How Gentrification is Affecting Housing Prices in Chicago
When a formerly depressed neighborhood suddenly becomes hot, rapid growth can transform an area almost overnight. But it can also bring expensive growing pains. Is gentrification making Chicago unaffordable?
Gentrification can happen quickly. As higher-income buyers move into a growing neighborhood, the cost of living goes up. Rents typically escalate, forcing poor and working-class families to move elsewhere.
For many residents, the effects of gentrification can quickly become a politically-charged issue. The question is whether the benefits outweigh the drawbacks.
How Gentrification Can Help Homeowners
As property values rise, homeowners often find themselves stuck paying ever-higher property taxes. Those who can’t afford the taxes must often sell their homes. But there is an upside: the opportunity to profit handsomely from a higher selling price.
Homeowners who stick around, meanwhile, can enjoy the economic benefits of gentrification, including new shopping, new restaurants, new job opportunities, better schools, and lower crime rates.
Gentrification in Chicago
Between 2013 and 2016, property values increased 13.8 percent in the gentrified neighborhoods east of The 606, a popular bike and pedestrian trail built on a decommissioned elevated railroad line.
In March 2017, a bill was introduced to slow down the gentrification west of the trail, where housing prices rose by 48.2 percent during the same period. If passed, the bill would raise the demolition fee on any property being torn down to make way for a new high-end property.
Top 10 Gentrifying Cities in the USA
Nationwide, only about five percent of urban tracts that could be gentrified are actually going that route, according to a 2016 study from the Denver Office of Economic Development. But in the top gentrifying cities, new higher-income residents are displacing the existing lower-income residents at a much more rapid pace.
The top 10 fastest-gentrifying cities are:
- Washington D.C.
- San Diego, CA
- NYC, NY
- Albuquerque, NM
- Atlanta, GA
- Baltimore, MD
- Portland, OR
- Pittsburgh, PA
- Seattle, WA
- Philadelphia, PA
How to Buy in a Gentrified Neighborhood of Chicago (Without Spending a Fortune)
Without a doubt, gentrification is raising home values across parts of Chicago, and finding a bargain isn’t easy. By the time a neighborhood starts heating up, real estate prices are already shooting skyward. But that doesn’t mean it’s too late to buy a home at an affordable price.
HomeVestors (the “We Buy Ugly Houses” company) buys homes in all areas of the city, renovates them, and then sells them at the best possible prices. No matter which neighborhood is next in line for gentrification, you can still find a great home to buy.
*Updated June 2020.