Latest / Built Different Chicago / Does Investment Lead to Gentrification?
Transcript
- speaker-0: Welcome to Build Different Chicago, a podcast where we explore how neighborhoods and communities get built, what makes them evolve, and what that means for all of us. I'm Stacey Young from Community Investment Corporation. speaker-1: And I'm Megan Hart from Lisp, Illinois. Each episode, we'll dig into one big question about community development. speaker-0: Today we're asking, does investment lead to gentrification? Megan, why did you choose that topic? speaker-1: Stacey, I chose this topic because everybody talks about gentrification in some way or another. And I just feel like we have to get to the heart of is there gentrification, what is gentrification, and what's not gentrification? So I figured this would be something that you and I could talk about. speaker-0: ⁓ that's funny. I thought you chose it because you know I can't even stand to say the word because it's so ill defined. And people throw it around indiscriminately. And when we don't all have a common understanding, especially of such an important neighborhood dynamic, it's frustrating because people sort of use it in different ways and then people pick up different meanings. So I'm I I'm I am interested in in in this podcast today as a result. speaker-1: I agree. I th like sometimes I think people they sort of use it as a weapon or they use it as like a to stall opportunities coming to neighborhoods. speaker-0: Right. As if, you know, one day there's one investment in the neighborhood and then the next day everybody has to move out. And I do think in some neighborhoods there has been displacement of longtime residents. And that is a problem. So I do not mean to make that ⁓ less of an issue. It's a v that's a very important issue. But again, because it's such a vague term, and I I like how you said that, it gets weaponized. Yeah. ⁓ People then get confused, like what causes it and and what it looks like on the ground. speaker-1: Yeah, I mean, you know, you can be called a gentrifier or one who supports gentrification, but that's not really what people are supporting, you know, in some cases. Right. So to dig into our questions about gentrification, this is one person I called, which was my friend, ⁓ and the alderman Walter Burnett. Do you know Walter Burnett? Are you I know. That's like so silly, but speaker-0: I mean if you live in Chicago, you know Walter Burnett. And of course you and I worked in the mayor's office when he was alderman too. He's ⁓ he's an icon. speaker-1: Yeah, so for people not in Chicago, Walter served as an alderman, which is what we call our city council members, for about thirty years. He represented a ward that included Goose Island, West Loop, East Garfield Park, near North Side. These neighborhoods do span like the full i income spectrum of our city and have changed a lot over the past decades. I mean it used to be public housing and the west side and now it's transformed into what I think is really a good example of balanced development with a mix of incomes today. speaker-0: Yeah, it's such a it it has always been such a diverse ward. So many different kinds of neighborhoods and different kinds of constituents. So it's been interesting to see how that ward and all those different neighborhoods have such different characters have evolved. speaker-1: Yeah, right. So I talked to him about this thing called the Starbucks. speaker-0: effect. Now maybe I've heard of that. What is it? What what does that mean? speaker-1: Well, let me play our conversation and you'll find out. How you doing? It's Megan Hurt from Lit. speaker-2: Hey Megan, how you doing? I'm I'm good, thank God. speaker-1: Good, I'm glad to hear that. Hey, remember when you used to tell me about Starbucks as an indicator in communities? speaker-2: Well, I used to say when Starbucks comes to the neighborhood, the neighborhood is is pretty gently. speaker-1: So there's this study that actually came out that talks about the Starbucks effect and it went about looking at property values within a quarter mile of Starbucks and between ninety seven and twenty fourteen property values increased by like ninety six percent over other places that increased about half of that percentage. And so I just one wanted to say you're right, but two also what do you have to say about speaker-2: Yeah, like I think, you know, the the crazy thing is when folks see a Starbucks in the community, they think the community is like there, right? One of the Starbucks that I was referring to back then was the one over in Cabrini Dream in the near north area. Yeah. ⁓ after the public housing came down and then the mixed income came up, property values came up all over the place. And then the Starbucks came, more population came. It had a positive effect on the community 'cause a lot of community folks got jobs at the Starbucks 'cause at that time myself and and Mayor Dave's administration