The Nathalie P. Voorhees Center is an applied research and
professional assistance unit of the College of Urban Planning and
Public Affairs at the University of Illinois at Chicago. Its mission
is to improve the quality of life for all residents of the
metropolitan area through assisting organizations and local
governments in efforts to revitalize the many and varied neighborhoods
and communities in the City of Chicago and its suburbs.
We would like to thank the many people who agreed to be interviewed for this report. We would also like to thank the following people for reviewing and commenting on earlier drafts: David Ranney, Sheila Radford-Hill, Maureen Hellwig, Raul Raymundo, David Hunt and Doug Gills.
Support for this project was provided by The Chicago Rehab Network and the Nathalie P. Voohrees Fund. This report was also funded by the University of Illinois at Chicago Neighborhoods Initiatives Community Outreach Partnership Center Grant of the Department of Housing and Urban Development.
The Chicago Rehab Network (CRN) requested the University of Illinois at Chicago Center for Urban Economic Development (UICUED) and the Nathalie P. Voorhees Neighborhood Center to participate in their Development Without Displacement Task Force.
The CRN organized a task force of representatives from communities undergoing gentrification and displacement, government officials, business interests and researchers. The task force had as its goal to develop a series of policies for the City of Chicago to guide community development without displacing the existing residents and businesses who reside in communities that need reinvestment.
Staff from UICUED, VNC and a Policy and Research Action Group (PRAG) intern assigned to CRN, formed a research team and did background research on how other cities have alleviated or prevented displacement and gentrification. The research team also looked at the policies and programs at the federal level and City of Chicago programs that were being implemented. In addition, the research team analyzed the background research available on this topic. The following report summarizes the work of the research team for the task force members and others interested in this important issue.
In this paper, we have outlined approaches, policies, strategies, or programs addressing the issue of development without displacement. Can we find ways to redevelop communities for their current low-income residents? Can we find ways to include the costs of displacement in redevelopment? To answer these questions we have compiled a list of programs and strategies that have been used in Chicago and other cities. In addition, we have included a section on case studies of Chicago communities that have been fighting displacement. In these case studies, we have put the strategies in a context to show how different communities and situations call for different strategies. In the last section, Concluding Remarks, we try to show a way forward by discussing how a combination of strategies are needed with an overriding policy that views development without displacement of low income residents as a serious urban issue.
The Chicago Rehab Network (CRN) requested the University of Illinois at Chicago Center for Urban Economic Development (UICUED) and the Nathalie P. Voorhees Neighborhood Center to participate in their Development Without Displacement Task Force.
The CRN organized a task force of representatives from communities undergoing gentrification and displacement, government officials, business interests and researchers. The task force had as its goal to develop a series of policies for the City of Chicago to guide community development without displacing the existing residents and businesses who reside in communities that need reinvestment.
Staff from UICUED, VNC and a Policy and Research Action Group (PRAG) intern assigned to CRN, formed a research team and did background research on how other cities have alleviated or prevented displacement and gentrification. The research team also looked at the policies and programs at the federal level and City of Chicago programs that were being implemented. In addition, the research team analyzed the background research available on this topic. The following report summarizes the work of the research team for the task force members and others interested in this important issue.
In this paper, we have outlined approaches, policies, strategies, or programs addressing the issue of development without displacement. Can we find ways to redevelop communities for their current low-income residents? Can we find ways to include the costs of displacement in redevelopment? To answer these questions we have compiled a list of anti-displacement strategies that have been used in Chicago and other cities. In addition, we have included a section on case studies of Chicago communities that have been fighting displacement. In these case studies, we have put the strategies in a context to show how different communities and situations call for different strategies. In the last section, Concluding Remarks, we try to show a way forward by discussing how a combination of strategies are needed with an overriding policy that views development without displacement of low income residents as a serious urban issue.
Redevelopment of residential areas is often synonymous with the replacement of its low income tenants and uses with higher income ones. As real estate, businesses, institutions, and other elements in the community are upgraded, property values increase, real estate taxes are assessed at a higher value, codes are enforced, and infrastructure is improved. Other multiplier impacts and ensuing waves of investment further increase the cost of living in that area. The costs of redevelopment are recovered via higher rents or sale prices for property; speculation is attracted; previous businesses tied to lower income residents cannot afford the new rents. Desirability of the area as a place to live attracts higher income residents who not only demand better accommodations but also require other retail. The result of the process is the out-pricing of former residents.
Displacement is usually not considered an issue in the re-development process. Most people see the need for development. In a market society, place of residence is dictated by what is available and what households can afford. Neither the public sector has included this matter in the public debate and the search for policies, nor do developers feel the responsibility to address it. Displacement is either viewed as an unintended impact, a necessary evil, or a result of the natural dynamics of the market--the allocation of each parcel of land to its best possible use. Households are on their own. They have to play the market: win, loss, weigh their options, and make their choices according to what they can afford. Developers are acting to maximize returns within the terms of the law. For this, they cut costs, minimize or control risks, and go after "the right tenants." Responsibility for the social impact of their actions is not a concern. As long as the law does not demand this, they are not obligated to do anything. Besides, they have the lobbying power to fight against changes and for better conditions. In a competitive economy and society, they can always hold society hostage by claiming that they will take development to places where they can best maximize returns and away from those adding claims and costs on them.
Meanwhile, households have to absorb the costs and hardships associated with relocation. Housing markets in low-income areas are often tight. As a result, either people have to settle for worse conditions--smaller spaces, worse locations, or incur higher permanent expenses in housing. There are many other expenses associated with relocation such as the search and the cost of moving. And there are extreme social costs and hardships: loss of support institutions, disintegration of survival networks, friendship and family networks, changing schools, and political linkages. Low-income households are particularly sensitive to such costs because of their lower mobility and their more limited ability to participate in the market.
Efforts to deal with displacement have been limited. They have been generally restricted to development projects that had direct public funding. Even in these cases, their success is highly questionable. Assistance in urban renewal projects was largely limited to placing people in public housing. In other cases, financial assistance was absorbed by higher rental costs elsewhere. Cases such as Lake Meadows-Prairie Shores, Presidential Towers, and others in Chicago suggest that the benefits of these projects accrue in large proportion to the middle class whose attraction is a function of the project's success. The record of publicly subsidized projects in providing low-income housing has been dismal.
At the same time, development produces many hidden and indirect costs for the public--infrastructure, tax abatements, land write-downs. These costs are not included in discussions between government and the private sector. Certainly, there is no requirement that such projects provide low-income housing or include the costs of relocation of low-income populations. Instead, the public has to assume these costs either through assistance to displaced households or through the problems associated with their relocation--increasing disinvestment and crowding in low-income communities, among others. Loopholes in the law, poor supervision by public agencies, and other factors have helped developers escape requirements and avoid compliance.
The bottom line is that, no matter how private, redevelopment always requires public approval and assistance. It may include land condemnation, zoning changes, building permits, changes in density, capital improvements, new infrastructure, tax re-assessments, land write offs, planning, etc. In this sense, the public sector has the ability to pre-empt it, slow it down, limit its scope, intensity, and displacing impact; promote it, accelerate it, support it, or facilitate it.
For the purpose of this paper, displacement refers to development that forces people to move from their current residence. Examples of this include land clearance or investment that makes housing unaffordable for current residents. It can be direct or indirect. Displacement is direct when it requires the move of current residents (vacating buildings, land clearance). Indirect displacement refers to actions that displace people through their impacts (raising taxes and rents). The most typical form of displacement affects low-income people when their residences are torn down or when improvements make their current locations unaffordable.
Displacement can be caused in many ways. We want to emphasize here public or private development that results in the displacement of current residents. Such is the case of the decision to build a stadium in a residential area or the decision to tear down low-income housing for construction of a university. Similarly, it may be caused by redevelopment activity that leads to the replacement of current low-income residents in a neighborhoods for higher income ones in the same space. Lastly, redevelopment of an area may cause displacement in another via price increases.
One of the leading forms of redevelopment today is gentrification. Gentrification results from transformation of a community from a lower to a higher income. Current residents are out-priced via tax or rental increases, speculation, higher property values, pressure, comparatively sizeable offers for their homes, historical designation, or inability to bring their properties up to code.
Intervention may seek the relocation of those displaced in a comparable, if not better residential area. It may include compensation. It may give people a choice as to where they wish to move and the means to do it. Alternatively, it may try to stop or prevent displacing forms of development.
In Chicago, redevelopment of the central area and of other selected communities often under the leadership of institutions such as universities and hospitals, operating with the full support of the public sector, has replaced many low income areas for higher income ones. By intent and definition, urban renewal and conservation achieved this in places such as the Near North Side, Lincoln Park, Hyde Park, the Hull House, and the Near South (Lake Meadows, Prairie Shores, Chicago Commons, Michael Reese and IIT). Other projects including extensive land clearance such as highway construction, the White Sox Park and the United Center have produced the same result. Most recently, gentrification has transformed traditional working class communities such as Lake View and Wicker Park into areas for upwardly mobile households.
The extent and intensity of displacement has not been measured. Those affected have been forced to absorb the costs. Communities have often mobilized to oppose displacement or to demand compensation. However, every community has had to wage its own struggle against formidable obstacles. Recently, community coalitions have been formed to tackle these issues comprehensively, to develop policies, and to form common fronts. City Hall has never made this into a central issue, has addressed each case separately, and has lacked the will to deal with this problem in any meaningful way. The challenge of communities and the public is to raise this from a local matter affecting a group at a time, into a comprehensive interest and goal.
Perhaps the most important factor to mention here is that these development efforts have ignored low-income residents. Their presence is viewed as a nuisance and their removal as a blessing. Meanwhile, redevelopment was facilitated by the low acquisition price of low-income areas and the large profits that came with their replacement with higher income tenants and uses.
Displacement is carried out in many ways. The simplest one is when the area is scheduled for clearance and residents are asked to move. This is often done on short notice. In this way, residents do not have time to organize, mobilize, and resist the move.
Displacement takes many other forms. People are charged higher rents. Buildings are scheduled for gut rehabilitation. Taxes are increased substantially and owners cannot afford them. Code violations are enforced, owners lack the means to fix them, and have to sell. Disinvestment deteriorates buildings to the point that they are no longer livable. Buildings change ownership and the new owner decides to replace the current tenants. Units are converted into smaller spaces or into larger ones and rents are raised. Current owners or residents are pressured to sell through constant calls, threats, offers they can not easily turn down. Arson and other mechanisms are used to scare people away, and to clear land for redevelopment.
