Lemons to Lemonade Built on the site of a project gone bust, the bungalows of SchoolStreet Homes complement a row of existing brownstones.

Photos: Tim Klein

Lemons to Lemonade Built on the site of a project gone bust, the bungalows of SchoolStreet Homes complement a row of existing brownstones.

Karen and Rich Angelbeck loved their neighborhood in Chicago’s Southport Corridor next to Wrigley Field. In fact, they had no intention of leaving it when, on a lark, they road-tripped with another couple last January to visit a neighborhood under construction some 40 miles outside the city. That’s when things changed. A week later, they found themselves returning, to a bank around the corner from the jobsite, and withdrawing money for a deposit on a three-bedroom bungalow. Their friends bought the lot next door.

The place that so captivated the two couples—both have young kids—is SchoolStreet Homes, a small infill project in Libertyville, Ill. Located just off the town’s main street of shops and cafes and within a stone’s throw of the Metra station, the four-acre parcel was originally slated to hold 31 luxury brownstones priced from $850,000 to $1 million. Then along came the housing bust. The developer of the brownstones had built and sold only five units when the property went into foreclosure.

Now, as the parcel begins a new chapter, those brownstones are bookending a more diversified venture, one that illustrates the new opportunities facing home builders in a changed landscape. Rather than building more townhomes, developer John McLinden is introducing 26 detached “front porch revival” homes on 29-foot-wide lots, priced between $525,000 and $725,000. He and his construction director, Russell Head, are also converting a 20,000-square-foot school on the property (built in 1938) into 15 urban-style lofts.

“The great architect Daniel Burnham laid out the city of Chicago on 25-foot-wide lots,” McLinden says, explaining the rationale behind the lot dimensions for the single-family homes. “We could have followed his lead, but we went with 29-foot lots to mirror the width of the existing brownstones. These may seem narrow by suburban standards, but they are wide by city standards.”

Live Work Single mom Sue Kartheiser, the first buyer at SchoolStreet Homes, runs a small business from her home.

Photos: Tim Klein

Live Work Single mom Sue Kartheiser, the first buyer at SchoolStreet Homes, runs a small business from her home.

Those dimensions feel plenty roomy to the Angelbecks, who are moving from a condo type that is commonly referred to by local Realtors as an “upside down duplex.”

“This [new location] gives us everything the city has in terms of bars, restaurants, entertainment, and transportation, but with the added benefit of good schools and a slightly less hectic pace—plus an attic, a basement with a home office, and a garage,” says Karen Angelbeck, an attorney whose commute to nearby Deerfield will be significantly shortened. “Right now we live in a popular place for young families in the city where you can walk everywhere. We always feared leaving that. But this new opportunity is exactly what we have, except better.”

Out of the Loop

Libertyville, with its apple pie name and small town vibe, may seem an unlikely spot for transplanted city dwellers. But in fact it’s just the sort of place that’s beginning to attract Gen Y home buyers who, having professed a penchant for urban living in countless consumer preference surveys, are now having kids and finding themselves torn by the need for better public schools.

Chicago has a handful of good schools inside the city limits, Angelbeck says, but the competition to get in is cutthroat. “The joke around here is that kids have a better chance of getting into Ivy League colleges than they do of getting into the five or six best public high schools in Chicago.”

At the same time, schools aren’t the only draw luring die-hard urbanites to the suburbs. As one-time bedroom communities begin to sprout higher-density housing options (rental apartments, condos, lofts, and the like) around transit stops and mixed-use town squares, they’re beginning to feel more like urban villages themselves—places that have appeal for singles, empty-nesters, and DINKs just as much as families. This increasingly multi-nodal landscape, notes Joel Kotkin, a Distinguished Presidential Fellow in Urban Futures at Chapman University, marks the beginnings of what may be best described as “smart sprawl.”

The momentum, it seems, is already there. “[S]uburban growth continues to dominate in most regions of the country, constituting between 80 percent and 100 percent of all growth in all but three of the 16 metropolitan areas reporting,” Kotkin wrote on his website shortly after new Census numbers were released last February. “Central cities, which accounted for 11 percent of metropolitan growth in the 1990s, constituted barely 4 percent of the growth in the last decade.”

That shift may be attributable, in part, to job migration. The central business districts of Boston, San Francisco, and Seattle now account for only 11 percent to 12 percent of employment in their larger geographic regions, according to analysis by Wendell Cox of Demographia. In Miami and Los Angeles, that share shrinks to less than 4 percent.

At the same time, enterprising builders and developers have begun exploring suburban frontiers that are ripe for reinvention, marking dead malls, parking lots, empty big box stores, office parks, and similar patches of “underperforming asphalt” as prime targets. Arthur “Chris” Nelson, director of the Metropolitan Research Center at the University of Utah, has predicted that as many as 2.8 million acres of grayfields will be available for redevelopment by 2015.

Learn more about markets featured in this article: Chicago, IL, Minneapolis-St. Paul, MN, Los Angeles, CA, Denver, CO.