The house on Howe Street near Armitage is, you’d have to say, one very elegant residence.

The frame structure, situated snugly behind a wrought-iron fence, has a second-story balcony and forest-green paint and trim. The living room and dining room on the first floor are linked by a shared fireplace, and there’s a solarium off the kitchen. Visit the bathroom to the second-floor master bedroom, and you’ll find a Jacuzzi, double sinks, and marble tile. A cathedral ceiling tops one of the three bedrooms on the third floor.

If the house has a signature, though, it is the windows. Light floods the 3,800 square feet of space.

The house on Howe has been sold, and the profile of the new owners squares with the realities of Lincoln Park real estate. The proprietors are a married couple who toil at high levels in the business world (he’s in finance), and they have a child on the way.

The developer, however, does not fit the stereotypes. Architect Carol Phelan bought the house on Howe Street, overhauled it, and sold it, and she intends to roll the profit into a new building. This is all normal enough, but the next building breaks the mold. Phelan intends it to be occupied jointly by retarded people, by senior citizens, and by a single parent and his or her children. Each floor will be crafted to the needs of its particular tenants, who together, Phelan hopes, will form a mutually supportive community.

No, Carol Phelan, an enthusiastic woman of 49, isn’t your usual architect-developer on the make.

Years ago, when she was raising three children on the North Shore, Phelan would buy and rehabilitate houses. One happened to be the Phelan family manse, but three others were turned around just for the fun of it. “It wasn’t for the money,” Phelan recalled. “I suppose I made three to four thousand dollars on those places. But it just gave me pleasure taking a little old wrecky house and fixing it up. I was making a silk purse out of a sow’s ear, I suppose, and that proved quite a challenge.”

Not enough of one, apparently, because a decade ago Phelan enrolled at the University of Illinois at Chicago to study architecture. She emerged with a graduate degree in 1981 and went into business, first with her former dean, Richard Whitaker, now with another partner. Her present firm, Riverside Architects, specializes in commercial and residential work.

“When I started out,” Phelan recalled, “it was fun to do architecture for the mere satisfaction and the profit. But after a while I thought, there must be more.”

Two years ago Phelan looked into the possibility of designing some federally subsidized units that would be executed through the U.S. Department of Housing and Urban Development. Under its Section 202 program, HUD makes loans on housing projects for the disabled and senior citizens. However, in this Republican era, the 202 program has grown highly competitive. This fiscal year, HUD is entertaining applications to put up or recondition 6,000 units of housing; it can approve a mere 1,800 of those units.

The aid comes with restrictions. For one thing, the living space cannot be too large. HUD’s cap is 540 square feet for a one-bedroom unit and 415 square feet for an efficiency, or somewhat more if the efficiency is in a group home for the handicapped. “We also don’t allow what we consider luxury amenities,” said Erica Dobreff, 202 program coordinator in HUD’s Chicago regional office.

“HUD limits you on the size of your windows and on how nice the bathroom tile can be,” said Phelan, who didn’t like HUD’s rules about floor space either. That’s why she’s set out on her own to construct what she wants. Funds from the Howe Street conversion will flow through a not-for-profit foundation she’s setting up–Hope Through Housing.

The building on Howe dates from 1886, when one Charles G. Muehlke erected it. By last year, when Phelan went shopping for property, the one-family home had been cut into three apartments. Phelan acquired it from its live-in owner for about $150,000 last July (a fair price on a hot block where such a building would now command $220,000) and stripped the building down to its bones. All the joists came out, the roof was raised, and a third floor was added. Today’s north wall is the only one that’s original.

“We put in new studs, walls, floors, and a roof,” said Phelan. “The works.” Phelan not only designed the home but acted as general contractor. The house went on the market around Thanksgiving, and it sold in March for $515,000, a couple of weeks after the drywall went on. The new owners could pick out the carpeting and tile of their choice.

Phelan made $30,000 on the house, half what she’d originally forecast. To do her next building, she’s combining it with a loan from the First National Bank and some additional money she’ll put up with her husband Richard, a former president of the Chicago Bar Association who in January successfully defended Jewel Food Stores against a class-action suit brought by victims of the 1985 salmonella outbreak.