Gentrification is the most recent case. Displacement here is long term and assumes many open and hidden forms. Some of them are mentioned above. Others include assistance from aldermanic offices and public entities and individuals, zoning changes, housing conversions, historic landmark status, speculation, recruitment of higher income groups, formation of organizations among gentrifiers to push low-income people and uses out and to increase the value of their investment, and substantial capital improvements.
Many efforts have been developed to address some of these issues. They are listed below. Many of them are piecemeal or limited. They often address only one of the elements of displacement, leaving others untouched. What is generally lacking, is a comprehensive policy framework. Strong and concerted actions on the part of communities and their representatives certainly could make a difference as everybody is pursuing the same goals, is including this issue in every development efforts and is looking to build a comprehensive framework to attack the problem. This requires political will, consistent pressure, and synchronization of actions under a single goal.
In this section we discuss a variety of strategies that have been used at the federal, state and city levels of government. In addition, we have a section on strategies used in other cities which includes not only strategies used by city governments but also by community groups in other cities and in Chicago. From the start, we should be clear that almost all of the strategies that are now federal, state or local laws were only passed and implemented because of community struggles, protests or lobbying. Whenever possible, we give the history of the strategy so we can all understand how these strategies have been developed over time.
The following section outlines the federal programs and regulations which can be used as strategies or tools to alleviate or minimize the displacement of residents due to federally funded initiatives.
This federal mandate states that for every federally subsidized
housing unit that will be destroyed, a new housing unit must first be
built to replace it. This regulation was passed during the Reagan
administration. It was pushed by public housing activists to preserve
public housing and prevent public housing authorities around the
country from selling or tearing down units. Currently, the Chicago
Housing Authority has developed a policy to tear down many of the high
rise developments and replace them with scattered site units.
According to existing federal regulations for one-for-one replacement,
they must first build replacement scattered site units before they can
destroy the high-rises. (Contact: HUD & CHA)
The Uniform Relocation Act provides aid to those individuals being
displaced by federally funded initiatives. It requires that displaced
families be given services which include referrals to comparable and
suitable replacement homes; payment for moving expenses; and
replacement housing assistance which enables the family to either rent
with rental assistance payments (based on the difference between what
they are presently paying and the market rate for a similar unit; it
last approximately 42 months) or buy a suitable replacement home with
down payment assistance. This Act was a direct result of community
protests against Urban Renewal in the sixties. Initially, Urban
Renewal programs did not require any relocation benefits. Only after
community groups in several cities protested the unfair displacement
of residents, did the Relocation Act become part of federal law and
procedures.(Contact: HUD)
There are laws working within CDBG funding proposals that work in
conjunction with the Uniform Relocation Act. These laws were introduced
by Congressman Barney Frank in 1988 and 1989 in an effort to
strengthen the guidelines for CDBG funding. The laws mandate that
every CDBG proposal should have an anti-displacement plan.(Contact:
Larry Yates and Rikki Spears of the Low Income Housing Information
Service/ Washington D.C.)
While Section 8 is a rental assistance program for low income
families it also has been used as a tool to assist families displaced
as a result of federal initiatives and also as a tool to preserve
affordable housing units in areas experiencing reinvestment.
Certificates which are given directly to the family or individual allow
them to find another housing unit, to replace the unit that they are
losing due to the reorganization of the public housing authority or to
development funded by federal programs. Families being displaced by
federal initiatives are usually put at the top of the list for this
benefit. For the family who qualifies for this program but is not
being affected by a federal funded displacement scheme it is usually a
wait of several years before a certificate is obtained. An official at
the City of Chicago's Department of Housing states that there is a
65,000 to 75,000 backlog of those who want Section 8 Certificates.
Project-based Section 8 housing development was a tool used by many not
for profit developers to preserve affordable housing in their
communities. This program attached the rental subsidy to a specific
housing unit. The family who occupied this unit had to qualify as low
income according to the federal guidelines. This program has been cut
back drastically over the years and presently is being threatened with
elimination by the Congress. (Contact: CHA / HUD)
With the reduction over the years in Project-based Section 8 and
the 1986 changes in the tax laws related to housing syndications, more
and more developers have had to rely on tax credits to rehabilitate or
build low income housing. Low income housing tax credits were
established by Section 252 of the Tax Reform Act of 1986 to replace
traditional tax incentives for investment in low income housing which
were eliminated by the same law. Section 42 of the Internal Revenue
Code of 1986 permits taxpayers to claim tax credit on their federal
income tax returns for qualified expenditures for low- income housing
units placed in service after December 31, 1986. There are two
approaches: either 70 percent for non-federally subsidized new
construction or substantial rehabilitation, and acquisition cost; or
30 percent for federally subsidized new construction or substantial
rehab. Both require a set-aside requirement of at least 20 percent. A
project's units must be rent-restricted and occupied by tenants with
annual incomes of 50 percent or less of the area's median gross income
with some variations. Tax credits also require an Allocation Plan
which should be developed by state agencies such as Illinois Housing
Development Authority. The Plan provides a blueprint for the process
the agency will use to accept applications from potential applications
and how they will be evaluated. This must all be approved as part of a
public hearing process. Pressure could be applied to groups to provide
anti-displacement measures within their selection process of potential
applications. However, we found no examples of this kind of
selection process in other cities or states. (Contact:Illinois Housing
Development Authority)
Title II of the National Affordable Housing Act of 1990 created
the HOME Program. The HOME program and funds have a number of rules
and regulations which can effect the anti displacement of low-income
residents. "A proposed Final Rule" is one such regulation which
requires that the affordability of HOME funded projects be preserved
for the remaining useful life of the property, or a lesser period
consistent with sound economic principles. As it stands now
affordability for the rehabilitation of rental units is required for
only five years if less than $15,000 in HOME funds is invested per
unit; for only ten years if the amount is between $15,000 and $40,000
per unit; and for only 15 years if the amount is more than $40,000 per
unit. For those projects which involve new construction, affordability
must be maintained for only 20 years. Presently, there is political
action which is attempting to increase the time periods and have the
existing times be minimums. (Contact: HUD and information provided by
Federal Register)
This act amends the 1986 Internal Revenue Code by providing tax
incentives to encourage the preservation of low income housing. The
focus of the act is to save the approximately 240,000 subsidized Sect.
221 D and Sect. 236 projects which are currently coming to the end of
their term. In the next five years another 900,000 units will also be
ending their term. It is an attempt to stop the private owners of
these developments from prepaying their mortgages to get from
underneath the federal requirements. As a strategy, this act provides
for the maintenance of existing affordable units which, if not
preserved, could mean a significant displacement of people unable to
afford the increased rents of these units without the federal
subsidies. (Contact: Larry Yates and Rikki Spears of the Low Income
Housing Information Service/ Washington D.C. also see the Federal
Register)
This act requires federal agencies that supervise financial
institutions to encourage them to help meet the credit needs of their
communities, including the needs of low and moderate income families
and individuals. It requires the supervising federal agencies to
assess a financial institution's record of community service especially
when the financial institution is filing for an expansion. The act
requires that the bank and savings institutions prepare a CRA statement
for each of the communities it serves. The CRA has been used as an
anti-displacement strategy by community groups when they have organized
and negotiated a CRA agreement with the banks or savings institutions
in their community. Many of these agreements have provided more
affordable and accessible financing for investments in their community.
The Joint Planning Council (JPC), a coalition of low-income
housing groups in New York City, is currently developing an organizing
drive that would fight for important changes in CRA. As currently
written, The CRA gives credit to banks whenever they provide loans in
low and moderate income communities. So, banks get CRA credit even
when they provide a loan which benefits high-income residents, as long
as the property is located in an area which qualifies as low and
moderate income. Obviously, these sorts of loans only encourage
gentrification to occur. JPC will be fighting to change CRA so that
banks are judged on the effect that their loans have on low and
moderate income people. Now, they are judged solely on the fact that
they made a loan, even if it caused displacement or gentrification.
(Contact: Woodstock Institute, Chicago)
The Empowerment Zone concept is a Clinton Program which is attempting to rebuild the urban environment with the combination of economic development and social programs. The idea of Empowerment Zones grows from the enterprise zone concepts of the Republican Party. The Clinton Administration has developed the concept of enterprise zones a step further with the inclusion of social programs. Empowerment zones work in a similar fashion to the enterprise zone where firms would get wage tax credits for any worker who lives in the zone boundaries. Firms would also get other tax incentives as well as the ability to float bonds. Residents within the zone as well as businesses would have the opportunity to seek waivers of different state, local, and federal regulations.
Nine (six urban and three rural) empowerment zones have been chosen. Each empowerment zone will receive $100 million in funding and an estimated $250 million in wage tax credits over a ten year period. Chicago was chosen as one of the cities to receive an empowerment zone. The zone includes the neighborhoods of Kenwood, Pilsen, Near West Side, West Garfield, Austin and Little Village. The empowerment zone could potentially aid these communities with economic development, social programs and other incentives. All of these amenities should aid in the development of these areas without displacing the indigenous residents.
Based on our interviews with present and past City of Chicago officials in the Department of Housing and the Department of Planning and Development, the City of Chicago has no policies outside of the federal regulations and policies we have already discussed to alleviate displacement when development occurs. This is particularly true when the displacement is caused by market driven forces. We have included below a description of how the city implements federal policies, City programs that could be viewed as preventing displacement, and other City strategies which were mentioned in our interviews as anti-displacement.
The City of Chicago implements the federal Uniform Relocation Act.
The City enforces it on CDBG funded projects and also on projects that
are funded with City dollars outside of CDBG funding. The city is in
charge of providing the necessary services involved in the relocation.
According to Department of Housing records, the department has assisted
in 712 relocations between 1990-95. These relocations have been
predominantly residential (606). Low income households have been 89%
of the households needing relocation assistance. In addition, 53%(319)
of the relocated households have been low income female headed
households and 192 have been female headed households with children.
The Relocation Unit has 8 staff members. (Contact:City of Chicago
Department of Housing, Household Services Division)
According to the 1994 annual report of the City of Chicago's
Department of Housing, the city created its first Tax Increment
Financing district for the development of affordable housing. This
project located at 45th and South Martin Luther King Drive created 96
units as part of the Phase V development of the Paul G. Stewart Homes.
The TIF allows the city to use the money generated from the tax
increment on the vacant lots for development within the ( TIF)
district. They are then able to use this money to do such things as
write down the bonds or provide additional financing for the project.
