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Developers Who Demolish Homes Near The 606, Pilsen Will Be Hit With Fees Through 2024 After Program Extended

The surcharge pulled in $120,000 from eight demolition permits over the past year, resulting in fewer demolitions, officials said. The program is an effort to slow gentrification in these areas.

People walk along The 606 Trail next to townhouses in Logan Square on Nov. 8, 2021.
Colin Boyle/Block Club Chicago
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CHICAGO – A two-year extension of a program meant to slow gentrification in Pilsen and along The 606 trail was approved Wednesday by City Council.

A one-year pilot program was passed in spring 2021 to slow the rate of demolitions in two areas with rapidly rising housing costs. It was championed by the alderpeople who represent the neighborhoods.

The ordinance charges developers a $15,000 fee to demolish single-family buildings in portions of Pilsen, Logan Square, Bucktown and West Humboldt Park. Demolitions of multi-family buildings lead to a fee of $5,000 per unit or $15,000, whichever is greater.

While the program was in place, there were fewer deconversions compared to areas around the pilot zones, housing Commissioner Marisa Novara told the Finance Committee Monday.

The surcharge “is doing what we hoped it would,” Novara said. The surcharge pulled in $120,000 from eight demolition permits.

The fees will go into the Chicago Community Land Trust, an effort aimed at creating a pathway for homeownership for low- and moderate-income Chicagoans.

Under the extended ordinance, the surcharge fees will remain the same and will be in effect until April 1, 2024.

“The data speaks for itself. While many communities throughout the city of Chicago have seen a decrease in demolition as a result of the pandemic, in the communities where this ordinance has been put in place, we have seen an even steeper decline in demolitions. And that means this ordinance is working,” said Ald. Carlos Ramirez-Rosa (35th), one of the ordinance’s co-sponsors.

“There’s no reason developers should be coming in and knocking down a perfectly good two-flat or four-flat in Logan Square or in Pilsen, when they could be developing land that is currently vacant.”

Credit: Colin Boyle/Block Club Chicago
Buildings in the Pilsen neighborhood in Chicago on January 27, 2021.

In November, a Cook County judge threw out a lawsuit filed by a Logan Square property owner challenging the surcharge ordinance because the plaintiff, Stephen Brennan, failed to notify all property owners within 250 feet of the property involved in the lawsuit.

The lawsuit argued the surcharge “negatively affects” the value of Brennan’s Logan Square home by imposing a “tax” on two areas of the city without imposing it on the rest of the city.

In Logan Square, Bucktown and West Humboldt Park, the ordinance applies to buildings zoned as RS3 and RS3.5 in the area bounded by Armitage Avenue, Western Avenue, North Avenue, Kedzie Avenue, Hirsch Street and Kostner Avenue. The ordinance also includes large swaths of Pilsen.

Ald. Raymond Lopez (15th) was the sole “no” vote at Monday’s Finance Committee hearing on the matter.

Lopez argued the ordinance Is having a “real impact on the generational wealth” of families who’ve resided in the neighborhoods for years and may wish to “cash in” on the rising property values.

“When you have individuals who have been in communities 20, 30, 40, 50 years and decide to try to cash in on their equity as is the tradition of owning a home…fees like this steal that equity from underneath them,” Lopez said Monday.

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