Neighborhood Gentrification Isn't Always a Dirty Word

By Don DeBat

The slow-moving, on-going creep of gentrification in Chicago neighborhoods can be disruptive to apartment renters who are being priced out of their long-term family digs.

Gentrification can be disruptive, but it is not always a dirty word. Real estate experts say the current problem of gentrification isn’t severe enough to warrant radical remedies that would end up hurting the people the fixes are meant to help.

Affordable housing advocates complain that gentrification brings higher rents and rising property values. But that also is good news for the working-class homeowners, many of them minorities and seniors, who reside in appreciating areas.

Gentrification has benefited thousands of working-class families who literally rolled the dice. Following the advice of real estate mogul Arthur Rubloff: “Buy on the fringe and wait.” They invested in dicey neighborhoods, put in the sweat equity to improve their properties, and now hope to bank loan-awaited financial gains.

In a nutshell, that’s the “American Dream”—owning real estate and rising into the middle class of landlord, or the “landed gentry.”

Historically, the beginning of the “gentry,” or upper-middle class, dates back to the 13^th century in Britain and Ireland, and grew with the rise of feudalism. The landed gentry (a.k.a. landlords) generally were educated people of noble birth who lived off of the rental income of their lands.

That history lesson is worth remembering as Chicago looks at what currently is happening today in the neighborhoods of Jackson Park, Woodlawn and South Shore.

Following the recent opening of the Obama Presidential Library, out-of-town apartment investors suddenly are infatuated with Jackson Park and other nearby South Side lakefront neighborhoods. The library already is a major Jackson Park tourist attraction, along with the Museum of Science and Industry.

However, the threat of rising apartment rents in “Obamaville” is sparking a battle between tenants and landlords.

A new city anti-gentrification ordinance that gives tenants the “right-of-first-refusal” to buy their building in certain South Side neighborhoods took effect in April, 2026.

That action has rattled apartment investors and realty industry insiders. The new “Jackson Park Tenant Opportunity to Purchase Act” requires neighborhood landlords to notify tenants when they plan to sell an apartment building and wait 180 days for tenants to make an offer on the property, if they choose to do so. Proponents say the ordinance will slow displacement of residents along South Side lakefront.

Opponents of the ordinance argue the process is unnecessary because tenants have the right to buy a building without the waiting period, and it only delays sales and gives both lenders and buyers cold feet.

Additionally, the ordinance breaches the basic “principle of uniformity” creating a two-tier class of property owner’s rights, said Sara Benson, a veteran appraiser and president of Benson Stanley Realty. “The legislation further diminishers an owner’s bundle of rights by encumbering the right-to-transfer the real estate—as compared with property owners outside the affected district.”

Chicago Mayor, Brandon Johnson (above)

Last week, Mayor Brandon Johnson introduced his “Protecting Renters Ordinance” (PRO), which seeks an overhaul of Chicago’s 40-year-old Residential Landlord and Tenant Ordinance (RLTO).

Currently, the Chicago Assn. of Realtors’ standard 37-page apartment lease is loaded with renter protection. The 2026 lease also includes four pages to protect tenants from domestic violence and abuse.

The proposed ordinance is receiving heavy opposition from the Neighborhood Building Owner’s Alliance (NBOA), a non-profit group of major apartment managers, owners and investors. Here are the restrictions that would be added to the already weighty RLTO:

• A ban on hidden, or so-called “junk fees,” such as application and processing fees.

• A requirement that any amounts charged to renters in addition to monthly rent, and or security deposits, reflect actual, documented costs.

• Creation of a “Tenant Bill of Rights” and the requirement that landlords disclose if they’re using algorithmic pricing tools that are popular in the hotel industry.

• The proposed ordinance also would establish a “rental-registry fee” and create a new administrative body to resolve renter-landlords disputes.

Some landlords say the rental registry essentially would be a “hit list” that would create another layer of taxes on top of property taxes, which are the wildfire-wind driving rent increases.

Owner-occupied, “Ma-and-Pa” two-unit to six-unit buildings and nonprofit affordable housing would be exempt from the registry fee. Larger building owners would be charged a fee of $20 to $60 per unit.

For both big corporate rental-apartment operators and Ma-and-Pa owners, the assassin in the room is soaring property taxes caused by exorbitant governmental spending in Chicago and Cook County. However, the Mayor doesn’t mention that issue.

Chicago gentrification history

The negative concept of “gentrification” was developed in the 1960s and 1970s by extreme leftwing liberals following the passage of the 1968 Civil Rights Act. In 1974, Congress passed the Equal Credit Opportunity Act, which gave women enhanced property ownership rights.

