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Mayoral candidate Jeff Smith claims that new development in Evanston has gentrified low income people out of town.

Speaking to a largely African-American audience at Family Focus Thursday evening, Smith said the city “throws money at developers in the form of subsidies and zoning breaks, all sorts of enticements and incentives.”

As a result, he said, land values go up, distorting the housing market.

“For 20 years I’ve been saying that if we keep doing what we’re doing we’re going to be gentrifying people out of Evanston,” Smith added. “The city has to own its role for what it’s done to distort the housing market in Evanston.”

However, U.S. Census data does not support claims that low income residents are being priced out of town.

Household income data shows that from 2009 to 2015, with residents grouped into three income categories, the low income population in Evanston increased by 3 percentage points, while middle-income residents declined by a similar amount and higher income residents increased by just 0.4 of a percentage point.

The picture is generally similar if the population is further subdivided into 10 categories by income.

Median income barely budged — up 0.7 percent — and mean income rose just 0.3 percent.

Furthermore, the latest census housing cost figures show that the share of Evanston households who are defined by the government as housing-cost burdened — paying 30 percent or more of their income for housing — has declined from a decade earlier.

The cost-burdened figures can be volatile — because they have a high margin of error for a community the size of Evanston and because of sometimes rapid changes in the real estate market.

But they show that the share of Evanston owners considered cost-burdened fell from 39 percent in 2005 to 29 percent in 2015. The share of renters considered cost-burdened fell from 55 to 49 percent during the same time period.

The Census Bureau survey says the number of occupied housing units in Evanston increased by 2,630 during that time span — reflecting a substantial amount of multi-family new construction in the city.

However, the number of owner-occupied units declined by 1,370, while the number of renter-occupied units increased by 4,000 — reflecting the national decline in home-ownership levels following the bursting of the real estate bubble last decade and the recent spurt in multi-family rental construction in Evanston.

Bill Smith is the editor and publisher of Evanston Now.

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13 Comments

  1. Facts matter

    Hi Bill Smith – Thank you for fact checking.  I appreciate that you do this and I hope you will continue.

  2. Let’s get the story straight

    Those earning $50,000 to $199,000 annually have dropped from 2009 to 2015.  All other categories (below $50,000 and $200,000 and up) have increased.

    So here is what is happening–lower income and the uber-wealthy are increasing in numbers in Evanston.  This data establishes it and many of us have witnessed it. 

    Who among the mayoral candidates will tell it like it is?  The ranks of those considered to be middle class are shrinking in Evanston. 

    1. Middle class people are
      Middle class people are getting squeezed out of Evanston because people like Smith do everything in their power to restrict development in order to keep their property values high (and housing expensive!).

      Smith claims that new development is causing housing to become more expensive, but we desperately need new construction to replace old structures and to expand the housing supply.

      The real culprit here is Evanston’s restrictive zoning and absurd parking requirements for new development, surely supported by anti-development people like Smith. These onerous requirements mean that only high-amenity, luxury buildings make economic sense for developers to build.

      It’s absolute nonsense that the building I live in, which is steps from two El stops and the metra, is not in a TOD zone and would be impossible to build today because of parking requirements.

      It’s a shame that Smith, who describes himself as a lifelong progressive, is so focused on keeping people out of Evanston.

  3. What is Jeff Smith’s response?

    Many political candidates will make statements to advance their agenda or bolster their positions.

    In Evanston, hopefully we can hold our candidates accountable for their statements, and when facts appear to deviate from statements, we should ask the candidates to more fully explain their view, and if the facts still don’t support the position, then the candidates should acknowledge their mistake.

    I await Jeff Smith’s response.

    TP

  4. Facts Checked

    IBill,

    I’m sure that your facts are real but the number of jobs created in the last 6 years are either low wage, part-time, or both. There are fewer people working in this country than in the last 20+ years.

    This leads me to believe that many, if not most, low income families have people working more than one job and/or multiple family members working to contribute to the total family income.

    I’m not sure if these factors can be obtained but I’m pretty darn sure that many of the under many low income households are working longer and harder hours to maintain their needs.

    1. Not so

      The claim that there are fewer people working in the country than 20 years ago is false.

      See detailed data at the Bureau of Labor Statistics website. 126 million people were working in 1996 … 152 million were working at the end of 2016.

      However the population has grown in that time, and the percentage of the population in the workforce has declined, from 63.2 to 59.7 percent.

