What to do when higher rents and home prices drive people out of neighborhoods

Chicago is one of the world’s most segregated cities, and it appears Logan Square will soon become another one of Chicago’s segregated neighborhoods.

Last month, WBEZ reported that U.S. Census Bureau data showed that for the first time in 50 years Logan Square is majority white non-Hispanic. The most recent demographic data officially puts Logan Square at 50% white and 39% Latinx.

While the persistent undercounting of communities of color may mean Logan Square has not yet actually reached the 50% threshold for non-Hispanic whites, these latest numbers represent the reality that more than 19,200 working class and mostly Latinx residents have been displaced from Logan Square since 2000. This displacement has been driven by rising rents and high demand for housing in the neighborhood.

Simply put, working poor and working class immigrant and Latinx families cannot outbid mostly white affluent professionals for Logan Square’s finite housing.

In response to rising rents and displacement, some have posited that the solution is to upzone all of Logan Square —- allow new dense and market-rate housing to be built in every part of the community. So-called YIMBY (“Yes In My Backyard”) activists and “market urbanists” argue that by upzoning all of Logan Square we’ll see an increase in the community’s housing stock that will help meet demand, and we’ll witness a corresponding drop in area rents.

As a local policy maker who represents part of Logan Square and is committed to integrated communities, I cannot ignore this possible upzoning solution to displacement. And I can look to other areas of the community that already have less restrictive zoning to assess the impact upzoning would have on the portion of Logan Square I represent.

One such area I can look to are the residential blocks adjacent to Logan Square’s California Blue Line stop. Within 1,500 feet of the stop are residential blocks that are zoned RS-3, which allows for the construction of single family homes and two-flats in limited cases, and RT-4 , a less restrictive zoning that allows for the construction of new two-flats, townhouses, low-density apartment buildings and single family homes.

An analysis of publicly available construction permit data for these blocks finds that 54.5% of the time developers didn’t take advantage of the less restrictive RT-4 zoning to add units, and developers were just as likely to de-convert a multi-unit building into a single family home on blocks zoned RS-3 as they were on blocks zoned RT-4. In one egregious example, a developer demolished three buildings on three adjacent lots zoned RT-4 — buildings with a combined total of six legal units — to build just one six-unit condo building. A condo unit in that new building recently sold for $800,000. One of the two-flats demolished to make way for that condo was listed for $279,900 in 2016.

This example of the impact that less restrictive zoning has had near Logan Square’s California Blue Line stop is consistent with peer-reviewed research by the Urban Institute’s Yonah Freemark that looked at upzoning in Chicago from 2013 to 2015. Freemark found that “areas that were upzoned saw no increase in the number of housing units built compared with equivalent areas that were not upzoned,” that “the short-term response to upzoning was speculation on land, not new housing units…” and that “land became more valuable… [but] the actual addition of housing units, did not soon follow.”

Upzoning proponents, and Freemark himself, rightfully point out that his research does not disprove the well established fact that building more housing helps rein in rents. Upzoning proponents argue that when developers do take advantage of upzoning to add more market-rate units — as was the case when a developer built one 12-story and one 11-story residential tower at Milwaukee and California — that through a process called “filtering” the newly built market-rate housing creates affordability down-market. This is because the new building’s residents trade up and leave behind a less expensive unit that can now be occupied by a new tenant.

However, there’s a major problem with this argument. Research on the impact of new market-rate developments finds that the affordability is felt at the regional level, not necessarily the neighborhood where the new luxury housing was built.

A 2019 working paper published by the Upjohn Institute found that the residents who were moving into Chicago’s new luxury developments often were moving from far flung suburbs, and were almost always moving from one affluent community to another. This means the housing they were vacating for new developments in Logan Square would be out of reach for those facing displacement from the community. And even if this older housing was within financial reach of those displaced from Logan Square, it likely would be in another neighborhood or another county.

Taken together — the examples of development near the California Blue Line stop, Freemark’s research, and the Upjohn Institute paper — this all paints a picture of the impact that blanket upzoning would have on Logan Square.

At its worst, upzoning all of Logan Square would lead to speculation, an increase in land costs, and little to no increase in total housing units in the short term.

At best, upzoning all of Logan Square would turn the neighborhood into a community of “yuppie fish tanks” — dense market-rate developments that cater to young professionals — with the promise that all of these new dense luxury buildings would eventually lead to affordability in a different neighborhood or suburb. Neither of these outcomes would address displacement in Logan Square.

