Two Chicago aldermen, Roberto Maldonado (26th) and Carlos Ramirez-Rosa (35th), have been concerned for some time about gentrification in their wards, driven by the success of the Bloomingdale Trail. They’ve come up with a few different ideas for stopping the inevitable and apparently none of them are working. Who would have seen that coming? So their latest trick was to submit an ordinance to the Chicago City Council to basically impose a 14 month long moratorium on new development inside a 1 mile wide strip centered along the trail. There are a number of conflicting descriptions of the 606 Residential Area ordinance in the press but I finally found it online. It sounds like they are talking about blocking all demolition permits, zoning changes, and new construction in that area. However, I had heard elsewhere that they were going to make an exception for the construction of affordable housing.
I’ll keep you in suspense about where I come out on this issue but Mayor Lightfoot thought this was illegal and would not put the ordinance in front of the city council. I haven’t heard exactly what aspect of this the mayor thought was illegal but I’m willing to guess that telling people who they can sell their property to might raise some issues. Anyway, Maldonado and Ramirez-Rosa are looking to submit a revised ordinance that addresses the mayor’s concerns on January 14.
Aside from the potential legal issues this idea is flawed on so many levels I don’t know where to start. But I’d like to start with the fact that, as I’ve pointed out before: Fighting Gentrification In Chicago Is Like Fighting Gravity. What’s really funny is that Maldonado is going to commission a study to determine what forces are driving gentrification in his ward. I think we already know the answer to that one: supply and demand, courtesy Econ101.
As for the 1 mile wide dead zone…seriously? Properties half a mile from the Bloomingdale Trail need to be “protected” from gentrification? I don’t think so.
Also, numerous people have pointed out that there is a high demand for the kind of housing that is being built along the Bloomingdale Trail so if it doesn’t get built there it has to be built somewhere else. You can look at my most recent blog posts on new construction in Chicago and see where it’s happening. It’s going to be one of those neighborhoods and, because of the need to keep costs down, it’s going to happen where land is cheaper – i.e. gentrification somewhere else. No stopping it unless the entire city shuts its doors on developers.
More importantly, the premise behind this effort is fundamentally flawed. These aldermen ostensibly want to stop people from being displaced. However, that’s not really as big of a problem as they would have you believe. To understand this all you have to do is look at what new construction replaces:
- Vacant land. Nobody displaced there except maybe some squirrels or rats.
- A single family home – except the owner voluntarily sells, almost always at a significant profit over what they paid for the home. So how is that displacement? If it is then we have tens of thousands of people being displaced from all over the city every year.
- Often a 2 – 4 unit building with tenants. OK. That would qualify as displacement since the tenants have no choice in the matter. However, it’s not uncommon for the building owner to be living in one of the units so they’re not being displaced.
- Sometimes replacing commercial/ industrial space with residential space. Nobody displaced there.
I decided to take a closer look at some of the new construction single family homes that have been built in the last couple of years in these aldermen’s dead zone in order to find out what was being replaced. I identified 55 new homes but because this process is labor intensive I only examined 20 randomly (and I mean randomly) selected properties. Here are the results:
As you can see, out of 20 properties, only 4 2-flats were replaced by new construction and I’ll bet several of these were owner occupied. So I don’t see that much displacement happening.
If all these aldermen cared about was displacement you would think their ordinance would have been limited to preserving multi-unit properties with at least one tenant. In fact, that’s what these aldermen focus on when they talk about this issue – the loss of 2 – 4 flat buildings. So why doesn’t the ordinance just focus on those buildings? Could it be that they are actually focused on something else? Hmmm. You don’t think they’re worried about their chances of getting re-elected if their traditional voter base moves away, do you? Nahhh.
#ChicagoRealEstate #Gentrification #AffordableHousing
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.