Gentrification in Chicago not only isn’t always a problem, often it’s an opportunity

Gabe Burgos, who calls himself a “Puerto Rican hillbilly” — he was born in Kentucky to Puerto Rican parents — lives with his wife Ara, a native of Costa Rica, in a Ravenswood two-flat the couple bought in 1982 for $97,000.

It was a tough neighborhood back then. The year the couple purchased their home, a burglar broke in to a house a few doors away, killed one of the people who lived there and set the place on fire.

An Army veteran who became a factory foreman, Burgos talks of gangbangers taking potshots at each other at the nearby high school, drug dealers and hookers doing business in the apartment building across the alley and somebody breaking in to his garage. For years, he was part of a neighborhood watch group that patrolled the streets at night with CB radios, on the lookout for suspicious activity.

But the Burgoses stuck it out, raising three children there. Multiple generations of the family now live on the premises.

The neighborhood has improved since 1982 and, by most benchmarks, would be considered gentrified.

Today, new homes on the street sell for $1.5 million or more. According to the Cook County assessor, the Burgoses’ two-flat is worth $715,000 — up 637% over what they paid.

“This was a bad neighborhood when we bought,” Burgos says. “Now, it’s beautiful.”

He and Ara plan to leave the house to their children and grandchildren as an inheritance.

The Burgoses are my next-door neighbors. Their story demonstrates why gentrification isn’t the plague it’s often made out to be. It has benefited working-class families who invested in dicey neighborhoods, labored to improve them and now stand to realize substantial gains.

That’s worth remembering as Chicago experiments with ways to halt or slow gentrification, such as a recently approved six-month moratorium on teardowns near The 606 recreational trail.

Gentrification can be disruptive. But the problems associated with it aren’t severe enough to warrant radical remedies that might only end up harming the people meant to be helped.

This map shows the advance of gentrification in Chicago since 2000, as evidenced by high property values.

Ed Zotti / Sun-Times

Gentrification isn’t about to engulf the city. It’s been steady but slow. Typically, five to 10 census tracts — the small shapes shown on the map — gentrify annually.

Chicago has about 800 census tracts. On average, fewer than 1% a year gentrify.

These newly affluent areas aren’t randomly scattered. They’re mostly extensions of gentrified zones.

The map shows six recently gentrified neighborhoods, depicted in yellow, in East Humboldt Park. Three of them are along The 606, circled in red.

Median values in the six tracts ranging from $368,000 to $428,000. In one, the value almost doubled in just six years, from $188,000 in 2012 to $371,000 in 2018, according to census data. In the others, the increase was more modest.

Collectively, these six tracts suggest the frontier of gentrification in Humboldt Park has advanced a mile west, from Western Avenue to Kedzie Avenue. West of Kedzie, home values are lower. But the area is in play. DePaul University’s Institute for Housing Studies recently found that sales prices for one- to four-unit buildings along the west end of The 606 have increased by 344% since 2012.

That’s an alarming number, suggesting things are out of control. But it’s a little misleading, real estate sales data suggests. Prices in 2012 were at a post-recession low, with many short sales and foreclosures. Homes sold now typically are new construction or gut rehabs. The median value for all homes in the area, not just those recently sold, is typically in the mid-$200,000s, according to census data.

Not for long. Home values will rise steadily as renovation or replacement of the neighborhood’s old housing stock continues. That might be bad news for affordable housing advocates, but it’s good news for the working-class homeowners who live in those homes now, many of whom are minorities.

Like the Burgoses, they’ll be able to sell their homes for many times what they paid.

“For a lot of minority homeowners on the North Side, gentrification is the one chance they get to build wealth,” says city planner Pete Saunders, who blogs about urban issues. “They don’t always get the big payoff they’re hoping for, but usually they make something.

“On the South Side, where gentrification never took hold, people don’t get that opportunity. Property values even in middle-class communities have declined. Not only do you not make money, sometimes you don’t get back your investment.”

Gentrification’s high prices can inject a lot of capital into a city starved for investment. That doesn’t necessarily translate into a better world. Humboldt Park will become more affluent, but no one who values diversity wants it to become strictly an enclave of the rich. Absent intervention, though, that will be the result.

The 606 is a case in point. It should have been obvious the area around the old Bloomingdale rail line was primed to become the next hot neighborhood and that the 606 would light the match. But too little thought was given to what that meant for the neighborhood.

A predictable consequence was the loss of affordable housing. A solution, the authors of the DePaul study say, would have been working with “mission-driven developers” to “acquire 2-to-4 unit properties to keep rental units affordable.” Now, they note ruefully, it’s a little late.

Whatever your plan for balanced development, you need to acquire the wherewithal while it’s cheap.

The work of a mission-driven developer on the South Side shows what can be done to counteract gentrification’s exclusionary tendencies. Preservation of Affordable Housing — POAH — has built a mixed-use, mixed-income development on Cottage Grove Avenue between 60th and 63rd Streets in Woodlawn that’s a model for how to implement affordable housing without impeding private investment.

The complex doesn’t look like affordable housing. It looks like an attractive city street, with the University of Chicago to the north and a CTA Green Line station on the south. In between, there’s a mix of housing, shops, sports and cultural facilities, a supermarket and more.

“Woodlawn has plenty of vacant property, so we had an opportunity to create affordable rental and home ownership while leaving room for higher-income development,” says Bill Eager, a POAH senior vice president.

As a demonstration of how affordable housing can be integrated into the urban fabric, it works.

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