Pro- and Anti-Moreno Factions Square Off Over TOD Development Issue

First Ward Alderman Proco “Joe” Moreno has been one of Chicago’s leading proponents of transit-oriented development. He sponsored the city’s 2013 TOD ordinance, and he’s been a strong supporter of dense, parking-lite developments near ‘L’ stops in his district. He’s also one of a handful of aldermen who don’t approve zoning changes for new housing developments unless ten percent of the units are affordable, rather than letting the developer opt out by paying into the city’s affordable housing fund.

Several upscale TOD developments are in the works near the California Blue Line stop in Logan Square. In all of the proposals, about ten percent of the housing units would be affordable. These projects take advantage of the current TOD ordinance (Mayor Rahm Emanuel recently proposed a more robust ordinance) by including only one or fewer parking spaces for every two units. The proximity to transit and lack of excess parking spaces would make it easy for new residents to live car-free, and would discourage them from bringing more cars into the neighborhood. Here’s a chart of the new developments by Streetsblog’s Steven Vance:

Address Phase Units Aff. Units Spaces Ratio
2211 N Milwaukee Ave Under construction 120 12 60 0.50
2293 N Milwaukee Ave Alderman must approve 213 21 68 0.32
2328 N California Ave Approved but new proposal 135 14 48 0.36
2841-45 W Belden Ave Proposed 95 10 44 0.46
2240 N Milwaukee Ave Proposed 40 ? 31 0.78

As in many neighborhoods where TOD has been proposed, there’s been stiff opposition from neighbors who fear that dense housing with limited car spaces would lead to traffic and parking headaches. In Logan Square, these opponents have been joined by community activists who have argued that adding large amounts of high-end housing will fuel gentrification in the neighborhood by raising property values, property taxes, and rents.

It’s true that these new developments will make it easier for new residents to find homes in Logan Square and, since the rents for market-rate units in these new-construction buildings will be relatively high, these newcomers will be relatively affluent. That will likely lead to more amenities in the neighborhood, like upscale retail, that will encourage other middle- and upper-income people to settle in Logan.

On the other hand, the neighborhood is already gentrifying rapidly and, arguably, building new units will take some pressure off the housing market. This could reduce the incentive for landlords to raise rents in existing buildings, forcing out lower-income residents. It’s hard to predict how much the gentrifying effects of these new buildings would be mitigated by the phenomenon of an increased housing supply reducing demand.

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Rendering of the proposal for 2841-45 West Belden.

Anti-gentrification activists in Logan Square have called for including a higher percentage of affordable housing units in these projects, and have advocated for changing the standards of what constitutes “affordability” in order to make the units more accessible to low-income people. The city’s Affordable Requirements Ordinance currently dictates that affordable rental units must be within the means of households earning up to 60 percent of Area Median Income.

However, some of the activists have also called for reducing the size of the developments. Moreno says that’s counterproductive, arguing that density makes it feasible for developers to provide on-site affordable housing. “I need tools as the alderman to be able to bring affordable housing — I can’t just advocate for it,” he recently told DNAinfo. “Those who advocate for affordable housing and don’t advocate for density — they don’t get [affordable housing]. They’re shooting themselves in the foot.”

Last night after work, the grassroots group Somos (“We Are”) Logan Square held a “March on Moreno” protest against the TOD projects. “Alderman Moreno is a fake progressive touting fake affordability,” read the Facebook event. “He has been approving one massive luxury development after another, and if we don’t stop him, these projects will cause rents, property taxes and real estate speculation to skyrocket across the neighborhood.”

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Hafizzah Omar from Somos Logan Square. Photo: John Greenfield

A couple dozen protesters gathered near the California stop, holding placards with slogans like “Community says no, Joe,” “Upzoning equals uprooting communities and families,” and “Transit-oriented displacement.” They were met by a march made up of a roughly equal number of Moreno supporters holding signs with messages like “We want progress, we want Joe” and “First Ward leads the way.”

For a few minutes, the two groups faced off in a shouting match. The anti- faction chanted “Moreno, escucha, somos en la lucha” (“Moreno, listen, we are in the struggle”). The alderman’s supporters shouted a similar, pro-Moreno phrase in Spanish, as well as the less-catchy “Fifteen-dollar minimum wage, TOD, ban the [plastic] bags, affordable housing – sounds progressive to me.” After a pause, the two groups marched to Moreno’s ward office at 2058 North Western, where there was another confrontation.