The evidence is clear that upzoning is not a panacea for displacement because, quite simply, displacement is not a solution for displacement. So what is to be done by those who want to address displacement and promote racially and economically diverse communities?

1. Build more affordable housing in communities with high displacement pressure. When the market can’t provide, the government must get involved. Chicago must leverage every opportunity to ensure new affordable housing is built in communities with high displacement pressure like Logan Square. That’s exactly what we’re doing right next to the Logan Square Blue Line stop, where a 100-unit, 100% affordable development will replace a city-owned parking lot. We should seek to replicate this success on every piece of publicly owned and developable land in Logan Square.
2. Strengthen inclusionary zoning policies to ensure that when new dense buildings are built they include the maximum number of affordable units. City Hall already is working to reform our inclusionary zoning policy—- the Affordable Requirements Ordinance (ARO) — and housing advocates are calling for a 20% affordability requirement for neighborhoods like Logan Square. Requiring new dense developments to include 20% affordability makes sense for hot markets like Logan Square, but market urbanists and upzoning advocates must note that — in the context of Chicago — affordability requirements are triggered only when a project is upzoned. A blanket upzone of Logan Square would nullify Chicago’s ARO.
3. Institute minimum density in concert with demolition impact fees. As research has shown, it’s not enough to tell developers they can build more units; they must be told to build more units if we want to see an increase in housing. But a minimum density policy must be coupled with a demolition impact fee to work in concert to protect our community’s existing two-flats and three-flats — so-called “missing middle housing” — which provide so much of the naturally occurring affordability in our communities.
4. Make it easier to build new accessory dwelling units — basement, attic, and coach house apartments. Chicago’s new accessory dwelling units pilot program covers 80% of the ward I represent, but this program must be expanded to include the entirety of Logan Square and the city, and City Hall must provide support for low-income homeowners to be able to build these new units. Take for example the three adjacent buildings and six units near the California Blue Line stop that were demolished to make way for just one six unit condo building, a much better outcome would have been the preservation of those buildings, with the addition of as many accessory dwelling units as possible. Minimum density requirements, a demolition impact fee, and accessory dwelling units would help produce such an outcome.
5. Create community land trusts to ensure low-income homeowners aren’t priced out of the neighborhood. Community land trusts can help set aside a portion of the neighborhood’s housing as permanently affordable. Placing properties in a community land trust will ensure low-income homeowners can buy in the community and build equity, while guaranteeing that the land trust properties are only ever sold to other low-income buyers.
6. Expand tenant protections to help keep working class renters in their homes. This final piece is critically important: only through policies like rent control and Just Cause for Eviction can we truly stop displacement in our neighborhoods.

Logan Square becoming an all white community is not an inevitability. We do not need to resign ourselves to Logan Square becoming a “yuppie fish tank” community. Rather than see the resegregation of our community as an inevitable outcome, we should view Logan Square’s current diversity as an opportunity to build a racially and economically integrated city.

While the most recent U.S. Census Bureau numbers are sobering, the great news is that our community is taking steps to address displacement. The Logan Square Neighborhood Association has formed a community land trust. Through our 35th Ward Community-Driven Zoning and Development process, community groups like the neighborhood association and Logan Square Preservation came together to support the all-affordable transit oriented development next to the Logan Square Blue Line stop, and are continuing to work together to promote preservation and affordable housing.

Thanks to the neighborhood association’s organizing work, two ordinances have been introduced to the Chicago City Council to institute a minimum density and demolition impact fee pilot for a portion of Logan Square. And in 2018, 74% of Logan Square voters supported lifting the ban on rent control — a powerful message to Springfield to lift the ban, and to the Chicago City Council to act on Just Cause for Eviction protections.

Fifty years from now, future Chicagoans will judge our housing policies by their outcomes. Will the housing policies we institute today work to address displacement? Or will they reify segregation? We need to recognize that displacement is not a solution to displacement, and that blanket upzoning is not a silver bullet to keep or make our neighborhoods diverse. It will take a whole host of government policies and interventions, working in tandem, to ensure Chicago has racially and economically integrated communities.

Thirty-fifth Ward Ald. Carlos Ramirez-Rosa represents parts of Chicago’s Albany Park, Avondale, Hermosa, Irving Park and Logan Square neighborhoods.

Send letters to letters@suntimes.com.