Northwest Side Preservation Ordinance: What Property Owners Need to Know

Northwest Side Preservation Ordinance: What Property Owners Need to Know

As of March 1, 2025, the City of Chicago has begun enforcing the Northwest Side Housing Preservation Ordinance, a new regulation that significantly impacts the sale and demolition of rental properties in designated neighborhoods on the city’s Northwest Side. Property owners in Avondale, Hermosa, Humboldt Park, Logan Square, and West Town are now subject to additional notice requirements and potential limitations when transferring or developing their property.

Tenant Opportunity to Purchase

An essential feature of the ordinance is the Tenant Opportunity to Purchase, which grants renters a right of first refusal when a landlord intends to sell. This provision is aimed at slowing displacement and preserving affordable housing by giving current tenants a chance to purchase their building.

Under the ordinance:

• Owners of properties with five or more rental units must provide 60 days’ notice of intent to sell to both tenants and the Department of Housing. 
• For buildings with 1-4 units, the required notice is 30 days.
• Tenants or tenant associations may submit an offer at fair market value. If the buyer is deemed financially viable, the owner is obligated to consider the offer before accepting one from a third party.

Increased Demolition Surcharges

In addition to the Tenant Opportunity to Purchase program, amendments to the Demolition Surcharge Ordinance now impose higher fees on properties located in the designated 606 Pilot Area, which includes in the Northwest Side community areas. As of 2021:

• The surcharge has increased from $5,000 per unit and $15,000 per building to  $20,000 per unit and $60,000 per building.
• These surcharges apply when a property is demolished, further discouraging redevelopment that may displace existing residents.
• The ordinance’s sunset date has been extended until December 31, 2029

Implications for Property Transactions

These requirements create new obligations that may significantly affect the timeline and structure of property transactions. Property sales may take longer, involve additional legal steps, and require coordination with both tenants and the Department of Housing. Sellers who fail to follow the proper procedures risk enforcement action or delayed closings. Working with legal counsel early in the process can help prevent delays, ensure compliance, and minimize risk.

If you have any questions about the Northwest Side Housing Preservation Ordinance, or any other legal concerns, do not hesitate to contact Costello Sury & Rooney today at 630.384.8331 or admin@csrlawfirm.com to discuss.