Anti-Gentrification Ordinance Is On The Books, But It Isn’t Being Enforced — Yet

The Chicago Housing Department has pushed off enforcement of a new anti-gentrification ordinance that some landlords call “a massive infringement of private property rights.”

The Chicago City Council quietly approved the Northwest Side Housing Preservation Ordinance in September, giving multifamily tenants in several Chicago neighborhoods the right of first refusal to buy their buildings should a landlord decide to sell and imposing major fees on demolition of existing apartment structures.

The ordinance was set to take effect in a 6-square-mile zone in Hermosa, Logan Square, Avondale, West Town and Humboldt Park last month. But city officials charged with enforcing the new ordinance have delayed cracking down, Crain’s Chicago Business reports.

The Housing Department posted a notice earlier this month saying any building going under contract before Nov. 29 is exempt from the ordinance, the outlet said. Meanwhile, real estate groups are lobbying behind the scenes to push any enforcement action into the new year.

A Housing Department spokesperson told Crain’s the city “has been working with stakeholders to ensure effective implementation of this ordinance.”

Advocates of the measure like Palenque LSNA Director of Housing Christian Diaz called the measure’s passage a major victory, and one of the ordinance’s sponsors, Alderman Carlos Ramirez-Rosa, pressed the council in September to make it effective immediately to head off a massive sell-off by landlords in the impacted neighborhoods.

But the bid to preserve affordability in some of the city’s fastest-changing neighborhoods angered many in the CRE community who said the ordinance could be counterproductive and obstructs their ability to sell property they rightfully own.

Some said the extensive timeline for the tenants' right of first refusal — up to 210 days — was likely to quash deals that have expiration dates on rates and other financing terms. Others said the measure incentivized landlords to let leases on buildings expire until they are fully vacant before selling, defeating the purpose of the legislation.

“I see it as a trigger, like, ‘Hey, I want to sell my building in a year, I'm going to clear all my tenants out,” Karen Biazar, owner of brokerage The Biazar Group, told Bisnow last month.

Landlord groups, mortgage officers and real estate agents have pushed back on the ordinance and are in negotiations with housing officials.

“We want additional time,” Adriann Murawski, local governmental affairs director for Illinois Realtors, told Crain’s. “We’re looking at maybe into 2025, but no date has been settled.”