With the cost to buy and own a home rising rapidly in Chicago, some residents see developers and real estate brokers as the enemy. But the true picture is much more nuanced than that.
Indeed, it turns out there are ways for development to happen without displacement and for neighborhoods to be improved in a way that benefits everyone.
How gentrification works, and how it doesn’t
Since the turn of the century, Chicago has seen steadily increasing demand for high-amenity areas downtown, leading to increasing rents throughout all centrally located neighborhoods. As a result of rising housing costs, driven by wealthy consumers in desirable spots like Chicago’s Gold Coast and West Loop, lower-income renters have been priced out and forced to relocate — a process known as displacement. Real changes in the ethnic makeup, zoning, architecture and housing stock occurred as a result. Communities are uprooted, and real estate development becomes politicized.
One thing is certain: No agent wants to find themselves on the front lines of this acrimonious battle. Gentrification and displacement are painful for nearly everyone involved, and vulnerable populations suffer the most. In recent years, Chicago has seen a rising tide of community organizations advocating for policy fixes like rent control to ensure affordability.
Gentrifying communities like Pilsen and Humboldt Park have seen frequent protests pitting residents against developers and, at times, elected officials. It can feel like an impossible situation, and there are no quick fixes.
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While it can be a painful subject, there’s nothing gained by ignoring it. “Gentrification is not new to Chicago,” said Dalia Cajigas, a broker with RE/MAX CityView. “We do need to adapt to change. But with that said, we really need to listen to the concerns of residents who have been living in neighborhoods for decades. We must learn from the past in order to improve our neighborhoods and work together to maintain future stability.”
In a 2019 white paper, researchers from the Becker Friedman Institute for Economics at the University of Chicago examined the impact of more than 30 years of gentrification on downtown neighborhoods in the U.S. They describe an overall “rebirth of downtown American cities in recent decades [which] has turned neighborhoods that formally housed lower-income families […] into thriving high-end residential spaces.” They also found that “the increase in downtown housing prices has driven poorer households out of downtowns.”
Simply put, this series of events reveals rising inequalities in income, well-being and quality of life. Gentrification also has a geographic ripple effect, with demand for high-end residential spaces fanning out into adjacent neighborhoods that enjoy more plentiful low-cost housing options desirable to a broader spectrum of renters and buyers who will inevitably be displaced as gentrification occurs.
In historically disinvested communities, where incomes are even lower and many rent rather than own, longtime community members often lack liquidity and may struggle to buy even the lowest-cost homes and condos, much less to make the necessary renovations and upgrades needed to bring real estate up to current market standards. Job options are few and far between and community resources often stretched thin.
As a result, community members are literally unable to financially invest in their communities. And so, when investment capital pours in from outside the community, leading to the acquisition of apartment buildings, homes and empty lots by investors and developers unfamiliar with the existing community, longtime residents are inevitably priced out of their homes, local mom-and-pop businesses begin to shutter, and recognizable community landmarks are replaced with parking lots and multifamily apartment stacks.
While increased investment in a community can improve quality of life and attract new businesses to a disinvested neighborhood, it can all too often serve as a “bat signal” drawing brokers, investors and developers primarily focused on maximizing their investment returns.
Take, for example, the impact green space can have on historically marginalized urban communities. Investing in parks is proven to make communities more walkable and increase property values, so adding green space should be an easy way to turn around struggling communities.
Unfortunately, history has shown that far too often building large parks in historically marginalized areas can fast-track gentrification. According to the UCLA Institute of the Environment and Sustainability, this often drives “increases in housing prices and the influx of new, wealthier and often white residents in low-income communities of color” and can result in “the displacement of longtime residents that many park equity efforts are designed to serve.”
Simple investment isn’t enough to revitalize a community. Early planning, thorough oversight, and strong collaboration between private and public stakeholders are vital to ensure displacement doesn’t occur.
The good news is there are a host of options designed to avoid disruptions and displacement, and agents can play a vital role in the process. The key is to adopt methods proven to lead to revitalization by building community partnerships, becoming active members in local chambers of commerce, taking the time to interact with community members, leveraging grants and tax incentives to deliver a better product, and being mindful of the fabric of a neighborhood with demolitions and rehabs.
