Pilsen’s Prolonged Fight Against TIF Amid Gentrification

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On a warm Thursday night in May, a long line of people trickled into Benito Juárez Community Academy for a meeting on a proposed amendment to the Pilsen tax increment financing (TIF) district—a designated area in the neighborhood where revenue from property taxes is diverted to fund development projects. 

Since the TIF district was first established in 1998 under former alderman Danny Solis, this was one of the few public forums ever offered to residents to discuss TIF and the implications it has for their community. While hundreds of residents waited in line, many people lamented that they had done something like this before, that this felt like déjà vu from when they organized against TIF decades earlier or when they were side-lined by a twelve-year extension of that same TIF last fall. 

Chants of “No TIF” echoed in the large concrete courtyard as organizers from Coalición El Pueblo Manda, a group of community members and allies organizing against gentrification, particularly in Pilsen, walked up and down the line holding signs reading, “Developers Stay Out of Pilsen” and “TIF Equals Displacement.”

With Pilsen property taxes increasing much more rapidly than the city’s as a whole, long-term property owners are unable to keep up with their tax payments (in addition to experiencing a general rise in the cost of living). Lifelong residents have had homes their families have owned for generations put on short-sale lists. Or their rent has skyrocketed, forcing them out of the neighborhood.

TIF has a long history of opposition throughout the city. Critics view these districts as tools used by developers and the City to deliberately redistribute public funds to wealthy areas and expedite gentrification in historically Black and Brown working-class neighborhoods by attracting private developments that lead to increased property tax and rental costs. While some residents and groups like El Pueblo Manda or the CivicLab are calling for the abolition of TIF, other Chicagoans and 25th Ward Alderman Byron Sigcho-Lopez are more reform-minded, asking that the system change to empower neighborhood-led development. 

Slowly everyone filtered into the high school: lifelong Pilsen residents, people who had lived in Pilsen for generations but had left or been pushed out of the neighborhood, and other Chicagoans interested in better understanding the new amendment. In front of the heavy auditorium doors, Sigcho Lopez’s office passed out voter cards asking attendees if they wanted the amendment to pass or not. They brought at least 250 cards—not enough for the large crowd.

Officials from the Department of Planning and Development (DPD) sat on stage as people settled into their seats, and organizers from El Pueblo Manda prompted the crowd to continue their chants of “No TIF” with intermittent exclamations: “No one invited you here!” “We love our neighborhood the way it is!”

With DPD and their Johnson Research Group consultants behind him, Sigcho Lopez began the meeting by acknowledging how difficult this time has been for Pilsen residents. “We know many of our families are right now at risk of losing their homes. Many people are strangled by property taxes.” He was met with affirmations from Lower West Side homeowners who on average experienced a sixty-three percent property-tax hike in a single year. 

Dozens of attendees shared their personal experiences with increased property taxes, like one resident whose taxes rose by seventy percent, forcing her to use her son’s college fund to keep their home. Following the meeting, Sigcho Lopez shared that he had senior citizens crying in his office over the winter because they were unable to pay the additional thousands of dollars in taxes, forcing them to lose homes they had lived in for decades or even generations. 

“Nevertheless, there are public dollars out there that must be accounted for, and that historically have not served to preserve communities but rather to gentrify them,” said Sigcho Lopez. 

TIF is a strategy intended to promote redevelopment in what the state calls “blighted” areas, enticing developers to invest in the area and creating jobs through construction and new business in the area. According to the Illinois TIF Act, areas are considered “blighted” when they meet five out of thirteen standards (or two out of six in undeveloped areas considered “vacant”). These standards include things like deteriorated buildings, insufficient or dilapidated utilities, or hazardous waste. 

TIF works by drawing a boundary line based on these “blight” factors established by the state. The city then accounts for every single property inside that boundary line regardless of who owns it. Using the Cook County Assessor’s Office data from the previous year, the taxes assessed for all of these properties are then totaled. This is the base, an amount that is frozen for the twenty-three-year life of the TIF district. Taxes below this base continue to fund City services and infrastructure like public schools, libraries, and transit. 

If property values increase above this base (the “increment”), the additional property tax revenues are funneled into TIF accounts. Public officials can then use these funds to subsidize public and private development and redevelopment projects. 

Chicago is one of the most extensive users of TIF in the country, with more than a third of the city included in the program. At least 185 TIF districts have been created since the first district was designated in Chicago under Mayor Harold Washington in 1984. Year by year, the share of property tax revenue that pours into TIF districts keeps growing, increasing by nine percent since just 2017, according to a report released earlier this year. In 2021, about forty percent of the nearly $3.02 billion in property tax revenue went to TIF.