(Contact: Department of Housing)
This strategy describes a one time "hands off" approach the city
took during the negotiations between the United Center developers and
the Interfaith Organizing Project community organization. It is the
opinion of one city official that this strategy worked on the Near
West Side. The City backed away and essentially informed the stadium
developers that nothing would get built unless some type of agreement
could be hammered out between the stadium developers and the community.
This enabled the community to deal directly with the private
developers to negotiate a plan to alleviate the displacement of
residents and have the developers provide other benefits (ie.jobs,
improvements) to the community.
This strategy has not been supported strongly by the present City administration. According to the Chicago Rehab Network's analysis of Department of Housing's (DOH) fourth quarterly report, the City does not support CDCs as much as it supports for profit developers in the production and preservation of housing units. With more support, such as more funding for operating expenses, land conveyance, and improving the development financing and approval process, CDCs would be in a better position to improve neighborhood conditions and alleviate possible displacement of residents.
DOH recently changed the manner in which it provides money to CDCs
for general operating funds. Money for general operation is no longer
available through CDBG funding. All CDCs are eligible for the Capacity
Building Program. This DOH program provides grants for CDCs to improve
their organizational capacity by hiring consultants or attending
conferences, retreats, or training sessions. Funds for general
operation are available only through HOME monies to CDCs that are
certified by HUD as Community Housing Development Organizations
(CHODOS). (Contact: The Chicago Rehab Network)
After the demise of the Urban Renewal programs of the past, the
Community Development Commission was created to maintain many of the
same powers. The Community Development Commission has the ability to
name an area a Redevelopment area or a Conservation Area. The
difference between the two is that a Conservation Area does not require
that the area be found to be slum and blighted. Both these designations
require City Council approval. For both these designations, there must
be an approved redevelopment plan. Once the plan is approved, land can
be purchased and sold by the City below market rates. This land then
comes under the control of the City, and thus gives them the ability to
create affordable housing and monitor for displacement.
(Contact:Department of Planning and Development)
In its 87th year,the Chicago Plan Commission plays a principal
role in the initiation and review of the City's long range planning
goals. The Plan Commission exercises final authority, subject to
judicial review, with respect to all public and private improvements
along the lakefront and within the immediately adjacent neighborhoods
and commercial areas. The Commission has nine members appointed by the
Mayor and nine ex-officio members including the City Commissioner of
Planning and Development and the Zoning Administrator.
The Plan Commission reviews all major development projects in the
City, major zoning or land use changes, the industrial corridor
planning and the Conservation or Redevelopment Area designation. All
of their recommendations are reviewed by the City Council who has final
approval. Although the Commission plays an advisory role, it could
have considerable power if it adopted policies which were sensitive to
development without displacement. (Contact: Department of Planning and
Development/ Chicago Plan Commission)
CAPP is a program created due to the outcry of community residents
concerned with the abandoned buildings in their neighborhood. The
program was initially run by the Department of Buildings but then was
transferred to the Department of Housing. This Program outlines a
process whereby abandoned buildings can be acquired and transferred to
individuals, private and non profit developers interested in
rehabilitation for affordable housing. The program focuses on vacant
1-6 unit buildings and requires that the buildings be tax delinquent,
open and unsecured to qualify for the program. A list of CAPP
eligible buildings is published each quarter and interested developers
fill out applications requesting the buildings.. The applications are
reviewed by a mayor-appointed sub-committee who makes recommendations
to the City Council for their approval. The process from application
to receiving clear title from the City takes 12-18 months. Community
groups who have used CAPP are concerned about the length of time it
takes to obtain ownership of these buildings. Since 1991, 133 CAPP
buildings have been acquired and transferred to an owner who plans to
rehab the property. There are another 220 properties in the process of
being transferred. There has been 49 vacant lots transferred from City
ownership to an eligible buyer. (Contact: Department of Housing;
Developer Services Division)
The Heat Receivership Program is designed to preserve affordable
housing that may otherwise become vacant if a building is not
sufficiently heated. The Program allows the City to intervene in
housing court cases where multi-family buildings are insufficiently
heated during the winter months (November - April). The Court then
appoints a receiver to make the needed improvements and restore heat
to the building. They act as an interim property management company for
the multi-family building. During this process they collect rents and
make the necessary improvements. The receiver's costs in making these
improvements are reimbursed by the Department of Housing in exchange
for a lien in the full amount of the improvements. This program works
well in preventing displacement due to poor upkeep of many
multi-family buildings. It provides residents with legal action to deal
with those landlords who do not maintain their property. It enables
residents to stay in these units rather than relocate. (Contact:
Department of Housing, Real Estate Services Division)
HAPP is another program established to preserve multi-family
buildings in danger of abandonment. This program has more flexibility
than the Heat Receivership Program because it allows for a
court-appointed receiver to make emergency repairs to a number of code
violations and deteriorating conditions, such as; replacing the roofs,
electrical systems, and porches. The department of Housing, through
the Community Investment Corporation, provides the funds needed to make
the emergency repairs and stabilize those building until permanent
improvements can be made. A lien is placed on the building by the City
for the costs of the repairs. The lien can then be foreclosed by the
City, thus making the building available for transfer to a developer
for further rehabilitation and management. This developer can be
either a for profit or a not for profit as long as they have the means
and the know how to take responsibility. The program simply puts
buildings in the hands of those who want to maintain them and who are
committed to preserving housing. (Contact:The Department of Housing;
Real Estate Services Division).
The Tax Reactivation Program provides a mechanism for the City of
Chicago and Cook County to return tax-delinquent buildings and vacant
land to the tax rolls and provide affordable housing. In this program,
the City makes a non-cash bid to the County for tax delinquent property
on behalf of a developer who is applying for the building and/or the
vacant land. The County issues the City a Certificate of Purchase
which can be converted to a tax deed once the owner's period of
redemption has expired. The deed is then transferred to the
pre-identified developer for rehabilitation or new construction on the
vacant site. The Tax Reactivation Program has a formal application
that developers must complete before being selected and the process
generally takes between 18-24 months. It is up to the developer to
investigate and find those vacant parcels or buildings, usually with 7
units or more, which are tax delinquent. Once this task is completed
they can then begin the formal application process. Since 1989, 161
properties have been transferred through the Tax Reactivation Program
and another 35 properties are still in process. In addition, there have
been 81 vacant lots transferred through this process. (Contact:
Department of Housing, Real Estate Services Division).
This unit will assist tenants who have been evicted to apply for CHA housing or to find shelter space. The unit will also refer tenants to other city programs, which may benefit them. Finally, according to administrators at the Department of Human Services, a "very small budget" is available to cover the costs of relocation for tenants who are severely destitute. The small relocation budget is not documented or advertised because of fear that the department will be overwhelmed with requests. (Contact: Department of Human Services)
In this section we list the strategies we found being implemented and discussed in other cities. We compiled this listing from existing research and information, plus, whenever possible, we did telephone interviews with activists and government officials in other cities to find out what additional strategies were being implemented. If we found an example of the strategy being used by a Chicago community group, it is discussed in a separate Chicago section.
A community land trust is a private non-profit corporation created to acquire and hold land for the benefit of a community. It also provides secure affordable access to land and housing for community residents. Community Land Trusts essentially take land off the market by restricting speculation, absentee ownership of land and housing, and preserving the affordability of housing. The first option, if residents choose to sell at a controlled appreciation price, goes to the Community Land Trust Board. Ownership of the land enables the CLT to develop policies which must be agreed upon by those interested in the area before a long term land lease can be signed.
Burlington, Vermont offers a good example with the Burlington Community Land Trust which has made 102 housing units in Chittenden County.(Burlington Free Press 6/90, Contact: Burlington Community Land Trust.) Another example exists in Atlanta where the South Atlanta Land Trust(SALT) bought nine house sites in its minority neighborhood which was experiencing deterioration. Using various funding sources from both public and private sector, SALT homes were renovated and sold to low-income single women. Title to the homes is held by SALT and the sales agreement limits equity appreciation which eliminates speculation. (Contact: Community Information Exchange, South Atlanta Land Trust, Atlanta, GA)
Chicago Examples: The Chicago Acorn (Association of Community Organizations for Reform Now) chapter has used the land trust strategy. Acorn bought foreclosed homes from HUD, hired local contractors to rehab them, and either sold or leased with the option to buy to families in primarily the south side Englewood neighborhood. For some of the homes, the families also participated in the rehab with sweat equity which further reduced the rehab costs. The Acorn Land Association was established whereby the land association held the deed to the land and leased the house for 99 years. The lease is renewable and the land association has the first option to buy back the house. The buyer will receive what they paid for the house plus compensation for any improvements made on the house. There is a no appreciation clause in the land contract. There are 50 homes participating in the Acorn Land Association. Acorn combined the land trust strategy with the lease with option to buy strategy which gives the lessee 3 years to decide whether to buy the house. All of the payments during this 3 year period go toward the payment of the house at a preset price.
The
Local Initiatives Support Corporation (LISC) and several large Chicago
banks participated in the financing for the homes. These funders ended
up liking the land trust strategy because it was another interested
"party" which would care if the owner defaulted on the mortgage. In
addition, the land association's first option to buy also gave more
assurance to the financing institutions that an organization was
standing by to either assist the owner or buy the property in case of
default. Two other groups in Chicago have used this strategy or are in
the midst of organizing a land trust. They are People's Housing in
Rogers Park and Erie House in West Town.
According to the National Congress for Community Economic Development there are at least 2,000 Community Development Corporations (CDCs) across the country that have developed and own 320,000 units of affordable housing. These CDCs , many of which are in Chicago, use non-profit ownership to control housing and other property in their communities. By putting housing units in non-profit ownership it is essentially taking these units out of the market and preserving them as affordable units. One CDC in Richmond, Virginia, adopted a strategy where they went about buying property on every block in their community. The non-profit then had some control over speculation and development since they own property on every single block. The CDC can then decide if they would like to sell the property or hold on if they believe a proposed development could displace residents. This could also be described as a land banking strategy. (Contact: Larry Yates of the Low Income Housing Information Service Washington D.C.)
Chicago Examples: The Chicago Rehab Network represents 32 CDCs in Chicago that
own and manage over 10,000 units of affordable housing.
Land banks work in a similar fashion to community land trust, but
it is a strategy that can be short or long term. It is different than
the Community Land Trust which is only a long term community ownership
strategy. For example, in Baltimore, residents were faced with the
potential of a superhighway going through the Fells Point
neighborhood. The Southeast Community Organization organized residents
in an effort to stop the deterioration of absentee owned buildings.
The group formed a land bank which was financed by foundation funding.
