods were plagued by crime and building abandonment.

Pritscher joined CIC in 1984 to lead its expansion from single-family lending into multifamily finance, and quickly rose to be president. He was well prepared for his new job. From 1971 to 1984, he worked for HUD in Chicago and Minneapolis, primarily focusing on multifamily housing.

Before that, he served as a Catholic priest for four years at a large church in Oak Park. After leaving the priesthood in 1970, he studied social science with a specialty in urban studies. He wrote his master’s thesis on “the economic and political and social causes of the failure of housing rehab in Chicago.”

Exporting the model

Pritscher is confident the CIC model will work in other cities and has helped similar groups try to duplicate it, with local government support. “If reasonably priced and accessible private financing is available, hands-on rehabbers/owners will figure out how to use the loans and to buy distressed real estate at a low enough price to permit rehab,” he said.

However, he is concerned that “well-intentioned federal requirements” make it difficult to use federal programs like HOME for small projects, due to requirements that bring delay and added cost to hands-on rehabbers, whose success is dependent on moving quickly to acquire and rehab properties.

The 67-year-old Pritscher, a father of three and also a grandfather, is a Chicago native and major Cubs fan.

As he celebrated his retirement at a party in August with the 35 staff members of CIC, Pritscher remained true to his longtime practice of staying positive and inspiring his colleagues with a song.

He led the audience in singing Take Me Out to the Ball Game. He ended the evening with a song that pretty much sums up how he felt about his work in Chicago’s neighborhoods, and how his clients and their tenants feel about what he did for them: What a Wonderful World, which was made famous by Louis Armstrong in 1968.