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Get Rich Quick

Gentrification? This Chicago neighborhood didn’t stop there.


Alan Ehrenhalt

Alan is a Governing senior editor.

Sheffield is a small, rather obscure neighborhood on the north side of Chicago, three miles from downtown, tucked in between Lincoln Park on the east and the Chicago River on the west.

Eighty years ago, it was a bustling blue-collar community of German and Irish families whose breadwinners worked in nearby factories. Most lived in small houses, almost all built between 1880 and 1910, known as "workmen's cottages."

Forty years ago, Sheffield was a near slum, its single-family homes turned into overstuffed rooming houses and alleys strewn with garbage. Neighborhood merchants were shaken down for protection money by Puerto Rican gangs that sold drugs under the tracks of the Armitage Avenue El station.

Today, all of that seems like ancient history. Sheffield is rich. Not gentrified, as we commonly use that term, but really rich. A 2007 projection by a demographic research company put the median home price in the eastern half of the neighborhood at more than $1 million, and the median household income at $133,535.

Not that the place looks all that rich. Sitting at a windowside table at the Chicago Bagel Authority early in the morning, one sees a tableau of what looks like ordinary urban middle-class life: commuters hurrying to the El station; young singles out for a jog; old people ambling at a slower pace. The buildings surrounding the café are nothing extraordinary, either: a chiropractor's office, a sports bar that displays Cubs and White Sox banners with careful impartiality; a Caribbean restaurant.

So why did Sheffield get rich? That's a question that has intrigued local demographers for more than a decade. "At first glance," the Chicago Tribune wrote a couple of years ago, "it's hard to see why some of Chicago's most wealthy people have chosen this formerly nondescript area as their new enclave. It doesn't have a lake view. It isn't even that close to the lake."

Indeed, it's easier to demonstrate that Sheffield is rich than to explain how it got that way. But you can begin to explain it if you are willing to step back and look at some of the policies the local government put in place half a century ago.

Back in the 1950s, Chicago's civic leaders were under a delusion. They thought the city was on the verge of a growth spurt that would lift its population from 3.5 million to at least 4.2 million by 1980. As we all know, nothing of the sort happened, in Chicago or in almost any of the nation's older industrial cities. Chicago's population in 1980 barely scraped three million.

But operating under the assumption of growth, Chicago adopted a zoning law in 1957 that made it much easier for developers to build the high-rise residential towers needed for a city of 4.2 million. The extra people didn't come, but the towers did: 180 of them were built in the 1960s alone, virtually all within a mile of Lake Michigan. And they proved to be very desirable places to live for people who had money and wanted to remain in the city. In simple terms, the city fathers thought they were responding to a demand. Instead, they were creating one.

By 1970, there weren't many places left along the lake to put new residential towers. So the developers began looking west a few blocks, to the Lincoln Park neighborhood, which had begun to look more than a little seedy by then. Lincoln Park began sprouting its own combination of high-rise towers and rehabbed apartment buildings. Soon it became very nice, and expensive as well. But there was one commodity it generally did not possess: residential blocks lined with century-old single-family houses.

Pretty soon, urban home-seekers began noticing that there was a neighborhood, just west of Lincoln Park, that actually did have such houses, in an odd but appealing mishmash of architectural styles. Sheffield could be quite a nice place--if something could be done about the gangs, the garbage and the crime. That turned out to be easier than almost anyone predicted. As urban pioneers moved in, rents increased, cut-up homes were converted back to single-family, and the underclass that produced the gang members and the disorder was priced out of the neighborhood. By 1980, Sheffield was safe. And it was well on the way to affluence. Today, the greatest controversy in Sheffield surrounds the free-spending newcomers who buy modest old homes, tear them down, and build narrow vertical McMansions, complete with elevators, rooftop decks and wine cellars that run the 25-foot width of the property.

The old houses are one theory of how Sheffield got rich. I think it's a pretty good one. But to be fair, we should stop to consider another. We should pay some attention to the "amenity theory" of urban revival. This idea, made famous by the geographer Richard Florida, holds that cities come back by attracting a creative class interested in intellectual stimulation, a lively entertainment scene and convenient public transportation. Sheffield has all of these.

DePaul University, at the northern end of the neighborhood, was for many years a gritty and aesthetically unattractive college that had catered to a local blue-collar population. Richard J. Daley rode the elevated trains there four nights a week to get a law degree in 1933. "The little school under the El," was what people called it. In the 1960s, DePaul almost fled the neighborhood to try and start over in the suburbs. Instead, it stayed, and steadily grew in size, quality, and intellectual influence. This helped to create a neighborhood that any member of the creative class could find acceptably stimulating.

Then there was entertainment. In the 1950s, Chicago had been a mecca for blues, folk and comedy, most of it centered on Old Town, a tiny district a mile or so southeast of Sheffield. The glory days of folk music were over by 1970, but the blues remained strong, and quite a few blues clubs settled on Halsted Street, just north of Sheffield's eastern border.

Finally, of course, there's public transportation, if you want to call that an amenity rather than a virtual necessity of dense urban life. In the 1970s, Sheffield's rail link, the Brown Line (then called the Ravenswood El), was underused and dilapidated. The CTA considered shutting it down altogether. But its fortunes turned. Between 1987 and 1998, even as CTA rail traffic citywide continued to plummet, Brown Line ridership increased 30 percent. If you lived in Sheffield, you could make it home from your job downtown in less than 15 minutes, buy a book on existentialism at the DePaul bookstore, and then wander over to take in a blues performance on Halsted.

So now we've explained it, right? Sheffield was in the right place at the right time, with cute houses, cool music, and a train station every four blocks. Actually, I don't think we quite have the answer yet. We won't have it until we throw in what may be the most important factor: jobs.

Like virtually all industrial cities in America, Chicago lost manufacturing jobs in the second half of the 20th century. In fact, it lost huge numbers of them--32 percent between 1969 and 1983. But Chicago was picking up jobs at the same time--jobs in finance, insurance, real estate, law, and professional services of myriad kinds. A recent study by the Federal Reserve Bank of Chicago found that except for manufacturing--a big exception, I will grant--Chicago actually was a net job gainer in the 1980s and 1990s. A large percentage of these were well-paying jobs, and they were located in or near the center of the city--in places where a short commute to an old workman's cottage would have seemed rather attractive--attractive enough to bid up prices to the astronomical levels they reached before the real estate recession began two years ago. "It is a mistake," wrote the author of the Fed study, William Testa, "to attribute too much of the rising urbanization of college-educated householders to the siren call of city lights, museums, and lakefront parks." In Testa's view, and based on his data, what's far more important is the desire to live close to work.

So the truth is that Sheffield got rich for a whole bunch of reasons, some of which other cities might be able to emulate, but many of which they cannot. It's possible, given enough of a civic investment, to create an arts and entertainment scene in the center of your city, and it's possible to encourage the expansion and improvement of a major university. What's not possible is to create a new stock of attractive century-old cottages.

But jobs may be the most important of all. It's not out of the question for a city to expand its central employment base sufficiently to create the kind of demand for nearby housing that launched a boom on Chicago's North Side. But it would be a good idea for city planners and policy makers to keep one sobering idea in mind: Without a solid base of well-paying new jobs, replicating a neighborhood such as Sheffield may simply be out of reach.

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