The new acquisition will likely be a three-flat in Evanston. Realestate prices are lower there, and a loose advisory group Phelan is working with on the project is composed of Evanstonians. The advisers include Marina Eovaldi, former director of the Chiaravalle Montessori School, which pioneered in the educational mainstreaming of Down’s syndrome kids, as well as two mothers of retarded teenagers. Another advantage is that Evanston recently introduced a $1.5 million housing fund, made possible by a refinancing of Evanston’s mortgage revenue bonds, and Phelan hopes to borrow from it.

Each apartment in the three-flat will be structured differently, according to Phelan. The single parent–for illustration’s sake, a mother–will have her own bedroom and bath, “so she can have a little privacy at the end of the day,” Phelan explained. “Typically, space for the retarded means a dining room, a kitchen, and three little bedrooms,” Phelan said. “But I see having a community room, with big bedrooms off it, so these people can get away from each other. The elderly will get a porch to share, and then small little apartments bunched on the same floor.”

Phelan envisions a certain symbiosis emerging among the three-flat’s occupants. “Every one of the people in the building will probably need some help,” she reflected, “and so we’re going to choose the people carefully, in order to get a community going.” For instance, the elderly tenants might watch the latchkey child of the single mom after school. Or the latchkey child might make runs to the store. The retarded–adults with Down’s syndrome–might do chores. In addition, Phelan intends to have a social worker or two visit the building on a regular basis.

The tenants will have equity in their units. The single mom, say, would put down $3,000 on a $60,000 flat–instead of a more standard $12,000–and would then be responsible for monthly mortgage payments, though perhaps at a less-than-market rate. If she moved out, the mom would turn her apartment back to Phelan’s foundation, yet she would be given to keep for herself the amount of appreciation on the unit.

Phelan’s advisory panel has been making contact with a range of social service agencies, among them the Evanston Commission on Aging, the North Shore Association for the Retarded, and Family Focus, a support group for young families. These overtures–with an eye to finding tenants eventually and providing them with services–are being handled by the two mothers of retarded boys, Mary Miller and Elaine Greenbaum. They have some self-interest in Phelan succeeding.

“When our kids were little,” said Greenbaum, “we didn’t have to start up a school for them, because Marina [Eovaldi] had a place for them at her Montessori school. But now our boys are 14, and down the road we don’t see anything to provide them employment or housing. We’d like to start now to set up the institutions for them when they reach 20 or 25. And, believe me, there’s nothing out there now like Carol’s project.”

Not with government backing there isn’t. If Phelan faced an uphill battle to win HUD funding when she was first thinking about Hope Through Housing, she’d have no chance today. “Each of our programs serves a different special-interest group,” said Erica Dobreff of HUD. “It’s not feasible for us to take care of everyone in one building. We can’t mix our funding. Our regulations don’t permit it.” HUD’s 202 program excludes single parents and their children entirely.

Currently, Phelan is still looking for that elusive Evanston three-flat (a deal in central Evanston just fell through). Meanwhile, her Chicago realtor is keeping her eyes peeled for another building to convert for profit, perhaps this time in Lakeview. “Next time we want to be more economical in our contracting,” Phelan said, “but we still feel we can make a profit at this. I’m looking for a profit like everyone, only I’m applying it differently.”

There are aspects to Hope Through Housing that trouble Phelan. Like some north-side developers, she regrets the uprooting that gentrification brings, although the building on Howe did not contain an old couple forced out by economics. “But I do feel badly that the original families are leaving the neighborhood,” she said. “Still, those families are making a judgment, too. They’re saying, ‘OK, this area’s being gentrified, and I can get more for my building than I ever thought I could.'”

Phelan sees Hope Through Housing as an exercise in self-expression. “It seems to me that I’m using both my interests in life, in architecture and in serving others,” she said. “If HUD takes a lesson from this, it’s that they ought to be more flexible and more creative in how they approach the way people live. See, it’s the way people live, not where they live, that’s important.”

Art accompanying story in printed newspaper (not available in this archive): photo/Kathy Richland.