May 4, 2026 – The threat of rising apartment rents in “Obamaville” and other South Side lakefront neighborhoods is sparking a battle between tenants and landlords.
A new anti-gentrification ordinance that gives tenants the “right-of-first-refusal” to buy their building in certain South Side neighborhoods took effect in April, and the action is profoundly rattling landlords and realty industry insiders.
Suddenly, apartment investors are infatuated with Jackson Park and other nearby lakefront neighborhoods because of the upcoming grand opening of the Obama Presidential Center later this summer. The center is expected to be a major Jackson Park tourist attraction, along with the Griffin Museum of Science and Industry.
The new “Jackson Park Tenant Opportunity to Purchase Act” requires neighborhood landlords to notify tenants when they plan to sell an apartment building and wait a whopping 180 days for tenants to make an offer on the property if they choose to do so.
Opponents say the process is unnecessary because tenants have the right to buy a building without the waiting period, and it only delays sales and gives both lenders and buyers cold feet.
Additionally, the ordinance breaches the basic “principle of uniformity,” creating a two-tier class of property owner’s rights, said Sara Benson, a veteran appraiser and Gold Coast Realtor.
Proponents of the new ordinance, which was passed by the Chicago City Council in October 2025 but underwent an administrative period before taking effect in April 2026, say it will help slow displacement of long-time residents in the Jackson Park, South Shore, and Woodlawn neighborhoods on the South Side lakefront.
Uncertainty and cold feet ripple through the market
Meanwhile, Realtors, apartment investors, and “Ma and Pa” landlords expressed grave concerns about the “Northwest Side Preservation Ordinance,” which went into effect in 2025 in a six-square-mile area on the North Side.
This ordinance currently covers Avondale, Hermosa, Humboldt Park, Logan Square, West Town, and part of the Pilsen neighborhood on the Northwest and West Side.
“By layering a highly technical and time-sensitive process onto already complex transactions, the Jackson Park tenant ordinance introduces additional uncertainty for renters, nearby residents, sellers, and buyers already faced with the rising cost to own property on the South Side of Chicago,” said Tom Benedetto, Illinois REALTORS’ Senior Director of Local Advocacy.
The mandatory waiting period is the main worry for real estate investors and landlords who say it will stymie lending and cause unnecessary delays in neighborhoods where the ordinance applies.
“While owners are required to take additional steps throughout the sale, we believe the [tenants’ right-to-purchase] provides vital opportunities for displacement prevention while maintaining a property owner’s ability to sell at a fair market value,” said Michael Cox, a public relations representative for the City of Chicago’s Department of Housing.
However, Stephen Rich Jr., a South Side landlord and board member of the Neighborhood Building Owners Alliance (NBOA), said he worries that the ordinance will have unintended consequences.
Lenders are likely to hesitate to grant investment loans to both risky, novice buyers and experienced purchasers in the ordinance’s coverage area, Rich said.
For tenants – who may be inexperienced in commercial real estate – lenders may choose not to issue mortgages at all, or attach stricter loan terms, such as larger minimum down payments or higher interest rates.
A lender also might apply a similar mentality to out-of-town buyers shopping for a building in the hot Obamaville area, which would result in higher rents and potentially hinder the resale process later. Neighborhoods could see market separation, “where you have units that are renting higher than they were last year – and the year before – and then next door, you could see apartments that are blighted, abandoned, or boarded up,” predicted Rich.
“...you have units that are renting higher than they were last year – and next door, you could see apartments that are blighted or abandoned.” — Stephen Rich Jr.
The South Side – especially the South Shore and Woodlawn neighborhoods – saw an influx in investment in the wake of the pandemic. But many of those deals have fallen into distress, as out-of-state buyers got in over their heads.
As a result, banks are foreclosing and taking title to the distressed properties. Trying to sell a property within the pilot area can also slow the process of banks offloading such buildings – and giving them cold feet in the future.
A better approach, Rich advised, would be to allocate resources to educate renters about the process for buying a building if they are interested, without requiring the lengthy and burdensome waiting period for sellers.
Pushback and a complex maze of compliance
The Northwest Side Preservation Ordinance, which went into effect in 2025, also ran into pushback from both property owners and alderpersons. Last year, the City Council deleted sections of the 31st Ward and 36th Ward from the ordinance’s coverage area at the request of the aldermen of each ward.
So far, only one instance of tenants taking advantage of the waiting period has been widely publicized, according to a report by The Real Deal.
Tenants responded by forming a tenants’ union with the goal of influencing who buys the building without purchasing it themselves, according to a Block Club Chicago report. Regardless, only one non-tenant buyer has navigated the purchase-process maze successfully on the Northwest Side.
In December, investor-seller Tom Shanabruch said his company faced a “frustrating process” to comply with the ordinance while trying to market a building. The action required notifying all 134 renters at the AM1980 apartments in Bucktown via certified mail, and securing signatures via Docusign to prove they declined to form a tenants’ union or wanted to purchase the property. The investor group ultimately sold the apartments at 1980 North Milwaukee Avenue to Cedar Street for $35 million.
The Department of Housing has since developed a process for helping sellers comply with the ordinance’s notification requirements, said Michael Cox.
“We recently implemented updates to the Northwest Side Preservation Ordinance – including clearer forms, expanded language access, and an online portal for submission. The Jackson Park Tenant Opportunity to Purchase Act’s initial rules aligned with those updates,” Cox said.
A separate policy passed by the City Council in April protects existing tenants by requiring landlords to provide advance notice for non-renewals based on the length of tenure:
30 days’ notice for tenancies of less than six months.
60 days’ notice for tenancies of six months up to three years.
120 days’ notice for tenancies of more than three years.