Urbanologists note that gentrification also is synonymous with investment that sparked the rebirth of Chicago neighborhoods in the 1970s. Few people today recall that much of Lincoln Park was blighted in the 1960s and 1970s. Gentrification fixed that.

Neighborhood disinvestment began in the 1950s and culminated with the riots following the assassination of the Rev. Martin Luther King in 1968. Unscrupulous lenders red-lined neighborhoods, and shady realty agents swept in, sparking “block-busting” and “panic peddling” mostly on the South and West sides.   

As Pulitzer Prize-winning columnist Mike Royko reported in “Boss,” his best-selling book on Mayor Richard J. Daley, prior to the 1960s, Chicago was a sea of ethnic neighborhoods. “To the Southwest was Ireland, to the West was Poland and Little Italy, to the North was Germany,” Royko explained.

With an Irish Democrat John F. Kennedy in the White House in 1960, powerful Mayor Daley sought and received millions of dollars in federal Urban Renewal funds to speed the rebirth of Chicago.

Mayor Daley pushed to redevelop flophouses and cheap hotels on 1200 N. to 1500 N. Clark St. and along LaSalle St. on the Near North Side, and replaced the slums with the Rubloff developed, 1,700-unit Carl Sandburg Village, an apartment and townhome community.

Sandburg Village later became the largest condominium conversion in the nation’s history.

Mayor Daley then turned the Urban Renewal bulldozers on East Old Town and Lincoln Park, then low-rent artist and writer’s communities. More than 600 aging brick two-flats and frame homes were razed.

Mayor Daley’s big mistake was the creation of the infamous Cabrini Green public housing project on Chicago Ave. and Division St. just south of North Ave. His son, Mayor Richard M. Daley, eventually razed the projects. Many developers now view the site as the “West Gold Coast.” 

In the mid-1950s, to create a buffer between the rising Cabrini Green, Mayor Richard J. Daley ordered the removal of an elevated street ramp that connected Ogden Avenue to Chicago and Milwaukee avenues and the Near West Side. Once the ramp was dismantled, the broad four-lane Ogden boulevard was vacated for luxury Old Town townhomes and parks.

 “It was a moment when Chicago believed growth and neighborhood stability could coexist,” recalled Old Town resident and urbanologist Timothy J. Carew. “In the 1970s, major high-rises rose simultaneously along North Ave., Wells St. and LaSalle.”

The high-rises were built under FHA Section 220 financing. Developer returns were capped, and Urban renewal land was publicly bid, Carew said. “Those projects created owners, equity and long-term stakeholders across Old Town,” Carew said. “Most of those buildings began as rentals and later converted to condominiums, giving thousands of Chicagoans a path from renter to owner.”

In the 1970s, the growth of Chicago Landmark Districts also led to gentrification. So did the conversion of industrial loft buildings and office high-rises to residential rentals and condos.

Today, gentrification isn’t about to engulf the city. Instead, it has been steady but slow. Typically, five to 10 census tracts gentrify annually. Chicago has about 800 census tracts. On average, fewer than 1% a year gentrify, according to a 2020 report by the Chicago Sun-Times.

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

A detailed map, drafted by the Urban Displacement Project, shows six recently gentrified neighborhoods in East Humboldt Park and Wicker Park. Three of them are along the “606 Trail.” Median values in the six tracts ranging from $368,000 to $428,000. In one tract, home values almost doubled in just six years, from $188,000 in 2012 to $371,000 in 2018, according to census data.

West Humboldt Park in play

Collectively, these six tracts suggest the frontier of gentrification in West Humboldt Park has advanced a mile west, from Western Ave. to Kedzie Ave. West of Kedzie, home values are lower, but the area remains in play.

DePaul University’s Institute for Housing Studies reported that sales prices of homes, and 2-flats to 4-flat buildings along the west end of the 606 Trail have increased a whopping 344% since 2012. However, prices in 2012 were at a post-recession low, with many short sales and foreclosures.

Currently, homes sold 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.

For minority homeowners on the North Side, gentrification may be the one chance they get to build wealth, urban planners say.

Near Obamaville on the South Side, where gentrification is just beginning to take hold, experts say long-term property owners may soon start cashing in. However, a few mission-driven developers also are building affordable housing south of the University of Chicago on Cottage Grove Ave. between 60th and 63rd streets in Woodlawn.

One mixed-use, mixed-income development is designed for gentrified apartment tenants being forced out by rising rents. The complex doesn’t look like affordable housing. It resembles an attractive city street. There’s a mix of housing, shops, sports and cultural facilities, and a supermarket.

That may be a model for how to implement affordable housing without displacing long-term renters and impeding private investment.

For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.