      Some of the percentage decrease is a result of longer life spans in retirement, some the result of laid-off workers becoming discouraged and not finding new jobs.

      How many hours people have to work to generate their income is not captured in the data series used to assess whether people are housing cost burdened.

      And, frankly, if you want to argue that Evanstonians are working longer hours to cover their housing costs — that, if true, would be a further evidence against the theory that the city is becoming gentrified — the issue the story tried to address.

      — Bill

  5. I can’t keep up
    Let’s see….white people moving into a neighborhood = gentrification = racist. White people moving out of a neighborhood = “white flight” = racist.

    Its almost as if everything is racist, no matter what.

    1. Racism = Power + Privilege

      People leaving or moving into a neighborhood does not in itself constitute racism. “White flight” has historically been fueled by realtors seeking to profit from buying low and selling high. “Gentrification” relates more directly to class/wealth than race though whites have more wealth by far than other groups so the intersection between race and class does mean most gentrified neighborhoods become whiter.  This does not mean they are necessarily racist.        

       My question is how can we move towards living together in communities where people of different races and classes appreciate each other and are willing to work together for the good of all the residents.

  6. Thank you, Bill, for offering

    Thank you, Bill, for offering a perspective I couldn’t get on my own.  I study the charts and read the claims, but we’re in an era of fake-facting.  You’ve helped.

     

  7. How many more affordable housing units will government give us?

    Mayoral candidate Smith now is kowtowing to low income folks. Perhaps he has forgotten that in 2010 Evanston received an $18 million grant to “stabilize” two neighborhoods with a high percentage of low income folks and foreclosures.

    Almost 100 properties under NSP were rehabbed or demolished and replaced to create roughly 100 AFFORDABLE units for rental and resale. The city also constructed with tax dollars a few years back about 32 affordable new housing units.

    The city also has a lot of other affordable housing units not mentioned here.

    So I highly doubt gentrification is happening in Evanston but I guess maybe Smith is trying to appeal to certain voters.

    Gary Gaspard, another mayoral candidate, wants to create a municipal income tax on higher income residents to pay for MORE affordable units as if we don’t have enough.

    How many more affordable housing units does Evanston need? I know of working age able bodied low income renters in Evanston who pay less than 10 percent of their rent. The government pays the rest. And they don’t have jobs. People need a hand up not a hand out. Our elected officials need to spend more time worrying about bringing more jobs to Evanston rather than crying about alleged gentrification or income disparities.

    That’s the rub. It has become the goal, the intention of all Evanston elected officials and candidates to make it their job to dole out government money in hopes of gaining more votes. This is what you get when you have only one political party in control and without competition.

  8. Let’s be fair

    At least in the lines quoted — and since none of us were working off prepared remarks for these questions, I don’t have it written — I didn’t limit my comments to “low income.” To that extent, this interesting piece is a straw man argument. Many/most studies address low AND moderate income. The charts show increase in inequality, which I agree has been occurring for years. Middle-class squeeze is part of gentrification, it’s not limited solely to those in poverty. If a two-worker, three-child family making $60,000 total (and so taking home well under $50,000) moves to Skokie because the property taxes on their modest house go to $10,000 annually, or if the wage-earner in a family who was making $70,000 loses her or his job and sells to a couple that is making $200,000, who tears down the house and builds something twice the size, that’s part of gentrification too even if neither the $60K nor $70K household ever get picked up in the “under $50K” group, for different data-gathering reasons, and even if there was no increase in the mortgage of either. The bar charts above don’t pick up the ground-level reality of a low-income African-American family of four who leaves Evanston after selling to a middle-income Latino buyer, who vacates an apartment that is then rented by a “low-income” but upwardly mobile unmarried white millennial household of one — the “low income” household count is a wash. If this happens hundreds or thousands of times, there is a tangible change in texture; that’s not to say newcomers aren’t welcome, only that there’s a disconnect between rhetoric and policy on diversity. Plus, just focusing on “low income” in Evanston is erroneous because up to 1/3 of the households you pick up in that demographic consist of students — check out any census map and you’ll see a high concentration of “low income” between Ridge and the lake in NE Evanston, because many students have little to no income. So, saying “low income” grew, in perhaps some sort of divisive meme that it’s the poor who are taking from the middle, without factoring out that NU keeps growing, and that as a class, young workers took it on the chin in the recession, distorts attempts to look at local gentrification.