were trying to do holistic kind of development where you don't just tear down the buildings, you bring everything else with the community that they need. New parks, new schools, new libraries, grocery stores, so on and so forth. And then the Starbucks came, the market rate investment came, ⁓ and it balanced out. You're trying to do a balanced community. So speaker-1: So Starbucks can bring opportunity if leadership and community are organized around it to make sure it doesn't tip towards gentrification. speaker-2: Definitely. When I see a Starbucks, it g it gives me motivation to try to make sure I get more affordable housing. In the neighborhood, right? To balance it out. And and and this is my thing. I've never been one to hate hate gentrification or hate new things coming to the neighborhood. I think we need new things to come to the neighborhood. Right? The people that move in those buildings able to get jobs. You know what I'm saying? So it's ⁓ so it goes hand in hand. You know, as long as it's not just all one way, I think it w if it's all one way it becomes detrimental. But if you mix it up and and and and you have a focus on making sure things are balanced, I think it's a good thing. speaker-1: Totally agree. And I think your leadership made sure those things happen in those really moving markets. So thanks so much for taking the call. I really appreciate it. So what do you think, Stacey? speaker-2: Appreciate it. No problem. speaker-0: Well, I think it's interesting. And I do think for a Starbucks to come in, it feels like it it is indeed a marker. And for some of the neighborhoods that you and I talk about and work in in those areas that really need investment, you just don't see those Starbucks in those neighborhoods. So I do think it's an an it's an interesting marker. I'm not sure I exactly believe it. So I still want to hear more about it. speaker-1: Yeah, I agree. ⁓ but that leads me to introducing our guest because this conversation about gentrification and what development looks like, could look like in communities that actually could use investment has been a conversation I've been having with Raul over time since I started at Lisc, maybe even before then. But more about Raul, Raul Raimundo. He's our guest for today. And Raul is the founder of the Resurrection Project, the original founder and has been there thirty five years. But Raul has been working not only in the Pilson community, but in a number of Latino communities within Chicago and then nationally around issues about affordability and community development and immigration and you name it. Raul has been not just involved in it, but like a linchpin in moving advocacy forward and really driving it into his communities. I feel like speaker-0: ⁓ Raul is an icon, you know, TRP is legend, not just in Chicago, but across the country, ⁓ because of Raul's leadership. And so it's just fabulous that he agreed to join us today. I'm so excited. speaker-3: Thank you both. I'm pleasure having colleagues ⁓ girl girl girl me, if you will. speaker-1: I we're gonna get educated by you. That's right. And I know this is I'm gonna air quote it a special word for you, but really we we wanna talk about what does gentrification mean to you? speaker-3: I look forward to the conversation. Well, first of all, I don't even think about the word gentrification as we do work in development. And that's because I never thought of development from the traditional sense bricks and mortar stuff. To me, investing in community is about investing in people. And over time, if you're investing in people, you can deal with the challenges that come along the way. I I I recall getting started here, the word gentrification was never really part of our lingo. It was about How do we invest in the community? Because at the time there was very little investment going on. And I think that's important because I don't care what community you live in in the country, there are tangible assets and then non-tangible assets. It's the geographic location of the community, the churches, institutions, the non-tangible assets equally important. The culture, the language, the values, the spirit of the community. And that's what really is important because often people get they get fearful of something that they have no control over rather than focusing on things that it can control. speaker-1: That's a that's a great point. I'm I'm really curious about when people when they talk about Pilsen they say gentrification or gentrified. What was it like in the nineties when you started the resurrection project? speaker-3: So Pilson has always been an immigrant community. You know, I tell people I've been a fly in the world in the early 1900s when 12 different languages were spoken. It was founded by Eastern Europeans. The word Pilsen is a Czechoslovakian word. It wasn't until the late 60s that it became a Mexican immigrant community. But it was a community that was intransient because