606 Development Ban

Although this is not a Rogers Park story, we should all be paying attention to the ban on demolitions that was recently approved by the Chicago City Council, effectively halting development near the western half of the 606 Trail.

The opening of the 606 in 2015 got a lot of attention, not just for the innovative reuse of an abandoned, elevated, railroad right-of-way, but also for the notable impact this new amenity had on property values in its vicinity.

For those readers not familiar with the 606, it is the conversion of an elevated railroad into a public park and bike trail. It runs parallel to Bloomingdale Avenue from just west of Paulina Avenue in Bucktown, to Ridgeway Avenue, about a block east of Pulaski in Humboldt Park, a distance of about two and a half miles.

Since it opened, it has been wildly popular, attracting bikers, walkers, neighborhood residents, visitors from elsewhere around the city and even well beyond. It has also brought considerable attention to the area it traverses and, apparently, motivated some visitors to consider the neighborhood as more than just a place to visit, but also as a place to live.

Even before the 606 opened, the eastern half of the area it runs through was thoroughly gentrified. Single family homes and condominiums in the Bucktown/Wicker Park area (basically everything along the 606 to the east of Western Avenue) were already among the most expensive in the city. Rents in these areas were also already high compared to city averages.

But the areas along the 606 to the west of Western Avenue were still much as they had been. Sure, there was a fair bit of gentrification occurring in Logan Square just to the north. But in 2015, this trend had not yet taken firm hold in Humboldt Park which remained, at that time, a bit “off the grid” of the urban pioneers.

Statistics don’t always tell the whole story. The implication that the same old house that sold for $97K in 2012 could suddenly command nearly $500K six years later is simply false.

The 606 changed all that in a big way. One widely repeated statistic is that, between 2012 and 2018, small residential property values increased by 376%, jumping from $97,000 to $462,000 during this six-year period.

But statistics don’t always tell the whole story. As an editorial in Crain’s Chicago Business points out, the buildings being sold in 2012 were almost all older properties in need of significant renovation. By 2018, many of the buildings being sold had already been renovated and were in significantly better shape. Therefore, the implication that the same old house that sold for $97K in 2012 could suddenly command nearly $500K six years later is simply false.

The City Council did what it always does – it passed a law that attempts to stop the market in its tracks.

We hear the same narrative in the press about “skyrocketing rents.” About the only time you see rents increase substantially anywhere in the Chicago area is when an owner invests substantial capital in a property, creating a better unit. Of course apartment rents are going to be a lot higher after an owner puts $20K or $30K into new electric, plumbing, kitchens, baths, etc. If rents didn’t go up, the owner wouldn’t invest that money in the first place.

Faced with these raw statistics, and responding to a well-organized campaign of community activists outraged over the sudden changes occurring in these neighborhoods, the City Council did what it always does – it passed a law that attempts to stop the market in its tracks, in the process passing along to the property owners the full cost of any “harm” suffered by tenants who now either have to pay more rent, or find a new place to live.

As always, the narrative we hear from our “Progressive” city leaders is that tenants are helpless victims in a process over which they have no control. Gentrification is pure evil, disrupting communities and displacing long-term residents. And property owners are greedy opportunists, trying to take advantage of helpless tenants to make a fast buck, regardless of the consequences.

The predictable response – this time from Aldermen Maldonado (26th) and Ramirez-Lopez (35th), whose Wards overlap the areas nearest the 606 – was to propose a complete ban on demolition and zoning changes in a large area around the trail for 17 months while they put together a more comprehensive “solution” to this “problem.” Nevermind that Maldonado himself has made huge profits from just the kind of buying and flipping of properties along the 606 that he now claims to be so adamantly against.

To her credit, Mayor Lightfoot recognized the harm of this proposed legislation, saying “we need a surgical knife, not a club.” As a result of her intervention, this ban was reduced in scope to an area more tightly confined to just 606-adjacent areas. She also got the ban reduced from 17 to six months.

To her credit, Mayor Lightfoot recognized the harm of this proposed legislation, saying “we need a surgical knife, not a club.”

But, at the end of the day, we still have the basic narrative that tenants are helpless, property owners are greedy and have all the power, and that gentrification is an evil that must be fought at every turn.

How did we get here? When did neighborhood improvement become synonymous with displacement and oppression (with strong racial overtones)? And where are the politicians brave enough to say that there are at least an equal number of benefits (if not more) to neighborhood improvement as there are negative consequences?

