LOGAN SQUARE -- Northwest Side alderpeople made changes Wednesday to a portion of the hotly debated anti-gentrification ordinance that gives renters the right of first refusal to buy their building if it goes on sale, providing clearer rules for tenants and delaying the start of the program until March.
The Northwest Side Housing Preservation Ordinance, which passed overwhelmingly in September after years of community action and went into effect in October, protects two-, three- and four-flat apartment buildings in Logan Square, Avondale, Humboldt Park and parts of West Town in order to help longtime residents stay in their homes.
But the city has delayed enforcing the tenant right-of-first-refusal portion of the ordinance in order to develop clearer rules for implementing it, city officials said.
The delay comes after the Chicago Association of Realtors, which represents 16,000 local real estate agents and largely opposed the ordinance, raised concerns that the tenant opportunity program would delay housing transactions, add further documentation and financial constraints to the selling process and create more challenges in the real estate market, said Anthony Hebron, a spokesperson with Illinois Realtors.
The changes provide more detailed guidance for tenants and sellers on the right-of-first-refusal waiver, making the rules fairer for both sides, alderpeople and realtor leaders said. Council members and realtors met and agreed on revisions earlier this month, said the bill's leading sponsor, Ald. Carlos Ramirez-Rosa (35th).
Under the original ordinance, tenants must form an association and match any existing offers to exercise their right of first refusal. Under the changes, tenants must also provide a pre-approval letter from a lender to purchase a building with four or fewer units, or a letter of intent from a lender or community organization for a building with five or more units, Ramirez-Rosa said.
The amendments, which were introduced to City Council last week and passed Wednesday, add a Dec. 31, 2029 expiration date to the pilot program. The Department of Housing will then be required to conduct a study to help City Council determine how to proceed with the program, alderpeople said.
The changes will take effect March 1. All other provisions of the ordinance, including a higher demolition surcharge, have already been in effect and enforced since Oct. 9, officials said.
"We are all committed to stabilizing our communities, which means ensuring renters and owners continue to be able to remain, thrive, and strengthen all of our neighborhoods," Ald. Jessie Fuentes (26th) said in a statement. The ordinance "is already working to protect our communities from displacements, and these sensible amendments will help ensure an effective implementation of the tenant opportunity to purchase provisions in the new year."
Some people are also already using the tenant pilot program, even though it's not technically being enforced, Ramirez-Rosa said.
"We've already heard from sellers and from tenants that they're receiving notices under the provisions of this [tenant opportunity to purchase]," said Ramirez-Rosa. "The only thing the Department of Housing did was say, 'We're not going to enforce the rules -- meaning if you break the rule, we're not going to ding you.'"
Housing organizers with Logan Square community group Palenque LSNA, who helped write the ordinance and have worked on the policy since 2015, welcomed the changes to the right of first refusal provision. The new rules add "clarity for all parties involved and will make the policy more likely to succeed," said housing director Christian Diaz.
The amendments also include increasing the percentage of tenants required to waive their right from 25 percent to 50 percent, meaning more tenants would have to agree to waive their rights than under the previous rules. This addition also makes the amendment stronger, Diaz said.
"We can wait a couple months before implementation in order to get this right, as we have been working on this policy since 2015," he said in a statement. "What matters is that we can plan for a future where tenants can organize to own their buildings."
Those against the ordinance, including the Neighborhood Building Owners Alliance and the realtor group, have said that although the new guidelines add some clarity to the tenant opportunity portion of the law they still don't totally buy in to the measure.
"While we do not fully support the ordinance, and remain concerned about the unintended consequences, we appreciate the good-faith negotiations and recognize the agreements reached on changes that impact the vitality of homeowners and residents affected by this new policy," Erika Villegas, president of the Chicago Association of Realtors, said in a statement.