During the break in the battle, a couple of participants shared their perspective on TOD. Camilo Ferro, who owns a composting and compostable packaging business, was among the Moreno supporters, and he said he’s in favor of more development near transit. “Everything I do in my life is focused around sustainability and further developing community for sustainable purposes,” he said. “Having a business or housing next to public transportation gives you different access points throughout the entire city, and you don’t have to worry about driving or a parking lot.”

IMG_2227
Moreno supporters Raymond Souchet and Camilo Ferro. Photo: John Greenfield

Ferro said that the claims that the TOD developments will cause displacement are unfounded. “I think it’s a bogus argument, because there will be affordable housing in these locations,” he said. “By bringing these developments and the opportunities for different retailers to come in, you’re just putting more [investment] into the local community.”

Hafizzah Omar, who works for a philanthropy-related organization, is part of the anti-gentrification group. She said she’s in favor of building dense housing near transit as a strategy to reduce car dependence. “But what we’re protesting is that there have been people living near the Blue Line for so many years, and these people will be displaced by this coming transit-oriented development.”

Omar argued that a higher quantity of more-affordable units are needed in these buildings. “That’s why we’re targeting the alderman and the developers, because the argument is always that there’s not going to be enough profit if they do something that’s affordable, but that’s not true.” She added that while Somos Logan Square would like to see 50 percent affordable units in these buildings, she understands that’s probably not viable. “More than ten percent, definitely, but we would like to negotiate to like 30 percent.”

“We’re not against density, we’re not against development, and we’re definitely not against people using transit more and driving less,” Omar concluded. “What we want is equitable development, so that no one is getting displaced.”

  • JeffParkNIMBY

    It’s simple supply and demand. If you don’t build new housing AND people still want to move to Logan Square, demand stays the same. This forces the price up.

    If you want to keep it more affordable, take the 10% affordable housing and hopefully the rents will stay lower on existing housing. That’s the best you can do.

    We have the same arguments against ‘density’ in Jeff Park, except demand is not high in the first place so we don’t see prices increasing.

  • I think demand in Jefferson Park for mixed use development around the Jefferson Park Transit Center is indeed high and would probably command relatively high rents. There has been developer interest in that area but the NIMBYs are on high alert (e.g. Long/Argyle and Lawrence and Laramie).

  • JeffParkNIMBY

    You’re probably right. A few years ago I looked in the area and found nothing I wanted available.

  • DanielKH

    I’m definitely in favor of building more housing, especially near transit. But I think those of us who feel that way need to get beyond saying things like “It’s simple supply and demand.” It comes off as callous to people who are genuinely afraid that they might have to leave their homes, or who just care about this stuff but don’t necessarily buy what is, admittedly, a somewhat counterintuitive argument.

  • Daniel has a thoughtful post on this subject on his site City Notes: http://danielkayhertz.com/2015/08/05/inclusionary-zoning-cant-save-logan-square/

    But judging from his “pencil and a napkin” calculations for the piece, he owns some very large napkins.

  • JeffParkNIMBY

    We have similar neighbors. Both want the neighborhood to stay exactly the same. Mine only want single family homes to preserve the ‘character,’ ahem. They want to preserve affordability.

    As Daniel points out, the tactics they use will result in less affordable housing. Which is what my neighbors want and his don’t.

  • ALovelySummersEve

    Mr. Ferro (pictured) is with the Better Bag Co., which donated to Moreno in order to push the plastic bag ordinance they wanted.
    Mr. Suchet doesn’t exist on the internet, but he is carrying a sign with the same flowery handwriting as all the other “pro-Moreno” signs…clearly written by one person.

  • Sorry, typo in the caption — it’s Souchet. As he told me, on the record, he’s a city worker.

    Ah yes, that other diabolic ordinance Moreno sponsored, which forced me to carry my groceries home in a backpack last night.

  • Attrill

    You missed the 40 unit development going in at 2240 N. Milwaukee. I’m not sure of it’s status, but they’ve done the soil testing already.

  • ALovelySummersEve

    “Diabolic” no, badly written with a truck-sized loophole, yes.

  • ALovelySummersEve

    Mr Souchet is a Streets and San worker:
    http://opendatachicago.com/employee.php?id=27272

  • ohsweetnothing

    So his opinion on TOD is therefore invalid? Or are you insinuating that Moreno is a shill for Big Compostable Bag?