Experience is often the best teacher
Cajigas, who works mainly on Chicago’s Northwest Side, has seen firsthand how the opportunity to invest in homeownership can change the trajectory of displacement, particularly for Hispanic families such as her own.
“Growing up, we moved a lot to find affordable rent; often we were in neighborhoods that weren’t safe,” Cajigas explained. “And I remember in the ’80s when my parents were able to buy a home in Logan Square. What a difference that made for us, to have a sense of stability and to be able to accumulate wealth through our home.”
When Cajigas’ parents purchased, Logan Square was primarily Hispanic, and it remained that way for nearly 20 years. By the early 2000s, the neighborhood began to gentrify rapidly, uprooting much of the community that once surrounded Cajigas’ family. Her mother moved west to Belmont Cragin, and Cajigas purchased a home in Avondale to raise her own family.
Her personal experience led to an interest in first-time homebuyers and a passion for community involvement. “I have seen taxes, rent and pricing rise, and I’ve seen people move out,” Cajigas said. “And affordability is a big reason. This is why I believe it’s important to provide low-income and moderate-income housing in every Chicago neighborhood.”
Cajigas works to achieve this goal by being an active participant in her Avondale community and regularly volunteering to teach homebuying workshops led by Chicago-based housing advocate groups LUCHA, the Northwest Side Housing Center, and the Spanish Coalition for Housing. Thanks to these close relationships, Cajigas often recommends their programs to clients.
“Don’t get me wrong, there are many challenges,” Cajigas said. “But it is so rewarding when we truly help empower communities and people in neighborhoods through partnerships with community organizations to grow their communities and avoid displacement of people with no voice.”
Connect early on with chambers of commerce and elected officials
Ross Wall, a broker associate with Berkshire Hathaway HomeServices Chicago, has lived in the city since his teens, and over the years his affinity for diverse communities led him to neighborhoods on the path of gentrification: Wicker Park, Pilsen and Logan Square.
Neighborhood diversity was a big part of what drove Wall’s rental history, and he moved to the new areas in search of character, bustling communities, and unique restaurants and businesses. This is how Wall ended up buying a home and opening his own business with his significant other in Albany Park.
“Part of why we located here with our salon was because of neighborhood diversity,” Wall said, “and we found that the neighborhood has been extremely supportive of our concept — which is midcentury modern and has more personality. It’s made owning our business here so rewarding.”
Wall knows from experience how quickly a vibrant neighborhood like Albany Park can vanish, pointing to Bucktown, where he feels too many teardowns and demolitions of historic houses have blurred the look of the architecture and made the neighborhood less vibrant overall.
“There is a stigma and frustration of new developers coming in and changing the face of a community,” Wall explains. “When I’m working on a rehab project, I am very concerned with ensuring we are sensitive to the character and aesthetics of the neighborhood. When you demolish a building and replace it with something new, community members often dislike it.”
Wall and his investment partner recently brokered a deal for a gut rehab, acquiring a building where squatters lived. Rather than demolish it, Wall fought to maintain the historic façade, ensuring the look of the building didn’t change. “During this process, we had lots of community members thank us for taking what had been an eyesore and unsafe space in the community and making it into a good housing option,” Wall said. “It’s very important to maintain the character of a community.”
He also pays close attention to city policies that can help him ensure affordability doesn’t become a problem, working closely with his alderperson and chamber of commerce to ensure all options are considered. “New developments are required to have affordable units, and we enforce that here in Albany Park,” Wall said. “You have to balance the needs of developers to see returns on their investments with the desire to avoid displacing current community members … but it’s very important to make this effort.”
Wall is also excited about the proposed expansion of accessory dwelling units, or ADUs, as another solution to maintain a strong supply of affordable housing stock. ADUs are often found in basements, garages and coach houses that traditionally were not allowed to be converted to apartments — one of many particularities of zoning that can be vital for agents to know.
