SCOTT SIMON, HOST:

One of the most closely watched public housing experiments in this country is now more than a decade old. Under the Chicago Housing Authority's plan for transformation, Chicago tore down all of its notorious high-rises, replacing them with mixed-income communities. But even after all these years, it's still a contentious process. NPR's Cheryl Corley reports.

CHERYL CORLEY, BYLINE: The Julia C. Lathrop Homes on Chicago's North Side is on the National Register of Historic Places. The development was built in 1937, and these days it's nearly a ghost town.

MARY THOMAS: So, this is about where everybody lives, where they moved us all together.

CORLEY: Mary Thomas is driving through Lathrop. It's an integrated community of blacks, whites and Latinos. She lives there with her husband and young son and she points out the row houses and solid four-story brick walk-ups where her neighbors live.

THOMAS: And as you can see, too many empty apartments.

CORLEY: It's all boarded up.

THOMAS: Yeah, it's all boarded up.

CORLEY: Big grassy areas and playgrounds are cordoned off by fencing. Lathrop sits right next to the Chicago River. It has more than 900 units. Fewer than 200 are occupied. For a dozen years, the Chicago Housing Authority has torn down decrepit or troubled public housing, replacing it with mixed-income communities under the plan for transformation. In those new neighborhoods, public housing residents live next door to market rate homeowners and renters in subsidized or affordable homes.

(SOUNDBITE OF CHATTER)

CORLEY: Scores of people showed up for a recent open house where developers displayed three design concepts for a new Lathrop.

DOUG FARR: They are chosen to offer really different choices and to illustrate the tradeoffs that happen on this site.

CORLEY: Doug Farr is president of Farr Associates, the lead planner for Lathrop Homes' redevelopment.

FARR: This site has been historically designated, so it's eligible to be to be preserved and retained. On the other hand, we hear a lot about how isolated it is physically. It's not connected to the surrounding neighborhoods.

CORLEY: Neighborhoods that are either upscale or gentrifying. The concepts would place far more housing on the Lathrop site from the 900-plus units there now to as many as 1,600 units with 400 set aside for public housing. One of the scenarios includes a 28-story high-rise tower. Critics say all three designs should be dumped and residents should have more input. Mary Thomas agrees. Back near her home, Thomas said there's little affordable housing in the area and there's a need for much more.

THOMAS: And we've been chanting that for years - no market rate, period. Because this neighborhood is saturated with market rates, and half of it is going into foreclosure. And what are they going to bring some more in here for?

CORLEY: Especially, said Thomas, with thousands of people on the CHA's public housing waiting list. But Chicago Housing Authority Executive Director Charles Woodyard says mixed-income communities are more successful.

CHARLES WOODYARD: All I am asking is that you don't have the type of enclave that almost appears to have an invisible fortress around it, that you have no reason at all to walk through Lathrop and see and interact with people who don't look like you.

CORLEY: Woodyard says he's not talking about race, since Lathrop is integrated but more about class in the gentrifying neighborhood. Those types of comments raised the ire of Robert Davidson. He and his wife have lived at Lathrop since 1991 and he is the president of the advisory council. He says the public housing residents at Lathrop are engaged in their neighborhood and it's only outsiders who think they are isolated.

ROBERT DAVIDSON: And the outsiders don't speak for us because they ain't never going to say anything that keeps them out or pushes them out. Never will they say that. Because why? They see a goldmine. That's what they see because of the gentrification that's going on here.

CORLEY: Although Davidson is part of the working group that meets with the Lathrop developers, he says residents have really had no say-so about the fate of Lathrop Homes. The CHA's Woodyard says 900 units of public housing at Lathrop will be replaced in the area; just not all concentrated on the development site. It will take six months to complete Lathrop's design plans. The transformation for all of CHA's public housing is scheduled to be complete by 2015. Cheryl Corley, NPR News, Chicago.

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