Aldermen propose hefty fees to stop 606 gentrification

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The 606, or Bloomingdale Trail, a 2.7-mile trail and park that runs along an unused, elevated rail line between Ashland and Ridgeway, shown in 2015. File Photo. | Ashlee Rezin/for Sun-Times Media

Concerned about a nearly 50 percent surge in home prices along the wildly popular 606 trail, a pair of local aldermen have a plan to stop that gentrification dead in its tracks.

At Wednesday’s City Council meeting, Aldermen Proco Joe Moreno (1st) and Roberto Maldonado (26th) will introduce their plan to impose dramatically higher demolition fees along the trail and impose a new “de-conversion fee” whenever developers try to turn multi-family housing into more lucrative single-family homes.

Housing prices west of Western Avenue have increased by 48.2 percent since ground was broken on the 2.7-mile urban oasis, according to a study by the Institute for Housing Studies at DePaul University.

The converted elevated freight line has become a mecca for bicycle riders, skaters, runners and pedestrians. Housing prices east of the trail are up by nearly 14 percent.

Moreno said rising property values are a good thing, but only if longtime residents of Bucktown, Wicker Park, Humboldt Park and Logan Square can afford to remain in their homes.

“The goal is to provide a financial incentive for people to restore their homes rather than have them torn down. That’s the carrot part of the ordinance.

“The [stick] part of the ordinance is to dramatically increase demolition fees, so that developers think twice before [demolishing] buildings around the 606. Now that the 606 has been built and it’s a great asset, we want people of all economic levels to be able to live near it and enjoy it. We don’t just want to have a stick. We want to have a carrot, too.”

The “Pilot Act for the Preservation of Affording Housing in the 606 Residential Area” would impact an area bounded by Hirsch, Palmer, Western and Kostner.

Within those boundaries, developers of new housing would have a choice: either designate at least 50 percent of the units they build as affordable or pay hefty demolition fees.

The sky-high fees would be $300,000 for each single-family home demolished to $450,000 for a two-flat; $550,000 for a three-flat; $650,000 for a four-flat; and $150,000-per-unit for five units or more.

If existing buildings are expanded, developers would pay additional fees ranging from $100,000 for every 1,750 square feet of additional space to $250,000 for 2,500 more square feet.

Developers would also pay through the nose for the privilege of rezoning impacted property in the designated area for residential use.

Those fees would amount to $300,000 for “up to the first 3,125 square of space and $300,000 for each additional 3,125 square feet,” the ordinance states.

All fees collected from developers would be deposited into a “606 Residential Area Affordable Housing Trust Fund” managed and dispersed by a board of 11 trustees for the purpose of investing in affordable housing.

Trustees would include three local aldermen; commissioners of the city Departments of Buildings and Planning and Development and representatives from the Logan Square Neighborhood Association, the Spanish Coalition for Housing and the Latin United Housing Association.

“Let’s say you’ve got a home. It’s old. It needs some work. It’s livable, but it needs some work, and a developer comes along, offers a decent amount of money, tears it down and builds a much, much, much more expensive condos. And the current owners have been there for 30 years and don’t have the dollars to invest in it,” Moreno said.

“By creating a fund, we’re saying, ‘You want to stay here? You want to fix it up? Here’s some money for you to be able to do that.’ And by the way developers, ‘If you’re gonna do this, it’s gonna cost you a lot, lot more than the typical demo fee that the city has.’ ”

Maldonado could not be reached for comment.

Moreno and Maldonado aren’t the only ones preoccupied with housing issues.

The City Council’s most powerful alderman wants to take a tiny step toward solving a chronic problem — by providing “tiny houses” for Chicago’s homeless population.

Portland, Seattle and Berkeley, California, have already created pilot programs to build 320-square-foot homes large enough to house a single homeless person. The homes are built by volunteers with materials that cost $2,000.

Ald. Edward Burke (14th), chairman of the City Council’s Finance Committee, wants his colleagues to examine the feasibility of establishing a similar pilot program in Chicago to whittle away at a homeless population pegged at 5,889, according to the city’s most recent count.

“These cities are testing ‘out-of-the-box’ solutions to a chronic problem that all major urban centers face,” Burke was quoted as saying in a press release.

“I see no reason why Chicago should not also think and act innovatively.”

Last year, Mayor Rahm Emanuel urged Chicago-area hospitals to bankroll preventive care for the chronically homeless who now often seek costlier, last-resort care at hospital emergency rooms.

Speaking to the Corporation for Supportive Housing’s second-annual national conference, Emanuel said hospitals are “on the front line of the homeless crisis whether they want it or not.”

The burgeoning problem of chronic homelessness is “filling up their emergency rooms,” leaving hospitals with a choice: “Either pay it from the emergency room or be on the front-line of a preventive form of health care,” the mayor said then.

The City Council subsequently approved Emanuel’s plan to slap a 4-percent surcharge on Airbnb to generate $2 million to combat chronic homelessness.

606 Affordable Housing Preservation Ord. May 2017 by Scott Fornek on Scribd

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