Wall advises involving the community in zoning requests, too. “For instance, if a developer wants to make a zoning change or updates,” he explains, “then it can go in front of the community and let residents help developers meet their needs. And if the developer meets real needs, we should incentivize development with TIF money and other investments to help them keep things affordable.”
In the end, Wall argued that playing an active role in avoiding gentrification is about accountability, oversight and “electing good aldermen.” Because of this commitment, Wall has made himself a regular at the Albany Park Chamber of Commerce and his alderperson’s office, where he is able to monitor what new developments are on the docket and what changes are happening in Albany Park’s commercial corridors.
Develop a track record of collaboration and inclusive revitalization
One of the first things Lamell McMorris, founding principal of Greenlining Realty USA, did when he got the notion to invest in the neighborhood where he grew up, was to start in his own backyard.
“I had a vision,” McMorris said, “that before I did anything new, I wanted to do this gut rehab on my childhood home as a model for the neighborhood of the kind of residential development I wanted to see in our community. We put in all the bells and whistles and let the neighborhood come in to check it out. It was exciting.”
For McMorris, it’s personal. The population in the Woodlawn ZIP code where he grew up is roughly half of what it was 20 years ago. After so much loss, he felt it was time for him to give back and help restore the community.
“My approach to development in my community is less about avoiding displacement and more about bringing things back to where they were when I was a kid and there were walkable communities and active block clubs. Greenlining wants to foster community by bringing in quality housing and retail, which my neighborhood lacks. And for those who are still hanging on as homeowners, we’d like their home values to go up,” he said. “There is room for families, for single parents who want a pathway to homeownership.”
But McMorris knew he couldn’t achieve those goals without reconnecting with his neighbors. Shortly after the open house where he invited the community to see what he’d done with his childhood home, he went to the meeting room in the basement of the Woodlawn African Methodist Episcopal Church to explain what he wanted to do in the neighborhood.
“At first it felt almost like I was campaigning, but I quickly realized it felt good to share my vision of bringing new homes to all of these vacant lots, homes that were consistent with the existing fabric of the buildings in the neighborhood,” McMorris said.
He knew these conversations would be the only way he’d truly be able to know the wants and needs of the community he hoped to revitalize. And to get there, he had to gain trust. “Look, if folks are just meeting you for the first time when they’re hearing about your project,” McMorris said, “then you’re already in trouble.”
McMorris recommends being proactive and lets his body of work as a real estate professional speak for his intentions. “The best time I can preach a message is when I don’t even have to open my mouth,” he said.
McMorris advises real estate developers to work with brokers who really know a community and have earned its respect, which is why he partnered with Compass agent Jerry Brown for his Woodlawn development projects.
As someone in tune with West Woodlawn, Brown plays a vital role in connecting Greenlining Realty with homeowners and potential buyers, and helps to articulate the company’s vision. Both men understand the West Woodlawn community might be skeptical of a development company and have taken intentional steps to meet that concern head on.
“Gentrification is so politically charged,” said Brown. “I’ve been very intentional about saying this is a West Woodlawn revitalization. It’s a community-based approach. We don’t want to just buy, develop and flip. It’s not about ‘buy cheap, sell high’ for us.”
Strategic partnerships have also proven to be invaluable. McMorris is quick to note the central role of the Cook County Land Bank Authority, an organization that acquires abandoned lots and properties with the mission of bringing them back to life through investment and development.
McMorris’s firm is currently pursuing two ambitious developments in Woodlawn, the first being Woodlawn Pointe, a blend of mixed-income residential units designed to generate income for current residents. The National Community Reinvestment Coalition has been pivotal in providing the investment capital and knowledge to help Greenlining replace blighted buildings and spur homeownership and community development.
The second is Project 6300, an ambitious mixed-use development with office, retail and not-for-profit space designed to be transit-oriented and LEED certified. The YWCA, whose Co-Working and Business Development Center will anchor the building, has been another instrumental partner, helping focus Greenlining’s efforts to ensure the community is around to experience the increase in property values and employment opportunities and for them to benefit from that greater value.
“It all comes back to our mission to transform Woodlawn,” McMorris said, “by building with those who are still in the community. Those who left, and those who are yet to come.”