Wonkblog: What happens when housing for the poor is remodeled as luxury studios

CHICAGO For years, this brown-brick building near Wrigley Field housed people who had nowhere else to go. It had peeling walls and broken smoke detectors. But its tiny one-room apartments offered homes to residents too poor for a one-bedroom, too risky to pass a credit check, too vulnerable on the perpetual edge of homelessness to sign a one-year lease.

Today, from the outside, the building looks the same: six stories, with tall windows and an elaborately carved entryway that still announces the property by its pre-World War II name, the Hotel Carlos. But it now contains studios remodeled with stainless steel appliances, granite countertops and hardwood floors. Rent reaches $1,125 a month. The ad in the window promises vintage charm.

In buildings like this one on Chicagos North Side, the shrinking pool of affordable housing a problem facing many thriving cities is playing out in a particularly vividway. Often, gentrification displaces the poor through less directmeans: Wealthier residents move in, businesses catering to them follow, property values rise, the economics of a neighborhood change, and longtime residents are priced out. But here and in other former single room occupancy hotels in Chicago the displacement is much more literal.

It is one unit for one unit, one single, living alone, for another single, living alone. Young professionals are moving in to occupy the very same and very small spaces recently home to people living on less than $1,000 a month. In their remodeled homes, sometimes as small as 250 square feet, what was once deteriorating becomes vintage.

When the building near Wrigley was sold to a developer in 2011, the low-income residents in its 130 units had to move out. And then something similar happened at the Abbott Hotel on Belmont. And the Norman on Wilson, and the Chateau on Broadway, and the Lawrence House in Uptown.

Its like a systematic taking over of where poor people live, says Adelaide Meyers, a soft-spoken 47-year-old woman who had to leave the Norman. She now lives in an apartment, where her father had to co-sign the lease, on the far north side of the city. The crime is worse in that part of town.

For Chicago, the debate over these buildings captures a larger tension that is simultaneously playing out in parts of Los Angeles and New York and Washington: The new owners and tenants moving in bring higher tax dollars, capital to revive old buildings and momentum to draw even more young professionals. But those benefits have come at a cost. Now Chicago is trying to save what amounts to 6,000 remaining SRO units, a small fraction of what once existed in the city as a housing stock of last resort for the poor.

The city council passed an ordinance today aimed at protecting the buildings and their residents. Developers and building owners have argued, though, that the new law will unfairly expect a few property owners in the city to take responsibility for a problem Chicago's shortage of affordable housing far beyond their control.

In an unfortunate twist of geography, many of the remaining SROs in Chicago happen to be located in lakefront neighborhoods on the North Side that are now in vogue. Since 2011, developers there have bought more than 2,000 low-income units for conversion into high-end apartments where the rent costs twice as much.

The properties arent simply demolished, cleared for wholesales redevelopment, because while they may be crumbling on the inside, they are often beautiful from the street, wrapped in art deco details or stone filigree. For new residents, these places embody an alternative to yuppie Chicago: historic architecture instead of cookie-cutter construction, authentic neighborhoods instead of ritzy ones.

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Wonkblog: What happens when housing for the poor is remodeled as luxury studios