Chicago Taps Brakes on Gentrification With a Tax on Teardowns

Chicago Taps Brakes on Gentrification With a Tax on Teardowns


(Bloomberg) -- Right next to the California stop on Chicago’s Blue Line, one-bedroom apartments in a new luxury building start north of $2,000 a month. Recently built single-family homes on adjacent streets frequently go for $1 million or more. Coffee shops and craft breweries have become neighborhood staples.





Scattered throughout: taquerias marked with a single dollar sign on Google Maps, and traditional duplexes and triplexes. These multi-unit dwellings have housed members of Logan Square’s Latino population since a wave of immigration in the 1960s, but lately the flow has gone in the opposite direction. The Latino population in the neighborhood has diminished to 36% from 65% in 2000, according to the US Census Bureau, as wealthy, and often White, residents find appeal in the area’s trendy businesses and proximity to The 606, a 2.7-mile railway-turned-walking and biking path that opened in 2015.

“Living in a gentrifying neighborhood is like living with a live and open wound,” said Christian Diaz, who was born in Mexico but has called Logan Square home for most of his life. “It turns our streets into an emotional minefield because it just seems like our neighborhood is valuable now because White people want to live here. And it wasn’t before, because it was predominantly Latinx.”

Still, Logan Square is not completely transformed. There is new, upscale development here, Diaz said, but less than some surrounding neighborhoods — in part, he added, because community organizers in Logan Square have found a patchwork way to slow the march of gentrification that’s spreading westward from the main commercial Loop. One key tool: a pilot ordinance that charges developers a fee of at least $15,000 for tearing down existing buildings.


The ordinance was born of the advocacy of Palenque LSNA, formerly known as the Logan Square Neighborhood Association, for which Diaz is the housing director. It’s one of a suite of policy interventions — including minimum density requirements, home repair grants and allowing additional units — that community organizers and Windy City officials have put forth in recent years to preserve a dwindling supply of affordable residential units. These are often found inside the two- or three-story townhouse-style buildings — like the city’s distinctive “two-flat” homes — that occupy the “missing middle” of the housing market.

“We still remain 4 million homes short of housing generally in the US, and so we can’t afford to lose any of the existing stock,” said Justin Dorazio, a research associate focused on racial equity and justice at the Center for American Progress, a liberal public policy research group. “But we also have a requirement that we keep the existing stock up to a decent enough quality,” he said — otherwise, unsafe conditions can drive displacement, with a particular impact on low-income people, people of color and people with disabilities.

Nationwide, at least 110,000 Black residents and 24,000 Hispanic residents were displaced from urban areas between 2000 and 2013, according to the National Community Reinvestment Coalition, meaning they won’t benefit from the economic growth and services that come with neighborhood revitalization projects. As more cities attempt to address displacement with zoning rules that allow for increased housing density, Dorazio said Chicago’s demolition fee and other preservation interventions provide a unique potential solution that works alongside new development.

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