"Everywhere I look they're building something new, but what good is that if we aren't here to take advantage of it? This is my neighborhood and I'm here to stay," says a 25-year resident of West Town, a gentrifying community in Chicago. Gentrification evokes images of affluent households and upscale cafés involuntarily displacing low-income families and mom-and-pop stores. Although this can and does happen, gentrification can also create mixed-income neighborhoods with better quality housing, stores, and services. West Town's response to gentrification suggests effective strategies for building revitalized mixed-income communities, expanding affordable housing opportunities, and maintaining some of the original neighborhood flavor.

West Town began a process of neighborhood change from an ethnic European, working-class community in the 1950s and 1960s to a predominantly Latino, low-income area of disinvestment in the 1970s and 1980s. Since the 1990s this community has experienced gentrification pressures as higher income households buy, move in, and fix up houses. Between 1990 and 2000, the non-Latino White population increased from 27 to 39 percent as their share of new mortgage loans made in West Town rose from 57 to 78 percent. In contrast, the Latino population decreased from 59 to 47 percent and their share of new mortgages fell from 35 to 9 percent. West Town was one of five Chicago communities in which the median value of a single-family home increased more than 200 percent. Planners attribute this trend to West Town's appeal as a place to live—its close proximity to downtown, excellent public transportation, and easy highway access.

"We can't stop gentrification but we can slow it down and stabilize communities like West Town, "asserts Joy Aruguete, executive director of the Bickerdike Redevelopment Corporation (BRC), a Chicago nonprofit organization. Aruguete adds that people should not be asked to forfeit quality housing and vibrant businesses for fear of gentrification. BRC had adopted many strategies to keep West Town a mixed-income community. Central to BRC's philosophy is involving residents in all the organization's activities and educating them about their housing options. This includes making homeowners aware of property tax deferrals and rehabilitation loans, educating owners who want to sell their homes to ensure they get full value, and informing tenants about their legal rights. BRC also advocates for property tax relief, develops affordable owner-occupied and rental housing, and manages rental properties.

Assistance for longtime homeowners. In West Town higher property taxes can force some families to move out. To help them stay, BRC advocates for property tax relief and constantly works with homeowners to monitor and appeal rising assessments. West Town homeowners, protesting higher assessments, recently filed 130 complaints with the assessor's office and in every case their assessments were lowered.

According to Aruguete, Chicago offers property tax relief to help qualifying homeowners stay in their homes. The Chicago Homeowners Assistance Program allows families in revitalizing areas to defer incremental tax increases until they sell their houses. In June Cook County passed an ordinance giving additional relief to longtime homeowners in certain neighborhoods—property tax increases will not exceed the average citywide median increase. An additional exemption of up to $2,500 is available to senior citizens.

Recognizing the importance of maintaining properties, BRC helps low- and moderate-income families access low-interest improvement grants and loans available in gentrifying communities. Not only is repayment deferred until resale but also the rising assessments and taxes that typically follow home improvements.

Affordable homeownership. BRC has developed and marketed affordable homes to local residents. "As a community developer, we are committed to ensuring that BRC's units will go to people who already live in the community," says Aruguete. One innovative BRC strategy is building a few homes with accessory units in each new development. A new BRC development includes 14 single-family homes and 3 two-flat houses in which the owner lives in one unit and rents out the other. This generates income that, in turn, helps the owner pay the mortgage, taxes, and maintenance. Accessory units make it possible for a lower income person to afford a new house that otherwise would be out of reach in gentrifying areas like West Town.

BRC limited equity cooperatives (LECs) provide another affordable homeownership option. In cooperatives (co-ops) each resident owns a share of stock in the corporation that is made up of all of the residents. In LECs the purchase price of individual shares is very low, so the owner does not need a mortgage for his unit. Since a formula restricts the value one can obtain for his or her stock at sale, the unit stays affordable for future residents. BRC converted a federally subsidized, 51-unit complex into an LEC, recently closed on financing for a second, 31-unit LEC, and has applied for financing for a third, 87-unit LEC.

Aruguete stresses the need for CDC creativity in developing affordable housing. Chicago's land-value lien program, developed by BRC and the city, enables BRC to write down land costs and build new affordable houses. Under this program BRC does not reimburse the city for vacant building lots, provided BRC sells the house to an income-eligible family. Instead, a 30-year lien for the land cost attaches to the deed. If the owner, in turn, sells the house to another income-eligible family, the lien remains for the balance of the 30 years. Within a historic area of West Town, BRC was able to buy a vacant city lot, write down $20,000 in land costs, and build a new house that sold for $109,000. Houses on either side of the BRC home sold for more than $1 million each. Although the new owner has received many offers to sell the house at a sizeable profit, he has refused because he wants to stay in this house in this community.

Keeping rents affordable. Chicago faces a critical shortage of apartments. BRC has developed 743 affordable rental units that it manages along with 115 units owned by another CDC. Therefore, West Town residents look to nonprofits such as BRC to help provide affordable rental units. Ten years ago Chicago established the Low-Income Housing Trust Fund, which provides rental subsidies to landlords renting to income-eligible families. Owners can apply for subsidies for one-third of the units in a building. According to Aruguete all the available Trust rent subsidy funds are committed. It is unlikely, therefore, that new landlords can get into the program now unless funding increases.

Strategies to help businesses stay. It has been difficult in West Town to develop a retail sector catering to more affluent households. When many small industries operating in West Town closed in recent years, these buildings were redeveloped as upscale residential lofts. According to the Voorhees Center at the University of Illinois at Chicago, in the 1990s West Town saw a significant increase in new businesses, but they often are next door to traditional businesses serving the longtime ethnic White and Latino residents.

BRC also works to keep longtime businesses in West Town. Recently, when an intense code-enforcement campaign threatened to close several local stores, BRC, working with local business groups, successfully prevailed upon the city to offer facade-improvement loans to local businesses in gentrifying areas. As a result, these businesses are still operating, and West Town's commercial strip maintains a mix of original and newer stores.

When considering support to a new business, BRC asks the new firm if it will hire West Town residents, pay decent wages, and provide goods and services that residents will buy and use. An economic force itself, BRC's Humboldt Construction Company began in the 1980s doing only minor repair jobs but now competes as a general contractor for multimillion-dollar contracts. Seventy-five percent of workers on a typical project are residents of the neighborhood. Approximately 90 percent of BRC's staff of 55 live in West Town and the other communities BRC serves.

Gentrification in West Town mirrors what is happening in many cities across the country. Nonprofit corporations such as BRC are working with the private and public sectors to revitalize communities. However, when revitalizing neighborhoods start gentrifying, BRC advocates equitable development—maintaining economically and socially diverse communities while minimizing transition costs that otherwise fall unfairly on lower income residents. In West Town, BRC is dedicated to preserving the ethnic and cultural character of the neighborhood while improving its economic condition. For its work BRC has been honored as Chicago's Nonprofit Neighborhood Development Group of the Year and has received numerous Chicago community development awards.

For more information, contact: Bickerdike Redevelopment Corporation, 2550 West North Avenue, Chicago, IL 60647, (773) 278-5669, (773) 278-5673 (fax), www.indepsec.org/pathfinder/innovations/econ_dev/.

Or see: "Gentrification in West Town: Contested Ground," The Natalie P. Voorhees Center for Neighborhood and Community Improvement, 2001.

"Development Without Displacement," The Natalie P. Voorhees Center for Neighborhood and Community Improvement, 1995.