With no discussion, Chicago City Council passed a far-reaching anti-gentrification ordinance for Chicago’s South Shore and Woodlawn neighborhoods Thursday evening, giving tenants the controversial right of first refusal to buy their buildings and establishing requirements for “just cause” evictions when a building owner plans to sell.
The proposal, known as the Jackson Park Housing Pilot Ordinance, was led by 5th Ward Alderman Desmon Yancy and passed despite prior attempts to enact a similar measure stalling for nearly two years.
Its similarities to another hotly-debated anti-gentrification effort, known as the Northwest Housing Preservation Ordinance, prompted pushback from the real estate industry.
“The Jackson Park Housing Pilot Ordinance contains hazardous housing policy that could deter much-needed investment, worsen the affordability crisis, and ultimately harm the very tenants it claims to help,” said Jon Kozlowski, Government Affairs Director for the Chicagoland Apartment Association. “This updated proposal was rushed forward with little input from those who actually provide housing for working families and without careful scrutiny such a sweeping measure deserves.”
The new version of the ordinance includes some key differences that are helpful to the real estate industry and others that are not.
Losses for the industry:
- The new ordinance gives tenants the right of first refusal to purchase properties when their landlords look to sell, which was a feature of the Northwest anti-gentrification effort that has been sharply criticized by the industry for hampering multifamily properties’ resale values.
- Tenants have a longer timeline to close on a building purchase under the new version of the ordinance’s right of first refusal provision. Instead of being given 120 days to close, tenants are given 180 days to close.
Wins for the industry:
- The new ordinance limits the right of first refusal to buildings with 10 or more units.
- The original ordinance stated that landlords in South Shore could not evict tenants for any reason other than “just cause,” which is defined as a breach of a lease agreement or illegal activity. The new ordinance only places that restriction on landlords while they are trying to sell a building, presumably to stop a landlord from evicting tenants before they have time to form a tenants union.
- The new ordinance removes a provision that states landlords must reimburse the city for relocation assistance provided to tenants under certain circumstances.
- The new ordinance does not place limits on lease application fees and other moving fees charged by landlords.
During a committee meeting to discuss the ordinance held Wednesday, aldermen expressed support for the measure, citing the impending opening of the Obama Presidential Library as a harbinger of change. Johnson echoed those statements after the full council meeting.
“This ordinance is a meaningful step in our mission to grow our city’s housing supply while
increasing affordability in our neighborhoods,” Mayor Brandon Johnson said in a Sept. 25 statement.
Median rent in the pilot area since 2015 has increased by 43 percent, while home values have risen by 130 percent, according to the city.
Other provisions in the ordinance increased funding for initiatives like property tax debt relief and programs aimed at reducing costs of rehabilitating residential properties.
Chicago City Council’s Committee on Housing and Real Estate voted unanimously to approve the South Shore ordinance Wednesday, in a process that industry lobbying group Neighborhood Building Owners Alliance of Chicago accused of being rushed through the system because it was posted publicly for the first time the day before a Sept. 24 housing committee meeting, which was also during the Jewish high holiday Rosh Hashanah.