Within the first three years of Solis’s tenure, four new TIF districts were created in the 25th Ward, chiefly the 907-acre Pilsen Industrial Corridor TIF. Even then, residents knew they didn’t want a TIF created in their neighborhood out of concern that they would be misused. Mary Calderón, who lived in Pilsen for over sixty years before moving, said she remembers organizing against TIF in the late 1990s. “And now looking back twenty-three years later. We were correct,” she said. 

Since 2011, a total of $122 million in TIF was allocated to projects in Pilsen. According to DPD’s presentation, over ninety-six percent of those funds were used for either public uses or affordable housing. But when TIF has paid for these public projects, residents said it was not without a fight. 

“All of these places that you know catch the eye of someone visiting Pilsen came through struggle,” said Vicky Romero, whose family has lived on the same block in Pilsen since the mid-1950s. When a slide showed a public development funded by TIF, Romero could recall which community members fought for that project to happen. 

The amendment in question at the meeting would almost double the footprint of the original Pilsen TIF District, according to experts. DPD claimed this expansion would support small businesses and affordable housing, like Casa Yucatan and 18th & Peoria plots.

Using these expanded funds, the city would update the land use plan and revise the redevelopment budget. But officials’ statements were punctuated by calls from community members explaining what DPD’s terms actually meant to them: When DPD said “development,” people yelled “displacement.” When they said “TIF,” people shouted “shadow budget” or “slush funds.” 

DPD representatives repeated that TIF does not increase property taxes, reminding the crowd that it is a “tax diversion.” While it’s accurate that TIFs don’t operate by increasing taxes, studies have shown that subsidizing commercial development through TIF has contributed to increased property values and rent costs in Chicago. 

Increased property taxes and rents have driven out long-term Pilsen residents. Romero has seen her community slip away in the day-to-day interactions on her old block: “Hipsters don’t say hello, they don’t say good morning…people don’t even look at you when you share the same sidewalk.” But these block-level changes are spurred by intentional, structural government decisions. 

“Gentrification is very calculated,” said Romero, who was also the former board president at the non-profit Pilsen Alliance. Many people think gentrification is inevitable, but it’s not, she said. “We know of many ways that we can actually try to slow down, if not stop, the displacement of working-class people. But that takes effort, and it takes policy.”

“If you have no intention of leaving, like me,” said Romero, “increased property value does nothing but drive up your property taxes.” This sentiment is felt broadly among Pilsen residents, according to Sigcho Lopez, who said residents often tell him how tired they feel from the precarity of the change happening around them: “Why do we have to keep always fighting to just stay?”

There is also ample evidence showing that TIF is misused. For one, districts are often created in areas that do not meet the definition of blighted. The TIF Illumination Project has claimed that this has led TIF to largely benefit more affluent areas in the city by siphoning money away from public services. And when used in areas that do fit the blight criteria, projects funded by TIF are often in areas being rapidly gentrified, like Pilsen. This has potentially contributed to the displacement of low-income families and individuals. 

In 2019 alone, $2.3 billion in TIF went to two developments: The 78 and Lincoln Yards. The latter was funded by the Cortland and Chicago River TIF district created that same year. This move spurred protests by community members, newly elected alders, and the Chicago Teachers Union, who wanted community input and transparency around TIF. Lincoln Park is among the whitest and wealthiest (with a median income of over $115,000) neighborhoods in Chicago; opponents argued it would just funnel money that could have gone to public goods right back into the hands of the wealthy. Specifically, they wanted to see rising property taxes, especially in affluent areas, go to things like affordable housing, public transportation, and schools.

Represented by Chicago Lawyers’ Committee for Civil Rights, community organizations Grassroots Collaborative and Raise Your Hand continued their fight to reform the City’s management of TIF by filing a lawsuit challenging the City’s $1.3 billion public subsidy of Lincoln Yards. Their lawsuit alleged that the designated area of Lincoln Park did not meet the state’s definition of blight and thus did not require public funding. This fits into a longer history of TIF dollars being allocated to private development and ultimately exacerbating racial and economic inequity in the city, they said. 

Sigcho Lopez was one of twelve aldermen who voted against both deals. While he’s critical of the use of TIF funding, Sigcho Lopez supported the renewal of the Pilsen TIF district last fall. He has also said he lobbied City planning officials to expand the area covered under the current district so more properties can benefit. He has cited the Pilsen Food Pantry, which was formerly within the boundaries of the TIF district, as a property that would benefit from that expansion. 