it was growing very fast. Pilsen, I think, along with the Southeast Chicago, were the port of entry for the Mexican immigrant community. And it was growing very fast and very transient and with it a lot of challenges. Gang, safety, deteriorating housing stock or lack of investment and so forth. I mean, we didn't even have a high school in the early seventies. The high school I went to, beneath the Whites High School, didn't open until ⁓ late seventies, and that was because the community fought for it. speaker-1: Go Eagles. Yeah. Absolutely. speaker-3: Absolutely. And our organization began again not with a housing strategy or a bricks and mortar strategy. It began with organizing people about what are their self-interests. And their immediate self-interest was dealing with issues of safety, issues of violence, ⁓ community cleanliness. And people wanted to stay in the community. The challenge was that ⁓ there wasn't a pathway for staying in the community. People wanted to leave because it was in Transient. But when we began to talk about the tangible assets of the community, people say, Yeah, this is a nice community to stay in. Why not? We're close to downtown. We have access to transportation. The other churches are vibrant, right? speaker-1: So one question on that. Is it in those transitions where one group is moving in or one group is moving out where like Pilson was seen as an opportunity for other folks to move in? Like how did that how did the movement towards development happen? speaker-3: Well, traditionally, you know, immigrants have moved into communities. The spirit of the immigrant ⁓ movement, if you will, is to try to better themselves and in doing so bettering their communities. And it happened here when there was that transition from folks leaving, Eastern Europeans leaving in the sixties and then the Mexican immigrant moving into the neighborhood. But again, ⁓ people wanted to stay in the community, they just didn't know how. And we began by looking at ways that folks can benefit from opportunities and the first thing we needed to do was educate people on building wealth for themselves. First thing you need to do to build wealth in a community is stop it from being sucked out. speaker-0: ⁓ that's so interesting. That's so speaker-3: Because in vulnerable communities there's always predatorists and there's always people who want to take advantage of communities. And so that was the case back then that we needed to create financial literacy programs, financial planning programs that eventually led to people wanting to buy a home in the community. speaker-0: This is above and beyond what we think about, you know, an investment in, you know, a storefront, which is part of it. But it's a such a such a more holistic view than people generally think about investment. speaker-3: Yeah. And to get to the question of gentrification, that's how you prevent it and that's how you create what I often refer to balance development, right? Because if people know how to buy a home correctly and prepare themselves, they're gonna be long term community owners. You know, what they're not just buying a piece of property, they're buying part of the community. Right? Mm hmm. And so now you can't control things, right? You know, ⁓ the the evolution of communities are ever changing. When we started investing in people that led to investing in Berkshire Mortar opportunities, others began to take notice. And then you had opportunities for franchises to discover the neighborhood and come in. You know? And now we do. ⁓ right. And so we've gone from a situation where there was very little investment and no investment going on to now the fear of gentrification and lots of investment going on. And so our challenge is how do you create balanced development by doubling down on things that can create affordability and stability in the neighborhood and long term. And I will tell you a story. ⁓ I was sitting at our local restaurant, Casa del Pueblo, and ⁓ Signora Martinez came up to my table as I was having breakfast. Señor Raimundo, señor Raimundo, acabo de pagar mi casa. This was one of the new homes that we built for this. Family almost 30 years ago, about a hundred thousand dollars to bill. The house today is worth over four hundred thousand dollars. Wow. And she stayed with the same bank for 30 years, never refinanced, paid her home, and's got generational wealth. Right? And so we actually recently did a study ⁓ about all the homes that we've built in the neighborhood. speaker-1: Wow. That's fantastic. speaker-3: And seventy percent still live in those neighborhoods. So that's long and that's what was our goal. Long term stability, long term home ownership. You focus on the things you can control. And that's speaker-1: Wow. Yeah, that's great. speaker-0: Amazing. speaker-1: One of the one of the things I think TRP has also done a great job of is advocating for affordable rental housing, making sure that development