  • ohsweetnothing

    Is there a resource that provides some sort of crude calculator on what ROI a developer can expect on various projects? I keep hearing advocates talk about how developers can afford to add far more affordable units and get upset at the amount of luxury unit buildings that are being built but on the other hand:

    1. At the MPC planning exercise meetings for the properties around the Logan Blue Line, even developers that specialized in affordable housing brushed off as financially impossible these proposed projects by affordable housing advocates that were 5-6 stories tall and 50% “affordable” with NO City/State/Fed funding assistance.

    2. There was a lengthy IZ post a long while ago (from a blogger in Seattle) that mentioned that developers aren’t getting over nearly as much as conventional wisdom would have you believe, especially in in-demand neighborhoods. This was because the developer often has to purchase from a seperate landowner and then make a ROI that justifies financing project x. In those scenarios, the seller of the land (which may not have been nearly as valuable when he purchased it for oh let’s say a hardware store that has now sat vacant for years) makes off with the lions share of the profit, and the developer is the one selling his project to the community while still trying to make some $$ hisself.

    A somewhat objective resource would be awesome to figure out to what degree either of these scenarios hold true, especially in Logan Square.

  • Neil Prichard

    The “simple supply and demand” argument seems to be plausible only if rents/housing prices are relatively equal in the area, and that the new housing prices will reflect prevailing rates. Of course, this is not the case, and given the high numbers of high-priced, “market-rate” units(over 500 after subtracting affordable units) within a 6 block area, a new, higher-priced, housing cost will become the norm for everybody. The changes to the TOD ordinance do not represent a beefing-up of, or more robust set of guidelines for these projects. The changes strike me as more of a removal of restrictions guiding the number of units to be built. Reducing the parking ratio, doesn’t ensure less cars, but rather allows the developer to build more units of housing.

  • ohsweetnothing

    I don’t take the “simple supply and demand” argument to mean building more units is the ultimate solution. But NOT building units (or more subtly opposing density) in an area that is already gentrifying will probably just lead to higher costs faster for less people.

    I can’t imagine that’s the desired outcome for either side.

  • ohsweetnothing

    If you go into the residential streets in Logan, you can see 3-4 flats being demo’d and gutted and being turned into SFH. That doesn’t seem to bother the SOMOS crowd nearly as much as it probably should…

  • Bingo. And this is the thing that should probably be restricted most in the zoning code – is that SFH are seemingly allowed in every residential zone.

  • Francine Konieczko

    The flaw in this article is that building dense TOD, will lead landlords not to raise rents forcing out long time residents. Property values & taxes are sky rocketing in Logan Square and landlords have to raise rents in order to afford to pay the property taxes. Those are the facts across the North side of the city, forcing people to the suburbs for more affordable rents.

  • Neil Prichard

    I recall, 20 years ago, in Wicker Park, developers making the same argument about housing density: “If we build more units, rents will go down.” As I watched high-priced, 3 and 6 flat in-building go up in my neighborhood(Ash/Div/Mil), rent increases, evictions, and the general displacement of current residents was swift. The addition of these exclusively high-cost condo/rental units, undeniably pushed the process of gentrification forward. The idea that minimizing or diffusing the density of high-cost housing in a relatively small geographic area would actually increase housing costs/speed-up the process of gentrification is a specious argument. Those of us who like the idea of TOD need to be careful that, in our desire to see these types of projects become a reality, we are not hastening our own displacement.

  • ohsweetnothing

    1. Property values/property taxes are skyrocketing in Logan Square TOD or no TOD. I’m not sure how protesting TOD developments is connected here.

    2. “forcing people to the suburbs” – why are they being “forced” to the suburbs? Are there no other more affordable neighborhoods in Chicago? I think you may be right and I think that you’ve touched on a huge elephant in the room as well.

  • ohsweetnothing

    But that’s kind of my point. I don’t think anyone is seriously arguing that TOD or high density development alone is going to make the rent go DOWN. The rent increases are coming either way.

    I don’t find it specious at all to say that the rent increases and displacement are coming faster if you keep the amount of available supply the same (or decrease it, if we’re being honest) than if you provide new housing supply. There have been several examples indicating as much, I’ll link below when I find some…but Hertz’s blog is a good place to search if you don’t want to wait for me.

  • ohsweetnothing

    Also of note, Moreno was on record as pushing for a stronger ARO ordinance than what was passed by the City. I honestly don’t think some of the advocate groups appreciate the legal envelope he’s pushing with developers by advocating for full 10% on-site (and even beyond that in the case of the “twin towers” development).