Through the land bank, they purchased the homes of these absentee
owners, rehabbed the buildings and sold them outright to members in the
community or they offered a lease-purchase arrangement. The city also
provided low cost loans for renovations. Eventually 110 properties
were land-banked throughout Fells Point. (Contact:Community Information
Exchange, South East Community Organization/ Baltimore, MD)
In an effort to obtain more money from the city to build affordable housing , the members of the Boston/ HUD Tenant Alliance decided to using squatting as a strategy. They used the Copley Square Development as their target and set up white sheet tents on the exact sites where they felt housing was needed. The city eventually gave in because of the negative pressure from the press and provided the group with a multi unit subsidized building. This aided in obtaining affordable housing and also directed attention to a specific area where the grassroots agency felt there should be affordable housing. (Contact: Boston HUD Tenant Alliance, Michael Caine)
Committees of Social Self-Management in Moscow, Russia, have also used squatting, picketing, and blockading of luxury housing developments to call attention to the shortage of affordable family housing. Likewise, in cities around the world, squatting is one of the most popular strategies to force reallocation of land and housing to the needy.
Chicago Examples: A group called the Mad Housers assisted homeless
people by building small huts with a heater, cooking and sleeping
accommodations. These huts were then placed on railroad property. The
City of Chicago at first tolerated the huts and the squatting on
railroad property. But then, the City decided to evict the dwellers
and destroyed their huts. The City insisted that the dwellers either
seek shelter in public housing or in overnight and transitional
shelters.
This strategy gives community organizations eminent domain power
to acquire vacant land and buildings in their neighborhood. The Boston
group, the Dudley Street Neighborhood Initiative (DSNI), is the most
famous and only example of a group in the U.S. acquiring this local
power. Like many urban communities the residents of the Dudley Street
area found themselves surrounded by many vacant buildings and land.
They banded together to do something about the redevelopment of their
area. As part of a comprehensive planning process, DSNI wanted land
stewardship over time for their community. DSNI formed a separate
corporation, Dudley Neighbors, Inc. which is a nonprofit community land
trust that will acquire land and build affordable housing, commercial,
parks, and other needed community facilities. Dudley Neighbors, Inc.
also became the corporation which was designated with the eminent
domain powers. It has a board with a majority of residents along with
representatives from the City of Boston, their State representative and
City Councilor. Since receiving the power of eminent domain in 1988,
DSNI has received financial help from the Ford Foundation to buy much
of the land needed to do their housing development. Thus far, 300
housing units have been built because the community has planned and
organized to get eminent domain powers. (Contact:Dudley Street
Neighborhood Initiative, Boston, Mass .)
In Addison, Illinois, a group of residents have filed a class action suit against the City of Addison. The suit claims that the City of Addison is using the designation of a Tax Increment Financing District (TIF) to displace most of the Latino families of the area. The court case is still pending.
Chicago Examples: There are two recent examples in Chicago of community groups using class action law suits to fight displacement in their community. First of all, the South Armour Square Neighborhood Coalition has filed a class action civil rights suit against the White Sox, City of Chicago, State of Illinois, and the Illinois Sports Facility Authority which claims that the choice of the location of the new White Sox Park was racially motivated. The court case is based on evidence that the ball park could more easily have been located to the north and west of its present location and displaced less people. However, the people living to the north and west were white families. In this case, the remaining community residents are asking for the rebuilding of their community which was lost due to the relocation. This would involve 178 homes and 12 businesses.
In another case the Henry Horner Mother's Guild has a class action
suit pending against the Chicago Housing Authority which claims that
the CHA intentionally allowed residents of Henry Horner to live in
unsafe and dangerous housing. This court case has been an important
leverage for Henry Horner residents to have a say in the redevelopment
plans for Henry Horner and also a say in whether each resident or
family wants to stay in the area or take the option of moving to
another CHA development or be given a Section 8 certificate.
A limited-equity housing cooperative is owned by the residents, with resale restrictions built into the deed or other government documents to limit the value or the potential for inflation in the value of each member's share. The tenants of a privately owned building, when faced with the prospect of its sale or conversion to higher-income cooperatives or condominiums, will often form an association to purchase the building. They can then turn it into a limited-equity or leasehold cooperative. In a limited-equity housing cooperative, each member owns a share in the value of the building and land. Leasehold coops generally own and hold title to the land but give the developer ownership of the building through a long-term lease. The terms of the coops allow the leasehold cooperative to control management and future use of the building.
In Minneapolis, West Bank
Homes, developed jointly by a for-profit developer and the West Bank
Community Development Corporation, is a leasehold cooperative
comprising 65 homes. The $4.5 million project is financed through a
number of private and public funding sources. The project grew out of
the protests of renters when the city was planning extensive demolition
to make way for a high-rise housing development. The new development
would have destroyed the nature of the neighborhood.. The West Bank
Community Development Corporation will receive a 40 percent share of
the residuals from the eventual sale of the property and has a right of
first refusal at time of sale. These benefits will be transferred to
the residents' cooperative to help them purchase the
buildings.(Contact:Community Information Exchange, West Bank CDC,
Minneapolis, MN)
Limited equity cooperatives are a form of ownership and control that has been used in many cities in the United States and Europe. In Oslo, Norway, more households are in cooperatives than are home owners or renters in the private market. Since 1988, many Oslo cooperatives have converted to individual ownerships with less restrictions on the deeds. (Contact: Norwegian Building Research Institute)
Chicago Examples: Chicago has the second highest number of cooperatives in the United States with over 4,000 units, which is second only to New York. Chicago has dealt for many years with cooperatives especially those concerned with equity or limited equity housing cooperatives. One good example is the London Town Homes, 700 units of housing on the south side.
Leasehold Cooperatives have been much harder to obtain for the
Chicago area. One of the primary reasons behind this is that Mayor
Daley's administration has refused to make any loan commitments for
cooperatives, which eliminates the ability to receive Tax Credits.
Other states, such as Minnesota, have been successful with leasehold
cooperatives because they have specific laws that enable them to
receive loans for this particular type of endeavor. The closest
Chicago example would be the St. Clair Homes which is managed by the
Covenant Development Corporation. In this example the CDC is the
owner and the residents of St. Clair Homes have a lease on the
property.(Contact: Mutual Housing Network)
Under a lease purchase-arrangement, a house needing rehabilitation is purchased and repaired by a non-profit organization or other organization. It is then leased to a lower income family or individual at an affordable rent. This family is given the first option to buy the home after an arranged period. During this entire process, the renter is putting money aside and rebuilding credit in hopes of having a down payment for the home and securing their own mortgage. This strategy allows families who would otherwise be unable to afford or qualify for a mortgage to become homeowners and also stay in the area. It helps local residents remain in the community since the residents of the area would be given the first option to apply for the arrangement. This could also work for new construction.
In Cleveland, Ohio, the Cleveland Housing Network was founded in 1981 by the Famicos Foundation to renovate deteriorated housing throughout Cleveland. The foundation has helped to keep acquisition and rehab cost low. CHN receives donations of property, acquires abandoned buildings and then repairs them to meet city codes. The families are carefully screened and are usually picked from the area or an adjacent community. To date CHN has produced housing for more than 600 families, with a total property value of more than $20 million.(Contact:Community Information Exchange 1988, Famicos Foundation/ Cleveland Housing Network, Cleveland , Ohio)
Chicago Examples: The Lawndale Christian Development Corporation
has been using the Lease-Purchase Home Ownership arrangement. In
addition, Acorn Housing Corporation has also used lease-purchase along
with the land trust to facilitate more families being able to become
home owners.
In San Francisco, Boston, and Santa Monica, progressive coalitions have successfully created and implemented laws which links downtown development to the support of neighborhood economic development.
In San Francisco, the Council of Community Housing Organizations (CCHO) successfully lobbied for the passage of the Office Affordable Housing Production Program Ordinance in the mid-1980's. This ordinance required developers who built downtown office space to place money in an affordable housing pool. The exact amount required was determined by a formula based on the square footage of office space being developed. During the high-rise construction boom, this pool generated $27 million for affordable housing in the city. In the last few years, though, downtown office construction has ceased due to economic downturn and no new money has been generated.
CCHO also succeeded in winning passage of a similar ordinance which required downtown developers to pay into a funding pool for child care and another for jobs. The rationale it used in winning these ordinances was similar as that used to win on affordable housing. Downtown developers were building office space which was attracting higher income people to the area. In a tight real estate market, lower income people were forced to move by both rising prices and direct displacement. Light industries that employed lower income people were also being forced to leave. The ordinances were necessary compensation to those people whose lives were negatively affected by downtown development. Both these ordinances are asking developers to pay impact fees for their developments. This is an approach used more commonly in suburban areas. When a developer wants to do a major development the local municipality does an impact analysis on how this development is going to affect public services including such things as schools and parks. The developer is asked to include some of these costs in his overall development.
Chicago Example: There was an effort
under the Harold Washington Administration to do a similar thing here
in Chicago. It was called Linked Development and the Washington
Administration set up a task force to study how it could be
implemented. Similar to the SanFrancisco ordinance, downtown
developers would be assessed by the square foot to provide funding for
neighborhood development efforts. There was strong opposition by the
downtown development community and the idea was abandoned as a strategy
by the Washington administration.
These ordinances are modeled after the federal mandate but are used in a variety of forms at the local level. In New York City, an umbrella community organization called the Joint Planning Council (JPC) won a one-for-one replacement agreement from the city which affected only their particular neighborhood on the lower east side of Manhattan. This agreement required any developer who purchases city-owned land or property and develops it for higher-end use must fund the creation of the same amount of low-income housing units in the same neighborhood. Since this law went into affect, no luxury development has occurred in the area. JPC says that the real estate market in general collapsed in the city at the time they won passage of the agreement. Market decline, they argue, has caused the dearth of upscale development in the area.
In Seattle, local community organizations including The Tenants Union won passage of the Housing Preservation Ordinance. This required any landlord in the city who demolished low-income housing to replace the same number of units or make a contribution to the State Housing Trust Fund. This ordinance was struck down by the state supreme court three years ago as unconstitutional.
According to John Huerta of the Western Center on Law and Poverty,
California's Mellow Act requires that any time affordable housing
located along the Coastal Zone (a strip of land running the length of
the state's coast) is destroyed, it must be replaced one for one. New
affordable housing may be built within three miles of its original
location.