happens too, because you can't always control the rental market if you don't have control of the properties. But I have a question for you, and this is an assumption, so tell me tell me if this is accurate. Is it the proximity of Pilson to downtown that makes it ⁓ an interesting place for folks with with more income to move into? And so this is a two bar question, for far south or like other places where there is a lot of land or there's a lot of available housing that could be purchased relatively cheaper than the north side, people say, well, that's never gonna gentrify. The market's never gonna come there. speaker-3: I had an interesting conversation recently with someone about this, that the reason for Pilson and the surrounding communities close to downtown happening is because often the investment came from downtown into the outer communities, right? Versus, you know, coming in from the communities into downtown. So the right investment going into the outer communities is critical. Right? So that Those outer communities, the second, third ring communities from downtown. Right. ⁓ it I that's where I think the focus needs to be. Downtown is gonna continue to be downtown. But I think in the past, often too much investment went to replicate investments in and around downtown. And you you have to have strong cities with a strong downtown. So I don't disagree with that. So the the first ring communities like Pilson. benefited from downtown getting expensive, then you could begin to see sort of ⁓ the next ring ⁓ of of individuals wanting to some some more affordability, right? But that's again because strategies have been from downtown outwards versus from from the the outside inwards. Right. speaker-1: Right. speaker-0: Yeah. Yeah. So ⁓ Raul, I have a question for you about that outer ring. So you're saying the downtown sort of spreading the investment out from those inner rings. And some people say that, you know, in those outer, further out neighborhoods that still need investment, those will never quote unquote gentrify. But I I like your take because to me, there isn't a beginning and an end. You know, this idea like gentrifying is some kind of thing that you hit as opposed to those neighborhoods need investment. So let's figure out strategies to bring investment to those neighborhoods as opposed to framing this as but investment will eventually lead to something bad. And so I d I'm just curious about your take on that. speaker-3: Yeah, well first of all, I I I don't I don't believe that development or investment is ever is ever bad, particularly in neighborhoods that desperately need it. And and the reality is that often you have to really broaden your conversations and relations with people. Because what I've learned in not just in this community but in others is that often there's a smaller group that is a very loud group, but the silent majority are more open to opportunities and investment because they're the ones that are struggling. And sometimes you have ⁓ quote unquote outside agitators you know trying to speak for the community as well. So I think all of that needs to be taken into consideration ⁓ as well. And then in terms of investment, I'll tell you ⁓ just a couple of stories. ⁓ after the financial crisis, not long afterwards you saw reports of the economy booming, the city, the country, we went through this economic cycle and boo. But guess what? Some of these neighborhoods remained the same. speaker-0: Mm-hmm. Yeah. speaker-1: Mm-hmm. speaker-3: You had a investment going on everywhere else except in these communities, perhaps. Right. So here we are now to going through another existential crisis coming out of the COVID crisis. And again, these communities remain challenged. So something has to change, both investing in people and in bricks and mortar. It needs to be the right strategy for it. I just this morning came from Pullman area where we're part of a larger effort building homes there. This this community is need of investing in homes. There was no talk about gentrification. There was talk about building opportunities for families to have a safe, decent place to raise a family. Right. speaker-1: How do communities get in the game to get development happening? Either so they're not receiving something they didn't want or that they're attracting something that they do want. speaker-3: I think ⁓ communities need to be well organized and prepare themselves in a way that they are able to invest in their own community. That leverages other things, right? Lisc understands that ⁓ community developers are going to be in the neighborhood for many long periods, right? Right. This is the tension because gentrification often occurs with parachute developers. And what I that's I make reference to them because they're looking for the deal. They're gonna go in, complete the deal and walk away. You know speaker-1: Not to call anyone out, but did you see parachute developers coming