  • ALovelySummersEve

    The obvious gist of my comment is that his crowd was hardly “grass roots.” But now that you mention it, he’s a shill for anyone who hands him a dollar.

  • ohsweetnothing

    The obvious gist of my comment is that your point was a non-sequitur at best.

  • I don’t follow you — you wrote “The flaw in this article is that building dense TOD, will lead landlords not to raise rents forcing out long time residents.”

    I wrote: “Arguably, building new units will take some pressure off the housing market. This could reduce the incentive for landlords to raise rents in existing buildings, forcing out lower-income residents.”

    If increased supply slows down the demand, that will help stabilize property values, housing prices, property taxes, and rents. Granted, that’s a big “If.” As stated in the article, adding more upscale housing may also encourage more people to move into the neighborhood.

  • Good catch! Here’s some more info about that development, which would have 31 car spaces: http://chicago.curbed.com/archives/2015/01/08/developer-proposes-40-units-retail-for-milwaukee-avenue.php Steven is updating our chart.

  • Pat

    Bothers the hell out of me in LV. I’m tired of seeing vacant storefronts even at such busy corners like Broadway/Clark/Diversey. The only way to support more local retail is growing the housing base and increasing residents. It’s such a shame that many of the “hot” neighborhoods are losing stock.

  • Attrill

    The SFHs are what are really driving prices in this part of Logan Square. Over a dozen of them have gone up just on one block of Medill and Belden (at Talman) in the last year. They start at $600,000 and higher, but you don’t see anyone protesting those.

  • ohsweetnothing

    Right! And this is actual, literal displacement. As opposed to the knock-on effects of building on a vacant commercial lot.

  • Neil Prichard

    Thanks for the link. I guess the point i’m trying to offer here is: if the new housing being supplied is offered to people for similar prices as the existing housing, then the argument that more supply will reduce prices, is valid. The projected rents/prices of these new units, clearly, are not being set to compete with existing rates. When one adds the high density of units to this reality, the overall effect is to reset, at a higher level, the housing costs of everyone in the immediate area. The folks who can’t come up with the cash for their new housing costs have to move, quickly, making room for new people willing and able to pay higher prices. This is the process, aptly named Gentrification, and does not represent natural ups and downs in a neighborhood’s housing market. It’s a process structured to uproot, and redefine the existing housing market. Along with the Wicker Park example, Gentrification initiatives made the same changes in Bucktown, Lakeview, East Village, Humboldt Park, and to a lesser degree in Ukranian Village. I’m bothered by the fact that a new generation of political leaders/developers are commandeering concepts/terms like sustainability, TOD, green construction, etc. in order to push the aims of Gentrification. They all certainly have the right to do it, we don’t have to buy it.

  • ohsweetnothing

    I appreciate your take, even if I disagree. I guess where I lose you is the “reset, at a higher level, the housing costs of everyone in the immediate area” due to the existence of new, more expensive units in the immediate vicinity.

    I also don’t think Wicker Park/Bucktown/etc are the best examples because in general those areas have been losing units too! It basically looks like as neighborhoods gentrify in Chicago, they LOSE units. We see development and assume more units are being added, but it appears that the opposite is the case. Here’s a relevant post along those lines:

    http://danielkayhertz.com/2015/03/16/unnecessary-population-loss-on-the-north-side-is-a-problem-for-the-whole-city/

  • ohsweetnothing

    I’d also add that none of what I’m saying should be taken as “let developers build as much as they want with no affordability strings attached” either. haha, just to be clear.

  • Neil Prichard

    Again my reasoning of using the Wicker Park example, and why I think its a valid comparison, is because the in-building in Wicker Park, during the nineties, was so intensive, rapid, and locally focused, that a new “going rate” for rents was generated in a relatively short time frame. That rate had little to do with the ratio between the number of housing units added/subtracted and the number of people wanting to live in the neighborhood. The practice of in-building, in essence, created a short-term distortion in the cost of housing that lasted long enough to move a lot of working folk out of the neighborhood. There’s no surprise that there are less units of housing in Wicker Park/Bucktown, especially when you look at how many multi-unit buildings were converted to duplex condos and single-family homes. That kind of development follows the in-building! There are less units of housing now, but at the time of the in-building push, that was not the case.

