Chicago’s Anti-Gentrification Laws Could be Delayed

Alderman Carlos Ramirez-Rosa is pushing to delay enforcement of an anti-gentrification ordinance designed to protect renters across vulnerable Chicago neighborhoods.

Ramirez-Rosa wants to begin implementation of the Tenant Opportunity to Purchase program in March to give stakeholders time to fully understand the program’s mechanics, Crain’s reported.

The alderman’s proposal will also include amendments aimed at ensuring fairness for tenants and property sellers.

The Northwest Side Housing Preservation Ordinance was approved in September and is meant to protect renters from displacement due to accelerating gentrification in neighborhoods like Humboldt Park, West Town, Logan Square, Avondale and Pilsen.

A key element of the ordinance is a provision that gives tenants the right to buy their buildings before they are sold to other buyers.

Some elements of the ordinance, including higher demolition fees for multi-unit buildings, went into effect on October 9. Enforcement of the right-of-first-refusal provision had been delayed until Nov. 29.

The alderman’s decision to push the start date back another three months comes in response to concerns from tenant advocates and real estate professionals, who have raised questions about the ordinance’s potential unintended consequences.

The changes to the ordinance include a requirement for tenants to prove they are financially capable of purchasing the property. For smaller buildings with 1 to 4 units, tenants must provide a mortgage pre-approval letter, while larger buildings will require a letter of intent from a lender. That could ensure tenants are not using the ordinance as a way to stall the sales process, as some in the real estate industry feared.

The proposal also offers tenants a second chance to purchase the property if the price drops by 10 percent or more after their initial decision.

A third proposal calls for the program to run for a limited time, from March 2025 to December 2029, during which the city will study its impacts before any further decisions are made.

— Andrew Terrell