into Pilson? speaker-3: ⁓ there are some, yeah. Absolutely. And you could s and you can tell often over the years their neglect, if you will. Yeah. And so community developers, I mean, thirty years later, we're still getting calls from those families that help we help buy homes. How do we deal with my property taxes? How do I deal with my insurance? How do I deal with it's because we're here. speaker-1: Yeah, fair. speaker-0: Sounds like your investment I just keep saying this because I love it, is that your investment in people is the hedge against gentrification, basically, right? You've invested in people for the long term. You've educated them to be sustainable homeowners. You've helped them you know, learn about financial literacy. And so I just I keep coming back to, you know, the sustainability based on the longevity of TRP, but also your investment in the people in the community. speaker-3: Yeah, I think that's key. You you can't predict the future, but certainly if you could teach people what the opportunities are and and and and so forth. You know, many of these families who who stayed in a neighborhood have been building wealth for themselves. You know, some of the families who left early, I get caught I get calls from friends. I can't afford anything in Pilston right now. ⁓ are you still in a house there? Yeah. I say, Well, figure out a way to come back, right? There are still opportunities. speaker-1: That leads me to something that you said to me, ⁓ I don't even know when, years ago. You said you like looked me right in the face and you're like, We need development happening all over the place to take pressure off of Pilson and other places. And I know you've and TRP has looked at back of the yards and other other communities that might be opportunities. Can you talk a bit about that? speaker-3: Yes, the city has, you know, over thirty thousand vacant lots. There are communities that have yet to ⁓ turn the corner or get reinvested and so forth. So unfortunately, private investment often replicates their investment in communities that are thriving already. Right. I could you know, Lincoln Park is a good example where if they got the money, they'll tear down a house and invest in it again. That's just the way it is. Yeah. I think in order for us to really create a more affordable city, we need to sort of have a relieve the pressure on communities that are facing those challenges. And how do you do that best? Is by making sure that these other communities are getting invested in and building affordable homes and so forth so that there are more opportunities for others to be looking at different neighborhoods than just a similar neighborhood over and over again. Right? That's right. It's important that There are investments in these other communities so that you can relieve the pressure in existing communities. Having said that, for balanced development, you do need to continue investment in these quote unquote communities that are that are thriving because you want to create affordability there as well. speaker-0: Th the LITEC development, I appreciate you saying the the investment needs to continue in these neighborhoods. If there is again, you know, sort of this rent growth, what are some strategies to slow that kind of displacement? Understanding the concept of balanced development as you keep describing. speaker-3: I think three things and one of the things CIC is very involved with is a ⁓ speaker-1: Cameless plug for CIC. speaker-3: Yes. Because I believe in it. I mean we could do this well. And that is making sure existing property owners continue to remain in the community. The the naturally occurring affordable housing, right? Property owners in the neighborhood that own five, seven units and and living in one of them, you know, two, three buildings, when you look at the rent levels, they're typically lower. Yep. Right? Yep. Than the private developers who come in and develop condos and or other kinds of developments. Yes. Because for them is maintaining the they don't realize that the the affordability is probably they're renting it to their friends and family or or ⁓ acquaintances. Therefore it typically their rents are lower than it's because the difference is a private developer comes in, they want to optimize their return and typically they'll charge higher rents and they're very transient. I know owners who don't have annual leases. They handshake. A family's gonna give her for ten years. Right? So so NOAA is a it's an important strategy of balance development. speaker-1: Right. speaker-0: I appreciate that. And it's a very different what you're describing. I really appreciate it. Very different from what we typically hear about, you know, quote unquote greedy landlords. A lot of the folks who own these buildings are local. They have an interest in the community and they are actually keeping the rents low. Just as you described. I think that's right on. speaker-3: The other