Your story on the South Loop (Page 1, Oct. 2) was right: The metamorphosis of the neighborhood is no shock. No shock at all.
What is shocking is what the story failed to mention: The $215 million in taxpayer money being poured into the area to subsidize the rapid upscale redevelopment. Much of this money from the city’s Near South Tax Increment Financing (TIF) district has spruced up streets and sidewalks throughout the area with fancy lamp posts and trees, indirectly aiding developers and pushing property values up. Alarmingly, some taxpayer money has also gone directly to subsidize already profitable developments.
This flurry of city investment–three times the average amount for Chicago neighborhoods–has caused property values and rents to rise exponentially. According to a major real estate firm, prices in the area rose more than 150 percent in 1994 alone. Finding a loft or condo for as little as $50,000 in the area, as your article suggests is possible, would be like finding a needle in a haystack.
This city-sponsored gentrification has not been without its costs. Families have been displaced by rising rents and owners converting their apartments to condominiums. One example is at 1314 S. Wabash Ave., once home to 11 low-income families. After a developer converted the warehouse next door into luxury lofts with the help of $2 million in city funds, the owner of 1314 S. Wabash decided to convert this building to condos. Within a week, all 11 families were gone.
No one knows exactly how many families have been displaced so far. But with 2,500 new units of housing and 6,000 new residents since 1993, the city’s massive subsidies have created a very hot real estate market, spurring higher taxes and rents that do not fit into everyone’s budget.
The Chicago Coalition for the Homeless and the Chicago Affordable Housing Coalition have called on the city for the last three years to ensure that the development of the area is truly mixed-income, providing affordable housing as well as lofts and townhomes.
After intense pressure, the city included the construction of two new single room occupancy (SRO) hotels–the first of which has just opened–in its plans for the neighborhood and halted the destruction of the existing SROs. Although the city’s homeless shelters for families are overflowing, to date no affordable family housing has been built.
With millions of dollars of public funds involved, it is important that we make careful public policy decisions about development and ensure that people of all incomes are served. Development can spur new business and rebuild the tax base, but it also has hidden costs when done recklessly. Rather than a success, the South Loop looks increasingly like a missed opportunity: Chicago is passing over one more chance to create a truly mixed-income community and to begin to close the gap between the number of low-income renters and affordable apartments.
When our development policies result in a bed-and-breakfast for tourists, while destroying low-income housing and displacing low-income families, we must ask whether what your article calls “one of the most successful, but least trumpeted residential redevelopments in the country” really ought to be trumpeted at all.
