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Last week, the Chicago City Council passed an amendment to the Northwest Side Housing Preservation Ordinance. Thanks to the efforts of the Chicago Association of Realtors, this amendment contains changes that make the ordinance somewhat less bad.
This rushed legislation should be more aptly named the Northwest Side Housing Prevention Ordinance (to reflect its actual impact). The sponsors of this bill Carlos Rosa (35th) & Jessie Fuentes (26th) have a long history of simply attacking the housing industry for political points. This law passed with blinding speed and no input from those who actually provide housing.
As a housing provider in the 35th ward I am used to Rosa attempting to derail market housing of any real substance being built. I am a longstanding native and have invested in my neighborhood before his election, so I can say that my ability to stay one step ahead has allowed me to succeed where he has driven out others who might actually build new housing.
But the real loser here is Chicago. As we face a budget shortfall of nearly 1 billion dollars and struggle to avoid yet ANOTHER property tax increase, Rosa and Fuentes have now successfully passed a law to redline a six square mile section of Chicago with additional fees and restrictions to further discourage supply in an area of the city where housing is really in demand. Indeed, this is not a 1st ward or 35th ward issue…this will impact Chicago with reduced housing stock, reduced tax revenues, fewer jobs and fewer customers for local businesses—beyond any one local ward boundary.
First, we have an increase in the demolition fee. All housing has a lifecycle and a $60,000 fee— actually a tax—is going to be passed on to the consumer. This kind of tax is hidden and pushed by the same people who pushed the defeated Bring Chicago Home Tax.
Not satisfied with just a tax increase, the Northwest Side Ordinance also provides tenants a right of first refusal to tenants on the sale of their apartment building, or even a condo that they are renting. The onerous process stipulated by this ordinance can tie up a sale of a housing building and open small mom and pop owners to very expensive liability. Nobody who wants to sell a building would not sell to their tenant (if only to save a commission). It defies common sense.
Every law, regulation or piece of red tape is an attempt to discourage one thing. Change…and I would say change is the one thing that Chicago desperately needs right now. More housing, more customers and more tax revenue…not from increased taxes, but increased numbers of people calling Chicago home.
Nicholas Katsafados is a housing provider in the 35th ward and a board member of the NBOA PAC.
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