  • ALovelySummersEve

    Thanks for taking the time to comment then.

  • ohsweetnothing

    “in-building”? Can you clarify what that is? Just want to make sure I’m reading you correctly.

    If I understand you, I think you’re point definitely has some merit and I think there will be some buildings that try and do that for sure. But again, in a gentrifying neighborhood the “going rate” is already increasing. The “going rate” is going to increase at almost any level of supply.

    But to play your argument out to its logical (illogical?) conclusion, are you saying that NOT increasing housing supply is a preferred alternative?
    I mean, Logan has been losing housing stock too. My understanding is that the neighborhood is still losing housing stock today.

  • Francine Konieczko

    Where have you seen this happen anywhere in the city where gentrification is taking place? Rents increase due to property value increases pushing out long time renters who cannot afford the $50 -$100 increases. It is going to happen and is already happening in Logan Square. The question is how fast is it going to make long time homeowners sell to make top dollars on their properties and get out before they cannot afford the taxes anymore. Just look at Wicker Park, Bucktown that is the future of Logan Square.

  • One reason this hasn’t happened elsewhere in the city because other gentrifying neighborhoods have had little increase in housing units, or have even lost significant numbers of units due to multi-units buildings being replaced with single-family homes, etc. Check out Daniel Hertz’s post on this phenomenon: http://danielkayhertz.com/2014/03/21/chicagos-housing-market-is-broken/

  • FGFM

    Those particular storefronts are empty because the landlords are trying to get much higher rents than they were previously.

  • johnstoner

    Let’s not build at all. We can be San Francisco! $4000/month rentals for everyone!

  • Neil Prichard

    What I mean by in-building, in this discussion, is where a high number of a specific housing type is “built into” a relatively small geographic area. While this new housing may not, on balance, add much to the overall number of housing units to a larger area, say all the neighborhoods of Logan Square, or all the neighborhoods of Wicker Park, the in-building does change the nature and number of the housing stock in a smaller, more specific area. To be clear, i’m not suggesting that not increasing the housing in Logan Square is an alternative. I’d just like to try and remind folk that Logan Square is a larger community than the areas nearest the blue-line/Mil Ave. I’d rather see the new units spread out over a larger area, and developed over a longer time frame. As Daniel intoned in his blog, I’m in agreement that some type of CHA involvement could help in keeping these types of projects affordable for both developers and residents. Finally, my points are, for what they’re worth, an attempt to put to rest the question as to whether the projects listed in John’s article are going exacerbate rent increases. These projects, as proposed, are going to price out many residents in the immediate vicinity. I’d like to think TOD could be modeled differently. I truly feel that TOD is an idea that has been sorely missed in this town, but perhaps, there those of us unwilling to trade this version of TOD for the displacement of our selves or our neighbors. Thanks for the chat!

  • Pat

    That was the reason given for Hanigs but I’m not sure if that was the reason for Jamba (which has sense filled) or Vitamin Shoppe leaving. Regardless, the area has plenty of vacant storefront and having the busiest corner sit vacant doesn’t bode well.

  • Not to mention that even 2 units would exceed the maximum density requirement for an RS-3 zone of 2,500sf/DU on the most common 25’x125′ Chicago lot. And once they are reconverted to SFR there is no bringing the units back. Protest that, please.

  • what_eva

    Go take an economics class. Rents don’t rise because taxes go up. Rents rise because there are other renters in the market who will pay the higher rent.

    Even if you have a long time tenant on a below market lease, the landlord isn’t going to let that go on forever. Sure, for $50 or $100 a month, it’s better to keep the current tenant than to risk going a couple months empty. But if that gets to $300, $400, $500 a month below market? What landlord is going to do that? Only a slumlord who’s doing it because it allows them to let maintenance slip because the renter won’t complain on a below market lease.

    I get it, it can totally suck if your neighborhood suddenly becomes “hot”, especially for Logan which has threatened to get hot so many times in the past, but maybe it’s finally happening. Opposing additional supply isn’t going to magically stabilize rents, it’s going to exacerbate the problem. The demand is there. If supply remains the same, rents are going up. Increasing supply via projects like this gives a chance that other rentals in the area will remain flat.

  • FGFM

    I’m not overly concerned about the fate of Lincoln Park commercial real estate.

  • Jeff H

    Jamba has been filled, but who knows when Stan’s Doughnuts will open. It was supposed to be Spring, but that has been blacked out on the window.