Next month the Chicago Housing Authority will announce which applicants will get the nod to do the next piece of its ten-year-old Plan For Transformation: redeveloping Lathrop Homes with a mix of market-rate, affordable, and public housing.

But a coalition of tenant groups, preservationists, and neighborhood activists maintains that Lathrop, at Damen Avenue and Diversey Parkway, should get little or no market-rate housing. Instead, the coalition says, Lathrop can be better knitted into its surrounding community by putting amenities on its grassy, 32-acre riverfront campus that would attract affluent neighbors and make the site a community anchor.

“We’re surrounded by new market-rate housing [developments], and there are still units for sale in most of them,” says Scott Shaffer, a co-chair of Lathrop Homes Alumni Chicago. “Now is not a good time to put market-rate in, because there’s nobody buying it.” But there is a need for affordable rental housing: the Chicago Rehab Network found that from 2000 to 2007, the seven surrounding neighborhoods lost 34,000 rental units, mostly to condo conversion, says Kevin Jackson, CRN’s executive director.

While the CHA’s plan calls for 800 to 1,200 units of housing on the site, with a third of them devoted to public housing, the coalition wants “a commitment to preserve Lathrop as 100 percent affordable and public housing,” says John McDermott, an executive of the Logan Square Neighborhood Association; it also wants the development “kept on the human scale that Lathrop Homes was built on,” McDermott adds.

One of Chicago’s oldest public housing projects, Lathrop “is where public housing was done right,” says Jim Peters, the head of Landmarks Illinois, an ally in the coalition’s efforts. Click through the slide show below to see how Lathrop’s history and setting might be maximized in innovative ways.