For him, this meeting was more about creating an avenue for community participation and mending a larger history of the City ignoring community input and making decisions in the shadows. “It is unfair for the City to continue to collect TIF dollars and taxes without representation and a clear process,” said Sigcho Lopez during his opening remarks. 

Yet, Leonardo Quintero, a lifelong resident and cofounder of Peace in Pilsen, said he thinks residents are hesitant to trust a system that “already had no trust to begin with.” Although Sigcho Lopez has attempted to be more transparent, Quintero says what he and other residents see as a lack of accessibility continues to leave residents out of the conversation; and it feels like history repeating itself. “I’ve always described it as change happening to us instead of with us,” echoed Romero.

TIF districts are originally designed to sunset after twenty-three years, but the City has repeatedly extended them quietly. In October 2022, just three months before it was planned to expire, the Pilsen TIF district (along with five other districts) was extended for twelve additional years. Quintero said he and people he knows did not even hear about the extension until two weeks after it happened when people began sharing information about it on Facebook. 

When the City does finally host meetings for community input, there is limited outreach, and the meetings are often inaccessible. During the public comment section of the TIF amendment meeting, attendees pointed out that the meeting was a weak attempt to involve community members on all levels. Despite most of the attendees speaking Spanish, the only audio transcription available was in English. Each time the translator spoke, yells of “No se oye” (“We can’t hear you”) could be heard from the crowd, and multiple residents stood up to say the translation was imprecise. Throughout the crowd, young people could be seen quietly translating the presentation to their neighbors and relatives.

As a 12th Police District Council representative, Quintero sees this regularly. He and other council members have been requesting translation services at their meetings, but the City just tells them the resources don’t exist for that. So they are having to figure it out on their own. And that’s assuming people can even find the meetings. According to Quintero, people are often sent to City websites without clear instructions on how to access public meetings. 

Tom Tresser, vice president and CEO of CivicLab (which runs the TIF Illumination Project), said that’s been typical when it comes to the City notifying community members about TIF districts and projects. His organization received a letter notifying them of this expansion only about two weeks before this community meeting. “I mean, by the time we hear about it, it’s a done deal,” said Tresser. 

During the meeting, community members had to ask when the amendment would be presented at the Community Development Commission (CDC) introduction meeting as presenters did not share that information early in the presentation. That meeting was scheduled for May 9, just five days later. Once a TIF extension proposal is introduced at these meetings, it’s usually too late to stop it from barrelling forward. As Tresser explained, “In the history of Chicago, no TIF has ever been defeated by the commission.” 

As it turned out, the amendment was ultimately taken off of the agenda the day before the meeting, most likely due to the community opposition. “It’s a huge victory for the organizers of the people of Pilsen,” affirmed Tresser. 

Organizers with El Pueblo Manda, Tresser’s own TIF Illumination Project, Pilsen Alliance, and other community members and allies have been a huge part of this effort. 

El Pueblo Manda began about seven months ago by a coalition of residents and allies that wanted to address needs in Little Village and Pilsen. They have held educational and community events and protested the City and County. In February, they held a tax workshop in Little Village that over 200 people attended where they found that the assessor’s office was overlooking exemptions homeowners qualified for when provided one-on-one support, adding onto already exorbitant taxes. In collaboration with the TIF Illumination Project, they also coordinate TIF education meetings, helping people understand how the budget works and its impacts on their community. 

Vicky Lugo, who was born and raised in Pilsen, has seen all of the issues that have affected her community in the last few decades alone, from school closings in 2013 to air pollution and fires caused by a scrap metal yard to skyrocketing property taxes last year. After seeing how property taxes affected her family and neighbors, she started to do research and found that some residents had refunds from years prior that they missed or exemptions they weren’t made aware of. 

That’s why she started to get involved with El Pueblo Manda—to help her community on a broader scale. El Pueblo Manda is pushing for homes to be assessed through a graduated property income tax where the tax rate increases as income rises, said Lugo. They are also requesting that the County and City not penalize people who cannot pay their bills, said Calderón. 

Although the amendment was removed as an agenda item in May, it can be reintroduced at any time. What happens will really depend on Mayor Johnson and who he appoints to the CDC. But Tresser is hopeful that Johnson’s grassroots organizing background and progressive alderpersons may help guide the commission in a new direction.

In the meantime, organizers and community members plan to continue educating their neighbors about TIF, resisting gentrification, and advocating for relief for increased property taxes. Housing organizers and other advocates will continue to demand fair home assessments, relief for homeowners drowning in taxes, and the democratization of decisions around the remaining $65 million in the Pilsen TIF and future funds. 

Correction, June 29, 2023: This article was corrected to reflect the most updated remaining TIF funds.

Savannah is a fact-checker and writer with the Weekly.