In Seattle, the city implemented a Tenant Relocation Assistance Ordinance in 1990. This ordinance applies to tenants of any property which undergoes any of the following: (1) demolition, (2) substantial rehab, (3) change of use, and (4) removal of government restrictions. Only low-income households, defined as 50% of the county's median income, can receive benefits. Under the ordinance, the city provides $1071 to each tenant for relocation. Until June 1993, landlords were required to match this amount. A pending court challenge by a landlord coalition, though, caused the local Department of Housing and Human Services to suspend this requirement. If a tenant can document that they had to pay more than $1,071 to relocate, however, the city will pay them up to $500 extra. Landlords are also required under the ordinance to provide 90-day notice of the pending eviction to tenants.
Staff at the city housing department say that the ordinance, as
initially written, was a burden on small-time owners. Also, they
complain that tenants often don't fill out the necessary forms
correctly or at all. In 1993, there were 339 units in Seattle deemed
to fall under the ordinance. Half of these were income-eligible. In
1992, 320 units were affected, but only 25 were eligible. Finally, in
1991, 491 units were affected and 154 were eligible. (See also federal
guidelines established under the Uniform Relocation Act which require
tenant relocation payments in the federal programs section of this
report)
Rent control laws restrict rent increases, either city-wide or particularly in gentrifying neighborhoods. Some allow rent increases only in certain circumstances, such as when ownership of the building is transferred. Many of the laws also limit the size of the increase. Regulations in New York City, for example, restrict landlords' ability to raise rents. Last year, for example, rents could only be raised 2%. The law in New York City, though, allows landlords to raise rents higher if they've made a significant capital improvement to the building. Activists in NYC also complain that tenants whose rent is raised beyond the legal limit wait for long periods as their case is passed through the bureaucracy. The law applies only to buildings larger than three units.
The Rent Stabilization Ordinance in San Francisco provides for a
similar level of rent control. While activists feel that its passage
has played a significant role in limiting displacement, significant
loopholes allow for abuse of the ordinance. For example, homeowners
can evict existing tenants if a relative moves in. Many owners arrange
for a relative to live with them for a short period, thereby evicting
the tenant and, after the relative moves out, legally jacking up the
rents.
Just as some suburbs limit the influx of lower income and minority people through restrictive zoning regulations, some activists have fought for zoning and land use controls which limit the influx of development associated with gentrification. In San Francisco, activists won passage of Proposition M, which put a lid on office development in the city and mandated over-riding guidelines for the Master Plan (San Francisco's overall land use and zoning plan). [Note that in Chicago we don't even have an equivalent of the Master Plan.] Proposition M mandated zoning and land use changes which encouraged the preservation of affordable housing, neighborhood-serving retail and service, and blue collar intensive industrial uses. The proposition passed its third time on the ballot.
The passage of Proposition M was followed in September 1990 by a rewriting of the Master Plan Residence Element in accordance with the demands of the activist community. In addition, community organizations in several San Francisco neighborhoods fought for specific zoning and land use changes in their neighborhoods which implemented the planning principles laid out in Proposition M. The local CHAS was written to encourage the creation of affordable housing which benefitted households earning less than 25% of the PMSA median income.
San Francisco activists also won passage of the Residential Hotel Conversion Ordinance, which prohibits most conversions and, for those that are allowed, mandates one for one replacement housing.
In Seattle, the city passed the Downtown Housing Maintenance
Ordinance. This ordinance restricts the ability of speculators to
leave residential rental housing in "good shape" sitting empty.
Condominium conversions directly reduce the supply of rental housing and often signal the full-scale introduction of gentrification into neighborhoods. Restrictions on condominium conversions, then, attempt to directly forestall the process. The Council of Community Housing Organizations in San Francisco fought successfully for such limitations, which were written into the city's Master Plan for zoning and land use and implemented in several neighborhood zoning changes. The changes were fought, of course, by development lobbies throughout the city.
The Pennsylvania Economy League (PEL), a state-wide housing and economic development research group, counsels against the use of anti-displacement strategies that restrict the development market. The PEL, after conducting a national survey of anti-displacement strategies, found that those strategies which restricted the market often discouraged any development at all from occurring in deteriorated neighborhoods. PEL urges the use of strategies which encourage low-income development without restricting the flow of the open market. Examples of strategies which PEL encouraged are support for Community Development Corporations and the creation of low-income cooperatives and other home ownership opportunities.
Chicago Examples: In Chicago,
current law requires that property owners who wish to turn their rental
apartment into condominiums must provide at least 120 days notice to
tenants. If a given tenant's lease expires within the 120 day notice
period, the tenant has the right to stay through the 120 days. If
their current lease runs longer than the 120 days, tenants may stay
until the lease expires. Tenants who are over 65 years old, blind, or
unable to walk without assistance must be given a 180 days notice. In
addition, the property owner must offer the tenant the option to
purchase their unit. That is, the tenant has the right of first
refusal. They also have the right to match any offer the property
owner receives for their unit, up until the time that the unit is
actually sold. (Contact: Metropolitan Tenants Organization)
These laws provide assurances to lower income and long-term residents that landlords cannot evict them easily, often by providing a minimum period of notification before eviction and by giving tenants an appeal process. In Seattle, landlords are required by the Tenant Relocation Ordinance to provide low-income tenants 90-day notice if they are going to be evicted.
Chicago Examples: In Chicago, the
Metropolitan Tenants Organization (MTO) is currently organizing to
change current law regarding this issue. At present, landlords do not
have to give any reason for refusing not to renew a tenant's lease.
The burden to prove that the landlord's refusal to renew is illegal
falls completely on the tenant. MTO wants landlords to be forced to
disclose their reasons for not renewing a lease. Only certain reasons
would be acceptable.
The Tenant Union in Seattle submitted a proposal to the City's
Mayor which, in part, called for taxes to be increased on vacant land
and buildings and parking lots. All three of which are held by
speculators. This idea originally arose when a local CDC wanted to
purchase a vacant building located in the downtown area. In
researching the building, the CDC found that the assessed valuation of
the property was approximately one-fourth of the asking price. Had the
assessed value, and hence the property taxes, been higher over the
years, then the building's owner would have been less likely to let the
property sit vacant and deteriorate. The CDC argued that the City
would not have been burdened with a vacant property and the housing
units would have been available to tenants in the city. The Mayor
refused to adopt this policy, claiming that speculators would not be
discouraged by higher property taxes. Arlen Olsen, an organizer with
The Tenant Union, thinks that the general mood against raising taxes
influenced the Mayor's decision. Olsen and other organizers plan to
continue working on this strategy.
These programs, often known as "circuit breakers" were especially popular in the late 1970's and early 1980's. They set ceilings on the amount of property taxes that certain people, usually the elderly and homeowners have to pay.
Chicago Examples: The State of Illinois Department of Revenue administers a program which provides grants to individuals over 65 years old and disabled persons. Program applicants are eligible if their income is under $14,000 annually per household regardless of family size. The amount of the grant is calculated based on the household's income and the amount of the property taxes paid. Renters eligible under the criteria listed above also may receive grants.
The Cook County Assessor's office runs programs which help senior
citizens with property tax relief. The Senior Homestead Exemption
provides an exemption based on the value of the property which directly
reduces the senior's property tax by $200 to $250 annually. All people
over 65 years are eligible. Secondly, the Senior Citizen Tax Freeze
Homestead Exemption freezes senior property taxes at the 1993 level.
Only households earning less than $35,000 annually are eligible. This
income level applies to the household who the senior lives with not
just the income of the senior. In addition, the Assessor has a
homeowner's exemption for owner-occupied 1-6 unit buildings. There is a
$450 cap on this exemption.
Rent subsidies take a variety of forms, from Section 8
certificates to direct subsidies to renters in selected apartment
buildings. They seek to put money in the pocket of lower income
renters, which will allow them to compete in the housing marketplace.
In some gentrifying neighborhoods, though, rents have increased to a
point that undercuts the competitive advantage of the subsidies.
Landlords, in addition, often avoid tenants with vouchers.
Tax Increment Financing districts have been used for many years in California to create low-income housing. Once an area is designated "blighted," then property tax increases are caught by a Redevelopment Agency which must spend at least 20% of the money on low-income housing creation. In Chicago, when the city names an area "blighted," the Department of Planning and Development then has authority to (1) acquire land and property in the area, using the power of eminent domain if necessary, and (2) sell off land and property in accordance with its redevelopment vision for the area. There are no guarantees written into the law that assure a certain percentage of the development will benefit indigenous or low-income people.
In San Francisco, low-income TIFs have generated $40-45 million in affordable housing production in the last five years. Only not-for-profit CDCs are eligible to use this source of financing.
Chicago Examples: Last year, the City of Chicago used, for the first
time, a low-income TIF to create 96 units of low-income housing. Other
TIFs, such as the $104 million one implemented in the South Loop
contain no guarantees that existing or low-income residents will
benefit.
Through these policies, property owners who plan to sell their property must first offer to sell it to tenants or community development corporations. A "right of first refusal" policy that would cover all private market buildings in gentrifying neighborhoods has not been implemented anywhere in the country. Even in Seattle, where activists suggest the use of these policies to fight displacement, private market interests are likely to block any attempt to create ordinances along these lines.
Some government-supported mortgages, though, provide an important opportunity to implement "right of first refusal" plans. Many properties, for example, were provided low-interest mortgages by HUD in the 1970's. The mortgages are now eligible under their original terms to be payed off, which would free the owners to gentrify the properties if they wish. The Organization of the Northeast led a fight in Chicago which assured that tenants of an Uptown apartment building received the right of first refusal. The tenants now manage the building.
Mortgages held by Freddie Mac may provide a similar opportunity. Northwest Bronx Committee and Clergy (NBCC) in New York is currently fighting Freddie Mac to force the mortgager to more carefully review the mortgages it provides to discourage speculation. NBCC argues that many of the mortgages Freddie Mac provided in their neighborhood were over-priced and therefore encouraged both speculation and mortgage default. NBCC is not fighting for Freddie Mac to implement "right of first refusal" policies in properties that default, but the experience of community organizations on the HUD properties suggests the use of these policies as a potentially effective solution.
Chicago Examples:
Property owners who choose to convert a rental building into a
condominium must grant tenants the right of first refusal to purchase
their units. (See strategy # 14 on Condominium Conversions.) Chicago's
Bickerdike Redevelopment Corporation, a nonprofit corporation, uses a
version of right of first refusal to assure that properties they
develop do not facilitate gentrification in the neighborhood.
Individuals who purchase a single family home developed by BRC must
sign a re-purchase agreement which requires them to sell the property
back to BRC if they wish to sell in the first 10-15 years. If they
chose to sell within this time frame, they must accept an annual
appreciation rate of no more than 5% annually.