    Second, just looking at the 2009-15 delta ignores the pre-2007/08 bubble runup in Evanston real estate prices (and assessments) where a lot of displacement occurred, and ignores that development largely stalled for some years after 2008-09, and ignores that the African-American exodus that I’ve referenced has largely referenced 2000-2010, the last two full censuses. Third, a decrease in those who are “rent-burdened” or housing-cost-burdened doesn’t necessarily mean there’s been housing cost relief, it may just mean that those who couldn’t afford left and were replaced by those who could. The bar charts for the last 6 years show an increase in >$100K households. The charts don’t say whether they were the same households doing better, or new substituting for old (let’s assume there was some of both, but I know there has been slippage in others as well). I don’t disagree that there has been an increase in rental availability. Part of that was people renting out houses or condos that were formerly owner-occupied; part has been a shift in new multi-unit construction to rental rather than condo. So, for some renters, there has been some mitigation; however, been more influx of new tenants for new construction rather than a relocation of previous owners. The voter registration lists, wich allow tracking of mobility, tend to support this observation.

    Finally, my remarks weren’t about the fact of gentrification so much as the degree to which City policy is a factor. I’m actually kind of stunned to the degree that this piece seems to attempt to argue gentrification doesn’t exist or hasn’t occurred in Evanston. As a City of Evanston staff memorandum itself noted in 2014, “The steady decline of affordable rental units in Evanston has been a central topic in every housing analysis, report and plan developed in the last five years.” See L. Gavin, Decline of City’s Affordable Housing Expected to Continue, Evanston Roundtable (Feb. 25, 2015), http://www.evanstonroundtable.com/main.asp?SectionID=15&SubSectionID=26&ArticleID=10031. A 2015 joint community health needs assessment undertaken by area hospital care systems and other partners found, among other things, that, in the area including Evanston (identified as among the higher need communities), “The high cost of living and property taxes have contributed to a lack of affordable and safe housing. … High cost of living leaves less [per] month for other essential needs, threatens health, mental health and well-being…Gentrification displaces communities of color.” As to owned units, I frequently hear from realtors about mismatch of inventory and demand.

    I’m not really willing to spend a lot time debating the fact of what is occurring, no more than I’m going to debate the facts of icecap melt or sea rise. I’ve heard too many stories in folks’ living rooms and in conversations at community centers, seen too many house flips. Cause and policy solution are the questions. My bone of contention is twofold: first, that many discussions dance around or avoid using the term “gentrification.” Perhaps they consider it loaded. Maybe, to a degree, it is, although as I use it I’m not attributing motive, just describing the phenomenon; my first point is that it’s easier to address if we acknowledge it. The second is that property taxes and rents are a driver of displacement, at the margin (while not using the g-word, City studies knew this 20 years ago); that land values (along with government spending) drive property taxes and rents, and that rezoning to allow higher revenue or profits to be extracted from a property will have a land value impact on other land, strongest on proximate properties. I think Adam Smith (no relation) would agree.

    The total effect becomes a little more complex because, cumulatively, supply and demand in a community do operate, and I agree that there are cycles of growth (tho not always as extreme as before, during, and after the recent crash). So you can end up with the seemingly paradoxical result of land values going up, especially near development, while rental/sales prices further from the development don’t, at least temporarily. That can alleviate rent issues for a while, but ultimately if you have declining or stagnant home values on increasingly expensive land, there is pressure to tear down (or sell out).

    Then there is the separate issue that residential construction necessarily increases demand and community costs for government services (police, fire, schools). Exh. A is the current District 65 referendum.

    Note I’m not saying that it always happens with every project nor that development is the only culprit. What I have advocated for is that we start accounting for the likely effects in our zoning and permitting instead of acting as if there isn’t an impact, and then looking up after a decade and saying, “Gee, how did that happen?” http://www.jeff4evanston.org/issues/afford Also, if the article had reported in greater context my remarks from this forum 5 days earlier, it would have reported my concerns about government spending, and the degree to which cost overruns, or awarding contracts that one wouldn’t if it were one’s own money, plays a part as well.

    1. Unintended consequence?

      As mentioned:  “….property taxes and rents are a driver of displacement, at the margin (while not using the g-word, City studies knew this 20 years ago)…”  This is interesting in the context of the expected ask from D65 to increase our real estate tax burden in April’s vote.  Perhaps an unintended consequence.

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