Will pausing new homes in the 606 zone push gentrification elsewhere?

Two aldermen are proposing a moratorium on building new homes in a zone around the popular 606 Trail, a move that builders say might result in increasing gentrification pressure elsewhere.
 
Demand for new homes in the city “is like a balloon; If you push down part of it, it (swells) somewhere else,” said Michael Yeagle, a developer and Compass real estate agent whose firm, Studio Realty, sold a newly built house on Moffatt Street a block from the 606 for more than $1.3 million in December.

The five-bedroom, 3,700-square foot house, which replaced a 128-year-old, 980-square-foot home, is inside the  four square mile zone where Ald. Roberto Maldonado (26th) and Ald. Carlos Ramirez-Rosa (35th) want to halt new construction—except for affordable housing—and zoning changes for a year.
 
“We want to slow down market-rate development to give some time to stop the rampant gentrification we’ve been experiencing in this area,” Maldonado said. “We have a sense of urgency because people who look like me are being displaced.”
 
The Aldermen propose to create a no-build zone that spans a half mile north and south of the trail between Western and Kostner Avenues, an area that Maldonado said is “going crazy” with higher-priced new construction. (See map at the bottom of this article.) The stretch of the trail east of Western Avenue was already dense with luxury homes before the trail opened in 2015.
 
In the moratorium zone, more than 75 new construction houses, condos or townhouses have sold in the past 12 months, according to Crain’s analysis of listings in the Midwest Real Estate Data system. They haven’t all replaced lower-priced homes; some replaced former industrial property, such as the old Phoenix Fasteners factory site that now contains 50 new townhouses, all sold.
 
Maldonado expects to get it on the agenda of the City Council’s Committee on Housing and Real Estate later this month. The ordinance temporarily prohibits demolition permits that are tied to a subsequent constriction permit, except in cases where affordable housing will be built or the existing building is dangerous to inhabit, Maldonado said. If approved, the moratorium would be in place for a year.

News of the aldermen's proposal was first reported by the Chicago Tribune.
 
During that time, Maldonado said, the Aldermen and community groups would collaborate on drawing up a plan to retain affordable housing in the neighborhoods that touch the trail. The moratorium, he said, “gives us some space to think” without having to respond to individual construction proposals on the fly.
 
A year-long ban on new construction may shift developers’ attention to other nearby areas, both Yeagle and Brian Duggan, an executive with Guardian Properties suggested. Guardian built the townhomes on the Phoenix site at Homer Street and Cortland Avenue, and how has three condos for sale in a newly-built three-flat immediately north of the 606 on Campbell.
 
“Developers can reposition and go into different neighborhoods, and they’ll do that,” Duggan said. “The landowners who want to sell their land can’t” move their land. His firm bought the Campbell Avenue site in 2018, according to the Cook County Recorder of Deeds, paying $350,000 to an owner who bought the empty lot in 1995 for $14,000.
 
The 606 was always going to be a problem, said Maldonado, who says he declined to participate in most of its planning and its ribbon-cutting. “I went to one community meeting, and nobody looked like me,” he said. “I could see the writing on the wall. This is not for my people.”
 
A year after the 2015 opening, DePaul University’s Institute for Housing Studies reported that home values around the western portion of the trail (the area now being considered for a moratorium zone) had shot up at twice the rate of home values on the east side. Maldonado and others have tried several means to slow the displacement of long-term residents, including, in 2018, offering home-repair grants to lower-income homeowners to encourage them to update their homes rather than sell out to developers.
 
While the pace of change in the neighborhood has been surprising, Yeagle said it’s the predictable result of a pivot toward city living by affluent people.
 
“The reality is more than just the 606,” Yeagle said. “More and more folks when they reach the age of having children are staying in the city. They want a pedestrian-friendly life close to downtown and the Blue Line, and the (moratorium zone) is in the path of expansion.”
 
That appetite, he suggested, won’t pause for a year.