Ald. Carlos Ramirez-Rosa (35), one of the sponsors of the Northwest Side Housing Preservation Ordinance, is pictured at a City Council meeting in April 2024. [Don Vincent/The Daily Line]

The City Council zoning committee on Monday approved changes to the Northwest Housing Preservation Ordinance, an anti-gentrification and affordable housing protection law that offers tenants the chance to buy their building before it’s sold to a third party.

Alderpeople on the Committee on Zoning, Landmarks and Building Standards approved the ordinance amendment (O2024-0014256) via a voice vote, with Ald. Anthony Beale (9) voting no. The amendment heads to the full City Council Wednesday, where it could get final approval. 

The Northwest Housing Preservation Ordinance (SO2024-0011001), approved by the council in September, was sponsored by Alds. Daniel La Spata (1), Jessie Fuentes (26), Ruth Cruz (30), Felix Cardona (31), Rossana Rodriguez-Sanchez (33) and Carlos Ramirez-Rosa (35). It included a new pilot program that gives tenants in the area the ability to purchase their multifamily buildings if the owner intends to put it up for sale in an attempt to slow gentrification and protect affordable housing.  

The ordinance also raised the city’s demolition permit surcharge, and in the Predominance of the Block (606) District it disallowed the conversion of apartment buildings into single-family homes in areas that are mostly multifamily buildings and allowed the construction of two-flats by right in single-family home zones. Those other parts of the ordinance went into effect in October. 

Under the original demolition surcharge ordinance, developers in parts of Pilsen and in parts of Logan Square, Humboldt Park, Avondale, Hermosa and West Town must pay a fee in order to demolish a single-family home, two-flat, townhouse or apartment building.   

The Northwest Housing Preservation Ordinance requires that developers in that affected area pay $20,000 per unit or $60,000 per building to demolish a multifamily building, whichever amount is higher.  

After the measure passed, the Chicago Association of REALTORS approached the co-sponsors of the ordinance and “initiated a collaborative process” that resulted in “reasonable changes,” Ramirez-Rosa said during the committee meeting. 

The amended ordinance would sunset the Tenant Opportunity to Purchase Pilot Program on Dec. 31, 2029, the same day the demolition surcharge will sunset. Enforcement of the pilot would also be delayed until March after it had been previously delayed in November.

Ramirez-Rosa said the delayed enforcement will allow the REALTORS association to provide information to their members at a planned February meeting. 

Under the pilot program, owners will need to tell tenants of their intent to sell a building at least 30 days in advance for buildings with four or fewer units and at least 60 days in advance for buildings with five or more units. After receiving a notice of sale to indicate the owner has found an outside buyer, tenants have a required window by which they can inform the property owner of their intent to match the third-party’s purchase offer and another window to secure financing and conduct due diligence before closing. 

The ordinance amendment would mandate that a tenant group in a building with four or fewer units provide a pre-approval from a lender to the owner and in buildings with five or more units provide a letter of intent from a lender or community organization in order to exercise the right of first refusal.  

Additionally, the amendment gives the property owner the right to ask their tenants if they plan to waive their right of first refusal after the notice of intent-to-sell window. The amendment also now states the right of first refusal would only be renewed with a new buyer and a price drop of at least 10 percent.

Michael Glasser, president of the Neighborhood Building Owners Alliance of Chicago, said during public comment that while the organization appreciated some of the proposed changes, the ordinance would still hurt building owners.

“The amendments, as appreciative and as much of an improvement as they are, is like putting lipstick on a pig,” Glasser said, adding that he was troubled by what he called a lack of vetting and seeking of expert and stakeholder input prior to the City Council’s approval of the ordinance.