In all major cities surveyed, residents and local community organizations have had to fight to assure that their concerns would be considered before development progressed. In Atlanta, the only anti-displacement strategy local activists can report are settlements that developers have negotiated with community residents when a large project causes significant, direct displacement. The building of the Olympic stadium, for example, caused 50 homes to be destroyed. The local community negotiated for 75 replacement homes to be built. Clearly, though, such settlements hardly constitute an anti-displacement policy. Some activists argue that when major developments such as stadiums or university expansions are proposed, city government should refuse any support until the developer reaches an agreement with the community.
Effective organizing is clearly needed if such planning is to become reality. The Council of Community Housing Organizations in San Francisco, whose member groups now own as many rental housing units as the local housing authority, see the organization of tenants as key to their overall efforts to place neighborhood planning in the control of local residents. CCHO was able to gain enough control of the local planning and development agency, so that their members had oversight on planning decisions in particular neighborhoods. Community groups in all other cities surveyed do not have such power.
Planning decisions in Redevelopment Areas in Chicago are currently
overseen by a mayor-appointed board of commissioners, none of whom are
low-income residents of neighborhoods burdened by displacement. There
is no formalized process which provides local neighborhoods with the
power to determine the course of planning in their area.
These programs, currently popular, provide education and economic support which helps lower income families to purchase their own homes. Subsidies are provided through a variety of means, including directly subsidizing purchase prices, waiving certain development fees, and limiting down payments. Some for-profit banks, in addition to city administrations and not-for-profits, have initiated programs along these lines.
Chicago Examples: The New Homes for Chicago Program
operated by the City's Department of Housing provides $20,000 purchase
subsidies and fee waivers to buyers who earn up to 115% of the city's
median income. Nonprofit CDCs which develop New Homes for Chicago may
choose to lower the income standard. In 1994, the program funded the
construction of 92 new units.
In the city of St. Petersburg, Russia, the city administration has
set up a registration of all homeless people so that it can have a
better idea of the housing shortages for all individuals and families
in need.
In the city of Berlin, Germany, a non profit group called
S.T.E.R.N. which stands for Careful Urban Planning is one of the main
contractors of the Berlin Senate to work with tenants in districts
which are experiencing reinvestment and displacement. The Berlin
Senate pays S.T.ER.N. to hire advocates and advisors to work with the
tenants. These advisors inform the tenants of their rights and assist
them in negotiations with the developers and owners of buildings in the
area.
Also in Berlin, there is a program which S.T.E.R.N. developed with tenants which allows tenants to make their own improvements to their apartments. The tenant is involved in the assessment of what he/she wants improved in their apartments. The program first requires the approval of the owner of the building.
Chicago Examples: Tenants are allowed under the law to make repairs in their apartment and then deduct the cost of these repairs from their next month's rent. To do so, a tenant must first provide written notice of their intention to their landlord and allow the landlord 14 days to complete the repair. Also, there is an expense cap which limits the amount which can be deducted in this manner. Until recently, the cap was $200 per month. Thanks to the efforts of local tenants groups the cap has been extended to $500 per month.
To illustrate how some of the strategies in the previous section have been used by different community groups in Chicago to fight displacement, we offer the following case studies.
West Town is a community on Chicago's northwest side which is 62%
Latino, 28% White and 9% African-American. There are 34,368 total
units and 65% of the units are renter-occupied. There are 44% of the
renters paying more than 35% of their income for housing. The 1989
household median income is $19,236. This means that half of the
households make less than this amount. West Town's median value for
single family owner-occupied homes increased 211% from 1980 to 1990.
This is in the top five of Chicago community areas which experienced
increased value over 200%. These escalating home prices are due to a
number of factors. First of all, West Town is in close proximity to
the downtown area with excellent public transportation and high way
access. Rising housing prices to the east in areas like Lincoln Park
and the Near North have driven many buyers further west. The housing
stock in West Town is very sound with attractive Victorian features and
there is enough racial and economic diversity to make many investors
feel comfortable.
In addition, West Town has a history of being a well organized
community which has curtailed deterioration in the area. Association
House and Erie House are two social service agencies that have been
part of the neighborhood since the turn of the century. Community
residents came together and formed the Northwest Community Organization
(NCO) in 1962 which operated strongly until a few years ago. A number
of churches in the area also formed the Center for Community
Development and Leadership. Several community development
corporations are established in the area including the Bickerdike
Redevelopment Corporation, LUCHA, and Hispanic Housing. For the most
part, these CDCs develop and manage affordable housing units in the
area. All of these mentioned organizations are committed to improving
and developing the area without displacing the current residents. In
contrast, there is also an organization of residents who are committed
to improving the area but without this concern for existing residents.
This organization, The Old Wicker Park Committee (OWPC), has been very
aggressive about opposing publicly subsidized affordable housing in the
area. According to the most recent numbers compiled by Latinos United,
UIC Voorhees Neighborhood Center and the Statewide Housing Action
Coalition, there are presently 3,447 units of publicly subsidized
housing in the West Town community. This is 10% of the total housing
units.
Over the years the West Town residents and its organizations have used a variety of strategies to improve the area without displacement. First and foremost, the West Town residents have maintained a number of organizations which facilitated bringing residents together to discuss the future of the neighborhood. Being a well organized community has helped residents resist the many threats of displacement despite the rising home values. The following are a listing of the strategies used in West Town.
In the sixties, NCO worked with community residents to use
federally subsidized mortgages to buy single family homes in the area.
NCO worked with 100 families to become home owners. More recently,
local CDCs are working with the City of Chicago's New Homes for Chicago
program to build new single family homes in the area and market them to
local residents.
There are several CDCs working to provide affordable rental units for
residents. These CDCs have boards controlled by community residents.
These CDCs have used a number of federal financing strategies like
Section 8 project based developments, tax credits, Community
Development Block Grant (CDBG) and HOME dollars to develop quality
units and rent them at levels affordable to the local residents.
Through several decades of doing development in the community the CDCs
have accumulated several thousand units of housing. This housing is
controlled by the community through the CDCs and is using federal
dollars to preserve and keep these units out of the private market.
Many of these developments consequently are providing rent subsidies to
residents.
There is a limited equity cooperative, Noble Square, in the area which
was converted by the residents from a federally subsidized rental
development to a cooperative . It is 482 units. In 1991, Bickerdike
Redevelopment Corporation worked with the residents in one of their 51
unit developments to establish a limited equity cooperative. More
recently, Erie House has organized a group of residents interested in
working together to develop a limited equity scattered site cooperative
development. It is being planned for 40 units on scattered sites
throughout the community. The land targeted for this development is a
combination of city owned and privately owned property. Erie House
would like the city to donate the land or discount the price so that
the cost of the development can be kept as low as possible. Erie House
is working with BRC to accomplish this cooperative development. They
have met with some resistance from new investor residents. In the
February, 1995, primary elections a referendum was put on the ballot to
stop the development. Erie House and its supporters worked hard to
promote and educate the voters as to the purpose of their development.
The referendum was lost by the opponents of the cooperative
development.
As part of its organizing efforts over the years, the residents and organizations of West Town have also seen the importance of having a plan and vision for their community. Over the years they have completed numerous plans and studies to assist them in their efforts to improve their community. Most notably, in 1973-75, NCO sponsored a comprehensive plan for the area which is still used to measure success and progress. A newly formed community coalition is currently undertaking another comprehensive planning effort.
Despite the efforts of residents and organizations, West Town continues to have housing and other problems. As many as 40% of the households are making less than $15,000 a year which makes it difficult for households to afford decent housing and address their other needs. There are still over 3,000 vacant lots in the neighborhood and over 700 buildings in housing court for city code violations. The age of the housing stock also creates problems with lead poisoning cases which is shown in the over 1,200 reported cases in children under 5 years.
But at the same time that many of the residents are struggling to
afford the area there are a number of households moving into the area
which have the income and resources to fix up the housing. There are
10.9% of the households making more than $50,000 a year. The presence
of these higher income households has created conflicts about West
Town's future. Clearly, through the actions of the OWPC and the groups
who supported the referendum against the cooperative there are many
residents who want the area to have less poor people. Even many
housing activists are saying that West Town is "saturated" with
subsidized housing. What is this saturation point? As the numbers
show, approximately 10% of the housing units in West Town have some
sort of government subsidy.
South Armour is a community located just south of the new Comiskey Park, home of the Chicago White Sox. It is a small community of 1,500 residents, all African-American, who either live in the Wentworth Gardens public housing development or the TE Brown Senior Citizen building. TE Brown is a federally subsidized 202 development owned and operated by the Progressive Baptist Church. The median 1989 income is very low, less than $7,000, because most of the households receive public aid or social security. 82% of the households are headed by women. Many of these households are older women living alone; 43% of the population are over 55 years old and more than a quarter are over 65 years old.
Back in 1987, residents of South Armour formed an organization to fight the relocation of Comiskey Park. For two years the residents organized and attempted to negotiate with the City of Chicago, White Sox and the Illinois Sports Facility Authority to modify their plans for the new stadium so that housing and stores in the South Armour community would not be destroyed. Despite their efforts, Comiskey Park was relocated directly south of its previous location and the South Armour community lost 178 privately owned housing units and a 12 community businesses. As a result of community action, the homeowners and businesses were offered an agreement to select among three options. This offer was made and negotiated by the Illinois Sports Facility Authority (ISFA) which is a government body set up to own and operate the new Comiskey Park. Appointments to ISFA are made by the governor and the mayor.
The ISFA offered a settlement to owners and renters based on a supplemental appropriation from the State whose original appropriation contained no provisions for resident relocation. The homeowners negotiated a settlement plan with ISFA. The first option consisted of a cash settlement for the house amounting to the appraised market value plus a $25,000 incentive payment. The second option involved the relocation of the house to another site and a $2,500 cash settlement. The third option provided a new house or two flat, paid for by ISFA, that would cost the homeowner no more than his or her old mortgage payment or nothing if the mortgage had already been paid off. Renters were offered a cash settlement of $4,500, relocation assistance, and a moving allowance of $500. Under the "quick take" powers given to ISFA, the homeowners, renters and businesses had to enter into a contractual agreement with ISFA by September 15, 1988 in order to receive relocation assistance. If agreements were not reached by October 15, 1988, ISFA had the authority to take title to the property and negotiate compensation later. Most of the homeowners and renters settled before September 15th but a number of the businesses went to court to fight for additional compensation for their properties. All of the properties were vacated by March of 1989 to make way for the bulldozers.