Make no mistake. There is harm caused by increasing home prices and rents. No rational person can argue that there is not some harm suffered by certain groups of people who have lived in an area for many years, whose incomes are limited, and who suddenly face significant rent increases and the prospect of having to find a new place to live. All of these consequences cause real harm to real people.

Where are the politicians brave enough to say that there are at least an equal number of benefits (if not more) to neighborhood improvement as there are negative consequences?

But a bigger problem, as least from the perspective of many property owners (RPBG Members certainly included) is that the entire issue is framed as a false choice between improvement and stability, and that the multitude of benefits from neighborhood improvement are not only overlooked, they are scorned.

I have written extensively in this Newsletter of the need for the public to take a realistic look at both the benefits and negative consequences of gentrification, and to come up with workable solutions where the costs of these solutions are equitably distributed across all of society. If our city values diverse communities and affordable housing – and, in my humble opinion, we should all value diverse communities and affordable housing – then we must come up with ways to keep communities diverse and housing affordable THAT IS NOT BORNE SOLELY BY PROPERTY OWNERS. Is this such a difficult concept?

Banning demolition and zoning changes may fire up the base and get you a few extra votes at election time. But it does nothing to solve the underlying problem that we do not provide enough rent support to low-income households, and that we devote insufficient resources to building new affordable housing in a wide range of neighborhoods where this housing is most needed.

The entire issue is framed as a false choice between improvement and stability, and that the multitude of benefits from neighborhood improvement are not only overlooked, they are scorned.

Aldermen Maldonado, Ramirez-Lopez, and other like them in the Progressive Caucus, can continue to rail against gentrification. They can continue to stand in the way of the market and try to impose the costs of gentrification exclusively onto the backs of property owners through extended tenant rights (such as the proposed “Good Cause” ordinance, rent control, demolition bans, down-zoning… the list goes on and on).

But these measures ignore two realities that the Progressive wing of the City Council would do well to remember. First, many of their constituencies are benefitting from the neighborhood improvement now occurring in places like Logan Square, Pilsen and, yes, Rogers Park. Some of this benefit is dollars and cents as long-time home-owners are able to obtain higher rents on their apartments, or simply sell their buildings at big profits over the low prices they paid decades ago.

We must come up with ways to keep communities diverse and housing affordable that is not borne solely by property owners.

(And – note to Maldonado and Ramirez-Lopez – not a small number of these beneficiaries are not outside carpet-baggers, but actual community residents that have just as much invested in these neighborhoods as their rent-paying neighbors. And, yes, many of these owners are from minority groups. The thinly veiled attempt by these politicians to draw sharp racial lines between the beneficiaries of improvement, i.e. while people, and those hurt by it, i.e. African-Americans and the Latinx communities, is simply not supported by the data or the reality on the ground.)

Finally, neighborhood change also benefits tenants in a lot of meaningful ways. To read much of the press these days, you would think that Pilsen and Logan Square have seen the wholesale removal of one entire population – largely Latino – and repopulation by another – largely white. Again, the reality is not so simple.

Many renters in these neighborhoods – renters of all races – can now take advantage of all the new businesses that have come to these neighborhoods, the falling rates of crime, the improvements in the local schools, and the better conditions of many of the buildings, many of which were in serious need of reinvestment. Yes, these benefits come at a price. Property values and rents go up as these areas become more desirable to a wider range of people. But these benefits are real, and they do not only benefit the new people moving to these areas.

The black and white view of the helpless tenant versus rapacious property owner has never been the whole story. If you look for this reality, you can find it. But the whole picture is so much more nuanced and complex.

No matter where you stand on these larger issues, the ban on demolitions and rezoning along the 606 Trail is now law. The Progressive Aldermen got at least part of what they wanted. It is the hope of many of the members of RPBG that the City Council uses this six-month hiatus wisely to craft new legislation that will fairly and equitably help low-income residents stay in these neighborhoods without putting the burden of this cost on property owners.

It is the hope of many of the members of RPBG that the City Council uses this six-month hiatus wisely to craft new legislation that will fairly and equitably help low-income residents stay in these neighborhoods without putting the burden of this cost on property owners.

If history, and the current tone of the conversation, have any bearing on what comes next, we as property owners have little reason to be optimistic. If there is one silver lining, it is that the new Mayor appears to understand that the world is not as black as white as many Alderman seem to believe. We, as property owners, can only hope that the Mayor and a handful of more rational Alders can keep the focus on both the pros and the cons of neighborhood reinvestment. Focusing only on the cons will solve nothing. In fact, it will create even bigger problems for everyone.