two things in terms of balanced development is you is the existing market, which is NOAA. Obviously, you investment so you can create new affordable opportunities, both for homeownership and rental. That leads to also other opportunities in terms of small business ⁓ investment. And one of the challenges in thriving communities, some might call them ⁓ gentrifying communities, is that the local business owners also need to own the property. ⁓ yeah. Investment needs to have have opportunities there. Because that's also what challenges communities as well. When you have a local business owner that's thriving, they'll run the property and then develop comes in, buys the property and pushes them out. Yeah. speaker-1: You literally answered my last question, which was like this isn't just about housing, right? It's other parts of the community that also did that investment and it need to be balanced. Correct. Any last words of wisdom to us? speaker-3: I think elevating this conversation is critical so that people understand the importance of the right investment in people first along with investment in development. It's critical because too often ⁓ the debate begins and ends at NIMBYism or gentrification and people get caught up on their own versions and potificating about that and then they don't do anything. speaker-1: Right. ⁓ For sure. Thanks for that. This was such a great conversation. We'll we will want you back because you are an expert in so many things, community development. Appreciate your time, Raul. Before you go though, we have a quick lightning round of questions for you. Okay. Are you ready? Perfect. What's a Chicago stereotype that's actually true? speaker-3: I am ready. Chicago stereotype that's actually speaker-1: Yeah. speaker-3: ⁓ we have the best lake front in the country. speaker-1: Amen. speaker-0: Positive. I love it. I love it, Raul. That is awesome. Okay, next. What's a local organization everyone should know about? Hmm. speaker-3: The resurrection project. Yeah. speaker-1: There you go. Yes. As you should. speaker-0: Speaking of shameless plugs. speaker-1: Okay. Tavern or deep dish? All right. Do you know what tavern style pizza is? speaker-3: Deep dish. ⁓ it's speaker-1: It's a new thing. It's like a flatter than flatter than thin crust. ⁓ speaker-3: Okay. I figure when you're at a tavern you have too many, the difference doesn't matter. speaker-1: That's fair. speaker-0: Now this one might be tough for you, Raul. Favorite Chicago neighborhood that isn't your own. speaker-3: Well, adjacent to us little village, La Vigita. speaker-0: There. Nice. Very nice. speaker-1: And finally, the you this is a yes or no. Does investment lead to gentrification? No. speaker-0: Outstanding. Thank you so much for joining us. You know, a couple minutes ago, Megan said, ⁓ you already answered my next question. I feel like if we had Raul on for another ninety minutes, he will have answered everyone's questions. That's for sure. So knowledgeable. Thank you so much for coming on. This was so much fun. speaker-1: Thanks, Raul. speaker-3: Looking forward to the next one. speaker-1: Right. Stacy, I mean, it's always great to hear from Raul. Like I feel like I don't know why I'm asking him questions. He he is an expert. speaker-0: He is, he is. And the long term view, the investment of the Resurrection Project in the people, in the community for all this time is the and again, solution is too broad, but that's the formula, right? Don't don't think so much about buildings. Think about the people and think about ⁓ how to get them invested in the community. I just I love this conversation. Yes. speaker-1: out of a word. It's such a way to center like perspective. That's what ultimately that's what we're talking about. We're talking about people. speaker-0: That's right. That's right. And I also love that Raoul says, you know, keep investing, right? You might be investing in different ways. Yeah. But communities and neighborhoods are breathing living things and they change. And things might change as a result, but we need to be nimble and adjust. But speaker-1: I mean, essentially he's saying, right, there's not a new secret sauce, right? I think C R P was doing at the beginning, they continue to do, and that's what works the best. speaker-0: I also I I really appreciate it when Raoul, you Raoul was saying that the there's a few people who jump up and down and talk about gentrification and I think the press loves reporting on those people. You know, he mentioned kind of the the majority of the people who are saying, I I appreciate that my neighborhood is improving and group like TRP, again, they're gonna adjust their strategy and try to make sure people can stay and enjoy that community. I just it's a great conversation. speaker-1: Agreed. Thanks for listening to Built Different Chicago, where we try to make sense of what's working, what's not, and why it matters. speaker-0: And we'll see you next time.