When the leadership of the homeowners and businesses decided to settle
with the ISFA, this split the community. Most of the homeowners formed
another group to negotiate with the ISFA while other residents, mostly
from Wentworth Gardens and TE Brown continued to fight the relocation
of the stadium. After two years of organizing and attempting to
negotiate with ISFA to modify the site plan and respond to the demands
of the residents who were going to have to live with the stadium on
their doorstep, the residents filed a federal lawsuit on February 9,
1989. The law suit has 49 plaintiffs from the neighborhood and charges
that the stadium site was selected in violation of the civil rights of
the members of the community. The court case is still pending.
In this uphill battle to save their neighborhood the South Armour residents used several strategies.
The South Armour residents had numerous demonstrations at the old
stadium during the baseball season, at City Hall, and at the offices of
the ISFA. They also testified at the Chicago Plan Commission hearings
and at ISFA Board meetings. One memorable community meeting was when
the residents held a mock funeral for the community at the local
school. Many residents testified at the mock funeral and told their
stories about growing up, raising families and making friends over the
years in the South Armour community. A letter campaign was also
organized to build support from other community groups from across the
city to stop the relocation.
Due to the efforts of the South Armour residents organizing to bring
attention to the unfairness of the "quick take" powers delegated to the
ISFA and the lack of notice and due process to the residents who were
going to be displaced, an additional $10 million was added to the ISFA
budget for relocation benefits.
When it was clear that the organizing and demonstrations were not going
to change the minds of the Mayor, White Sox, Governor and ISFA Board
members, the residents decided to file a law suit. The suit was filed
initially to stop the destruction of the houses and businesses. Once
the demolition was completed, however, the suit was about reparations
and the rebuilding of the community.
The case presents the argument that the relocation of the stadium to
the north would have caused less displacement of homes and businesses.
However, relocating the stadium to the north would have meant the
displacement of white families. The case is still pending in federal
court. The community residents filed the law suit to protect their
rights as residents of a community under attack from government and the
private sector. For many community organizers filing a lawsuit is a
strategy of last resort. It was also here. However, it is hoped by the
residents to use this strategy to call attention to the injustice of
what happened to them and to use the court case as a way to keep the
community together in a rebuilding effort. The pending law suit
undertaken by the South Armour community highlights the importance of
community residents to have some control over the physical development
of their community. Despite the formidable opponents of the White Sox
Corporation, City of Chicago, and the State of Illinois, the residents
of South Armour are fighting for their right and the right of all
community residents to have a say over their physical environment.
Throughout the organizing efforts to save the community , South Armour residents did a number of planning projects to help them strategize about the future of the area. In 1988, the community residents worked with the UIC Voorhees Neighborhood Center to do a strategy plan for the area given all the possible scenarios of change. This strategy plan led the residents to a decision to apply for a community planning grant from the City of Chicago to prepare a study for a commercial shopping center for the area. This proposed shopping center is meant to replace the stores that were displaced by the new stadium. The feasibility study was completed in December, 1994, and the residents are now preparing to assemble a development team to assist them in the implementation of this development.
When the South Armour community found out that their area was targeted for displacement for the new White Sox Comiskey Park, it was a community of working class African-American families, public housing residents, and Senior Citizens. It was a community in which for many years, the residents had created an atmosphere of security and trust among these different income and age groups. When the seniors found out that the homes adjacent to their senior housing development would be torn down many of them worried about who would watch out for them as they made their way to the bus stop to go shopping downtown or to the doctor. It was a close knit community that unraveled under the pressures of the many powerful interests in government and the private sector who wanted their land. There is only so long that a community can stay together when government uses its powers like "quick take" and eminent domain to take over a community. In addition, offering the property owners the options under a very tight deadline split the community. The property owners became frightened that they would lose everything if they did not negotiate within the designated time frame.
This case illustrates the divisions in our society that exist among
property owners, renters, public and subsidized housing residents.
Eventually, ISFA realized it had to offer some deal to the owners in
respect for their property rights. Renters were treated as lesser
citizens and the rights of the public housing and residents of
subsidized senior housing were ignored. It is these latter two groups,
however, who have had to deal with the traffic jams, parking and
exploding scoreboard of the new stadium.
Pilsen is located on the lower west side of Chicago, just south of the University of Illinois at Chicago campus. The population is 45,654, with 88% Latino, predominantly of Mexican heritage. There are 12,340 households and 35% of these households make less than $15,000 a year. The median income is $20,571 compared to the city's median, $26,301. 8.4% of the households make over $50,000 a year. Pilsen is home to some of the oldest housing in the city. Many of the buildings are over 100 years old and date back to before the Chicago 1877 Fire. The area suffers from overcrowding. There is 28% of the units that have more than one person per room compared to the City's, 8.8%. Also, 65% of the units are renter-occupied. Pilsen has a large network of community organizations, social service agencies, churches and schools. Pilsen is a well organized community which has taken the lead in many community improvement efforts. Such as, parents in Pilsen were leaders in the School Reform movement and also played a role in instituting Community Policing in Chicago.
There are two CDCs operating in Pilsen. Eighteenth Street Development Corporation specializes in commercial and industrial development but also has done some housing development. Up to a few years ago, it had the oldest and most highly respected construction training program in the city. The Resurrection Project (TRP) is a church based development group which has built nearly 100 units of new housing in the area. This housing was built through the New Homes for Chicago program which is a home ownership program. TRP is involved in other issues besides housing development. In 1994, it opened up a family center which provides 180 children with day care. Residents from the community were trained to be the day care workers for this new center.
Pilsen is located within one mile of the downtown area and also within
a few blocks of the University of Illinois at Chicago campus. This has
created some development pressures on the area. In addition, there is
a local private developer in the area who owns large numbers of housing
units mostly in the east side of the neighborhood. This developer
rehabs the buildings and markets the units to artists and
professionals. With the escalating cost of lofts and apartments on the
north side, Pilsen has been seen as a more attractive area to many
urban professionals and artists. Development pressures have also
increased in the last year because the university bought and cleared
the Maxwell Street area which previously had been a buffer area between
Pilsen and the university. Now, the university owns and controls the
property right up to 16th Street. This is Pilsen's northern boundary.
The South Loop development of upscale housing has also reached 16th
Street at Pilsen's eastern boundary.. There is also speculation that
if Chicago is given permission from the state legislature to have a
casino development, one of the most likely casino sites will be
directly east of Pilsen along the Chicago River.
Since the seventies, Pilsen has been under development pressures from the north from the University of Illinois at Chicago's expansion plans and on the east from the South Loop development. As a consequence community groups in Pilsen have tried a number of strategies to preserve the neighborhood as an affordable and decent place to live for the present residents.
Pilsen residents and organizations have often been active participants
in coalitions to resist displacement and redevelopment schemes from
outside the area. In the sixties, Pilsen Neighbors Community Council
resisted Pilsen being designated an urban renewal area. In the
seventies, Pilsen groups like Casa Aztlan and El Centro de la Causa
played an active role in the Coalition of Central Area Communities to
demand citizen participation in the Chicago 21 Plan. This was a master
plan co-sponsored by the City of Chicago and the Central Area Committee
of downtown corporations. In the eighties, Pilsen groups were part of
the Chicago 1992 Committee which stopped the plans for the 1992 World's
Fair because there was no community participation in its planning. So,
going back to the sixties, Pilsen has developed a reputation as a
community which will organize quickly to protect the rights of its
residents.
In 1975, in response to the Chicago 21 Master Plan, Pilsen groups
coordinated by Pilsen Neighbors Community Council, prepared a
comprehensive plan for the area. Eighteenth Street Development
Corporation (ESDC) was one of the many results of this planning
process. Since that time, ESDC has sponsored several planning efforts
to improve the industrial, commercial and residential areas. Most
recently, the many groups in Pilsen came together to plan and put
together a proposal for the 1994 Empowerment Zone designation. Pilsen
has been designated part of the Empowerment Zone in Chicago and the
successful planning efforts of the groups made this happen.
The CDCs in Pilsen have been aggressively pursuing this strategy for
the last few years. The Resurrection Project (TRP) has built nearly
100 single family and two flats in Pilsen through the New Homes for
Chicago program. Likewise, ESDC and Pilsen Neighbors have also used
this program to develop new townhouses and single family homes for
purchase. All of the CDCs have targeted their marketing of these units
to local residents. TRP offers housing services to residents
interested in becoming home owners and assists residents in this
process.
In the early seventies, the Brown Berets, a Chicano Nationalist group, took over one of the settlement houses in the community and renamed it Casa Aztlan. Casa Aztlan became a cultural center which housed the muralist movement through the seventies and eighties. Artists based at Casa Aztlan painted many murals depicting the cultural and historical significance of the Mexican people that are found throughout the community. In 1987, the Mexican Fine Arts Museum was established on the west side of the neighborhood. This museum has gained a national reputation for its exhibits and cultural events. The museum has become a important part of the community's identity.
Despite the strong community identity, presence of community
organizations and other institutions, there are a number of conflicts
and problems that still need to be addressed. The age of the housing
stock is a serious problem which means that many of the residents live
in substandard conditions. While the yearly loss of housing stock is
smaller compared to other communities, any loss exacerbates the already
overcrowded conditions in the area. Unemployment and underemployment
are pervasive, especially among the youth. The high school drop-out
rate at the local high school is near 50%. There is a great deal of
competition for land in the neighborhood. Most of the city owned empty
lots have been designated for the New Homes for Chicago program. There
is a need for land to be used for recreational purposes because the
park land is very inadequate compared to other neighborhoods and
national standards. This competition for land puts pressure on the
industrial area where there is large vacant properties. However, there
is a need to preserve the industrial area for job-producing uses.
The South Loop was one of the first areas of Chicago to experience the
urban cycle of prosperity, decline and renewal. The historical
landscape of the area is being transformed, shaped by Chicago's
transition from an industrial to a post-industrial, service oriented
economy. Abandoned warehouses that serviced the Loop are being
converted to upscale condominiums and vacant railroad yards, once the
lifeline of the city, have been transformed into secluded upscale
residential communities. This recent surge of private development has
exacerbated existing racial and income segregation patterns, with
public housing concentrated to the south (Hilliard Homes and Ickes) and
upscale homes concentrated to the north. For example, the population
of the census tract that includes Hilliard Homes at Cermak and State
Street, is 93% African American with 65% of the households with incomes
below the poverty line according to the 1990 census. While the median
family income in the Loop was $71,525 (an increase of 54% since 1980),
the median income in the Near South Side was only $7,576 (a decrease of
41% since 1980).
