CHICAGO (CBS) – Aldermen on Monday put forward a plan to impose thousands of dollars in additional fees on anyone seeking to demolish single-family homes and apartment buildings in Pilsen and near the popular Bloomingdale Trail, in the latest attempt to curb gentrification in these regions.
The ordinance approved by a 20-11 vote of the city council’s finance committee on Monday would add an additional $ 15,000 for permits to demolish single-family homes, townhouses or apartments in either. zone as part of a one-year pilot program. . Demolition permits for large apartment buildings would require an additional $ 5,000 per unit.
The revenue from the additional fees would go to the city’s Affordable Housing Fund, which collects various fees from developers to help subsidize affordable housing initiatives in low-income neighborhoods.
Mayor Lori Lightfoot presented the plan to city council in February, a month after aldermen approved an anti-deconversion ordinance that would make it more difficult to transform existing multi-unit buildings into single-family homes in much of the neighborhood of Pilsen and near the Bloomingdale Trail, also known as 606.
Ald. Daniel La Spata (1st), whose neighborhood includes part of the Bloomingdale Trail, said that despite the city’s best efforts since the trail was completed to increase the number of affordable units in the area, “we are losing the war on gentrification and the segregation”.
La Spata said developers helping gentrification near 606 and Pilsen should do more to pay for the loss of affordable housing.
“I would say our communities have been paying these costs for years because of the loss of affordability, because of the environmental impact of unnecessary demolitions. We pay the fees right away. It just makes those who contribute to those costs – to our city, to our community – really accountable, ”he said. “If we want to act effectively against segregation and against gentrification in our communities, this is an essential tool. “
Some aldermen questioned the legality of requiring a surcharge on demolition permits only in specific parts of town, with Ald. Nicolas Sposato (38e) warning: “We are going to have a trial.”
However, Lightfoot administration officials said they were confident the surcharge would stand up to legal scrutiny.
Deputy attorney for the Weston Hanscom company said state law allows municipalities to tax demolition contractors. He also said that the Constitution’s “uniformity clause” requires reasonable justification of the lines that would be drawn in this type of targeted fee.
“We understand that the problem addressed here is certainly a problem in this particular area,” said Hanscom. “This can be a somewhat subjective call so I don’t mean to say I’m 100% sure what would happen, but in my opinion after many years of doing this and dealing with many cases involving this issue , I believe it is lawful.
Supporters of the ordinance also noted that Evanston already levies an additional tax on demolition permits for residential structures.
While one of 20 council members who voted in favor of the surcharge, Ald. Georges Cardenas (12e) wondered if this would really reduce gentrification in the targeted areas, arguing that wealthy developers would pay the extra “without hesitation”.
“The guy with the money, that’s okay,” he said. “They will gladly pay this tax, no doubt. If you build a million dollar mansion, $ 10,000 won’t make any difference.
Cardenas also warned of the unintended consequences, suggesting it would deter some families from trying to increase the size of existing homes.
“I don’t know what will happen in six months, but what I do know is that this policy will add an additional cost to people who may want to live together, but they may want to create housing for them. their whole family. , “he said.” That’s what it’s going to be, a tax on them after being hit hard, after a pandemic, after having gone through the heartbreaking experience of part of the family losing their home. “
Ald. Byron Sigcho-Lopez (25)e), whose neighborhood includes part of Pilsen, said demolition costs should be higher.
“Make no mistake, this is not going to hurt the small owner, it is going to help us regulate some of the types of free development that we have seen in our communities,” he said.
The ordinance provides for exemptions from the demolition surcharge if at least half of the units to be replaced will be reserved as affordable housing, or if demolition is necessary for health or safety reasons.
The ordinance is now forwarded to full city council for review on Wednesday.
In other cases, aldermen have approved the use of $ 17.6 million in tax increase funding to help pay for improvements and repairs to 17 public parks across the city this year.
Additionally, after a month-long delay caused by complaints about discriminatory lending practices by the banking sector, the aldermen approved a list of 13 banks that will serve as the city’s municipal custodians in 2021.
The measure was originally put to a vote in February, but was postponed for a month as aldermen sought to pressure banks to start lending more to black and Latino owners and businesses.
City comptroller Reshma Soni said the Lightfoot administration was holding meetings with aldermen, housing advocates, the city treasurer’s office and the legal department to discuss a plan to start work on the choice of municipal depositories for the city 2022 earlier than usual this year, with the hope of getting banks to agree to better lending practices.
Treasurer Melissa Conyears-Ervin also said she plans to create a “Municipal Custodian Working Group” over the next month to recommend ways to improve the municipal custodian selection process and help engage more neighborhood banks.