Rent control is not the answer.
Chicago faces the very real problem of longtime residents being forced out of their homes by rapidly rising rents in increasingly desirable neighborhoods, such as Logan Square, Pilsen and Lincoln Square. The city should use every tool in its urban planning box to minimize the impact of gentrification, easing the blow on people — often living on fixed or lower incomes — who can’t afford one rent increase after another.
But rent control, a proposal being pushed by at least one alderman and community groups, has a long history of creating more problems than it solves.
Under a rent control system, a city caps rent increases for a certain percentage of apartments. The goal is to maintain a supply of affordable rental units, even in areas where housing costs are shooting up. New York and Los Angeles, for example, have rent control rules. But by disrupting market forces, rent control inevitably creates a dangerous disincentive for developers to build new housing and for landlords to properly maintain existing units. Rents for some apartments hold steady while rents for others shoot up to make up the difference when the demand is high. An illegal black market develops as one renter quietly tries to pass an apartment along to another renter — sometimes demanding a kickback — without the landlord catching on.
In Illinois, rent control was banned statewide by a 1997 law. On Tuesday, state Rep. Will Guzzardi, D-Chicago, said at a Kenwood press conference he has introduced legislation to do away with the statewide ban. That, he said, would allow municipalities to make their own decisions instead of having their hands tied by the state.
Guzzardi is troubled by neighborhoods such as Logan Square, where property values are rising so quickly that renters who have lived there for 20 or 30 years are being pushed out. Developers buy a building, slap on some new paint, raise the rents by hundreds of dollars a month and kick everyone out, he said.
Last April, for example, tenants of a building in Logan Square were told they would have to pay $300 to $600 more a month or move away. Data from the Chicago Rehab Network and Rent Jungle indicate monthly rents in Logan Square rose from $823 in 2000 to $1,550 in late 2016.
One way City Hall can help residents caught in the cross-hairs of gentrification is through transit-oriented development. This is a creative and far-sighted effort to build a greater number of living units near transportation hubs than would be normally be allowed. By requiring a large number of affordable units in the new construction, aldermen are helping longtime residents stay in their neighborhoods.
Transit-oriented development also works naturally to produce more affordable living opportunities in a city. Because the building typically is located right next to a CTA L stop or Metra station, residents are less likely to need a car. And the building can be designed with fewer parking spaces, bringing down the cost.
Jacky Grimshaw, vice president of government affairs for the Center for Neighborhood Technology, calls it “equitable transit-oriented development.”
As she travels up and down the Blue Line, for example, she constantly sees old buildings disappearing and new developments going up. Or she sees “another Yuppie business where there used to be a Polish business or a Puerto Rican business.”
Including affordable housing in new transit-oriented development helps keep long-time neighborhood residents from being pushed out, she said.
Gentrification is a problem a lot of aging big cities would love to have. It means people are moving in or moving back in. But that drives up rents and the general costs of housing, and folks who have been living in a neighborhood all along, even when it wasn’t so hip a place, pay a price. In Chicago, those higher rents because of gentrification have been made all the worse by a recent round of property tax increases.
It’s good the city’s economy is prospering in some neighborhoods. The challenge is to ensure the benefits are spread as widely as possible.
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