City politicians, planners and developers, motivated by revitalizing the central city and increasing the tax base of the city, first envisioned the development of a residential community geared toward middle and upper income professionals working downtown on vacant railroad land in the Central Area Plan in 1958 and the Chicago 21 Plan in 1973. Beginning in the early 1980's private developers aided by public subsidies for infrastructure improvement have realized these plans. Over 1,400 single family homes and town homes make up the suburban-like enclaves of Dearborn Park Phase I and II.
To further stimulate the redevelopment of the South Loop, the City of
Chicago in April of 1990 passed a tax-increment financing ordinance to
aid the private development of Central Station. Burnham Place, now
home to Mayor Daley, was the first residential phase of this 72-acre
mixed-use development plan, adding nearly 200 homes and infrastructure
to this former railroad land. Again in August of 1994, this TIF
district was expanded to stretch west to State Street, north to
Congress and south to Cermak, making up to $105 million in
city-guaranteed bonds available for area improvements.
Currently a community struggle is taking place over the development of the South Loop. Since the late 1980's the Chicago Affordable Housing Coalition (CAHC) and the Chicago Coalition for the Homeless (CCH) have targeted the area to demand that scarce public resources be directed to low-income communities as opposed to subsidizing the profits of private developers. CAHC through a direct action campaign did apply pressure so that the city in its first TIF agreement required the developer of Central Station to develop 20 percent of the housing units for low and moderate income residents. However, no affordable units have been developed to date.
Since the expansion of the Central Station tax increment financing district in 1994, this community struggle has evolved into the "South Loop Campaign for Development without Displacement" spearheaded by the CCH and CAHC. The campaign is focussed on ensuring that the public resources are directed toward preserving the area as a mixed-income community so that current low and moderate-income residents and businesses share in the benefits of the redevelopment and are not forced out of the community due to rising land costs. The campaign includes the following economic development and housing goals:
The campaign has employed many strategies in order to pursuit the above goals:
The Campaign has consistently and successfully used direct actions such
as rallies, and marches targeting the Mayor's office with strategic use
of media to communicate their demands to a larger audience and raise
the political stakes. Leading up to the 1995 mayoral elections, weekly
vigils outside the Mayor's home in the Central Station development and
a rally at City Hall initiated a series of negotiation meetings with
City officials, which are currently underway.
In response to the lack of community input into the planning of the TIF
district, the South Loop Campaign initiated a community planning
process in the fall of 1994 to counter the one-sided private
development forces now dominating the area. A series of outreach
activities to community groups including tenant organizations,
churches, the South Loop School, and businesses culminated in a
community planning forum in January 1995 attended by over 70 people.
Working groups who focused on housing, jobs and economic development,
community services, and schools came up with recommendations that
supported maintaining and preserving the ethnic, economic, social and
physical diversity of the area. One of the recommendations was to
develop a democratic community organization to provide the basis to
implement and expand upon the ideas from the day.
One of the focal points of the campaign has been the struggle over the
destiny of the existing Single Room Occupancy (SRO) Hotels. Over the
last three decades there has been a dramatic loss in the number of SRO
hotel units, which have traditionally provided permanent housing for
low wage workers and pensioners. Currently over 700 SRO units remain
in the area, down from 4,000 units in 1961.
Recently, a local development corporation made up of local churches submitted a proposal for funding to the city to rehab one of these SRO's, the St. James Hotel, located between the upscale developments of Central Station and Dearborn Park at Wabash and Roosevelt. Despite the project's wide community support which even included the Near South Planning Board, the city rejected the proposal and plans to raze the building to make way for commercial development as part of the TIF redevelopment plans, motivated by the "highest and best use" of the land.
Although the struggle over the future of the existing SRO continues, Lakefront SRO is making plans for new construction of a SRO Hotel in the South Loop, with the support of City financing.
The turf battle waging in the South Loop raises tensions between class
interests and familiar debates of urban renewal or urban removal. The
city's planning efforts dating back to the 1957 development plan have
been directed and implemented by business and real estate interests
with the financial backing of government and have done little or
nothing to protect the interests of current small businesses and
low-income residents. The strong market forces of gentrification
raging in the South Loop, the City's lack of commitment to affordable
housing in the area, and the opposition of the many middle and upper
income residents of Dearborn Park and Central Station to low-income
housing present many challenges to preserving a mixed economic and
racial community. Due to these challenges, it will continue to be
important for the Campaign to build broad-based support locally and
city-wide and to continue a direct action campaign.
The Near West Side is located directly west of the downtown area. The smaller area we are focusing on for this case study is the neighborhood surrounding the new United Center, home of the Chicago Bulls and Blackhawks. Its boundaries are Kinzie to the north, Ashland to the east, VanBuren to the south, and Western Avenue to the west. The population of the area is 8,937, 99% African-American. This part of the Near West Side has not yet recovered from the 1968 uprisings following the assassination of Martin Luther King. Much of the community is blocks and blocks of vacant land. There are, however, blocks of very solid brick two and three flats throughout the community. The residents who have remained are long time residents who are very committed to staying in the area. 60% of the residents have lived in the area for more than 10 years.
The Henry Horner Homes, a large public housing development, is part of the Near West Side community. There are 1,761 housing units in Henry Horner but only 899 units are leased. The rest of the units are boarded up and vacant. The 899 occupied units are 27% of the households in the area. In addition, there are two Section 8 housing developments that were built in the late seventies and early eighties which are on the southern edge of the community. These two developments house 800 families and senior citizens. The median income of the area is very low, $5,484 due to the fact that many of the families are on public assistance or social security.
The largest landmark is the Chicago Stadium. The stadium has played an important part in efforts to rebuild the community. When the owners of the Chicago Stadium made plans to build a new stadium in the community, the churches in the area led an organizing effort which resulted in an agreement with the owners to not only build a new stadium but to assist the community in its total renewal.
The Interfaith Organizing Project led the organizing and successful negotiations with the owners of the Chicago Stadium. They supported the homeowners in their negotiations to have replacement homes rebuilt in the community and they worked to make sure residents got jobs during the construction of the stadium. IOP also formed a community development corporation to spearhead the redevelopment. The CDC, The Near West Development Corporation was incorporated in 1993. The CDC assisted in the building of the replacement units for residents displaced by the stadium, recently completed a 16 unit rental apartment building, and is planning to build 75 new two flats in the next few years. The NWSDC is also making plans to do commercial development along Madison Avenue. Members of the NWSDC worked to locate Argo Bank in a temporary building on Madison Avenue and are planning to have the bank anchor a shopping center development in the next few years.
While the residents who live in the privately owned buildings in the area have been negotiating with the owners of the Chicago Stadium for redevelopment of the area, the residents of Henry Horner have also been organizing and negotiating with the Chicago Housing Authority about the future improvement and redevelopment of Henry Horner. In 1991, a group of Henry Horner residents filed a law suit against CHA and the federal department of Housing and Urban Development to call attention to and remedy the poor conditions and mismanagement of the Horner buildings. This law suit has played an important role in giving the tenants leverage with CHA in their redevelopment of the buildings. CHA has applied for federal monies to tear down two of the Horner buildings and rehab units in two other buildings. Because of the law suit, Horner residents have been able to negotiate with the CHA to have each resident polled as to whether they want to stay in the area, move to another CHA development or receive a Section 8 voucher. As part of the negotiations, the CHA is planning to build 280 new housing units within the Near West Side to replace some of the units being torn down. A resident oversight committee will be established to insure CHA residents will have input into decisions that affect their lives. According to the Legal Assistance Foundation attorney, William Wilen, who represented the tenants in the law suit, "Residents will have veto power over each and every phase of the plan."
In addition to all these changes and redevelopment, the new stadium,
the United Center, is going to be the site for the Democratic Party
convention in 1996. The City has set up several task forces to work
on improving the area before the convention. These efforts have
concentrated public resources but also increase development pressures
on the area.
The Interfaith Organizing Project with other community groups in the
area organized and led a very successful campaign of demonstrations,
community meetings, and negotiations to make sure residents had a say
in the future of the area and were given the option to have their homes
rebuilt in the area.
When the Near West Side residents began negotiating first with the
Chicago Bears and later with the Wirtz family who owned the Chicago
Stadium, they realized that they needed a community plan to counteract
any plans or projects that these outside interests had in mind for
their community. Consequently, the Near West Side went to the City of
Chicago as part of its organizing efforts and asked for and received a
planning grant to do a comprehensive plan. This plan has been updated
and is used by the CDC and other community groups as a blueprint to
assess programs and projects as they are presented to the community by
the City or other developers.
The Henry Horner Mother's Guild, a group of women who lived in the
Henry Horner Annex, filed a law suit in 1991 with the assistance of the
Legal Assistance Foundation. This law suit was initially filed to
bring attention to the fact that the CHA was the worst slum landlord in
Chicago. But, as things developed since 1991, the law suit has given
the Horner residents leverage in deciding the future of the whole
Horner redevelopment under the leadership of CHA President Vince Lane.
The Near West Side Development Corporation has developed a 16 unit rental property near Adams and Hamilton. The area is 31% vacant land. Most of this land is city owned. The NWSDC is negotiating with the City to transfer ownership of much of the city owned property to the CDC in order for the CDC to have more control over the area's development.
For the last few years the Near West Side has been under a great deal
of development pressure. First starting with the failed attempt of the
Bears to build a stadium there, later with the relocation of the
Chicago Stadium and more recently with the plans to redevelop the Henry
Horner Homes and the coming of the Democratic Convention in 1996.
Thus far, community residents have held together. But any community
under this much development pressure over time will experience some
divisions within the community. Recent meetings concerning the
redevelopment of Henry Horner and the possibility of as many as 280 new
scattered site units being located within the Near West Side area have
raised concerns among some property owners in the area. The planning
and management of these scattered site units with community
participation and control will be very important to the success of this
effort.
The City of Chicago Department of Planning and Development should work
with the NWSDC and other area community groups to develop a model in
the Near West Side for community participation and control in planning
and development. The history of the Near West Side's efforts in
organizing and planning is most similar to the experiences and work of
the Dudley Street Initiative in Boston. In Boston, the local
community group shares eminent domain power with the City of Boston and
the state government. It is recommended that the Near West Side as it
was the first Strategic Neighborhood Action Project (SNAP) continue to
be the area where new ideas and programs are initiated to foster
neighborhood improvement and community participation and control to
maximize success.