In September of 2024, the Chicago City Council approved  the Northwest Side Preservation Ordinance. The ordinance increased the surcharge on demolition from $5,000 per unit and $15,000 per building to $20,000 per unit and $60,000 per building for the area known as the 606 Predominance of the Block Area, (“606 Area”). The 606 Area includes certain blocks within the neighborhoods known as Avondale, Hermosa, Humboldt Park, Logan Square and West Town. Per Section 17-7-0590 of the City Municipal Code, the 606 Area affects those properties zoned RS3 and RT3.5 and within the area bounded by: Addison Street, the North Branch of the Chicago River, Western Avenue, Division Street, California Avenue, North Avenue, Kedzie Avenue, Hirsch Street, Kostner Avenue, Fullerton Avenue, Pulaski Road. The surcharge provisions in the ordinance went into effect on October 9, 2024. For more information on the demolition surcharge, please visit the city’s website at City of Chicago: Northwest Side Preservation Ordinance . A map of the affected Northwest side neighborhoods is referenced in the ordinance at 17-7-0590 Predominance of the Block District. For a copy of the map click here.

In addition to increasing the surcharge for demolition fees, the ordinance also contains a provision known as Tenant Opportunity to Purchase Block 606 District Pilot Program. This provision, found at Chapter 5-11 of the Chicago Municipal Code, applies to the same areas that are affected by the increased demolition surcharges. This Pilot Program is meant to slow the gentrification of these particular neighborhoods and preserve naturally occurring affordable housing in the area. This provision goes into effect on March 1, 2025. The ordinance specifies that upon the sale of the property, the tenants have a right of first refusal to purchase the property.

Section 5-11-50 provides that the owners of property must give notice of their intent to sell the property to the tenant association, or, if no association, to the tenants themselves. For 5 or more dwelling units, notice must be given 60 days before listing the property. For 4 or less dwelling units, a notice of intent to Sell the property must be given 30 days before listing the property. The same notice should be given to the Chicago Department of Housing. Section 50-11-060 provides that once an owner of the property receives a bona fide offer to purchase by a third party, the tenants or tenant association must receive notice that an offer has been received, and a copy of the offer must be given to the Chicago Department of Housing. Please review the ordinance carefully to understand these required notices. The text of the ordinance can be found at CHAPTER 5-11 TENANT OPPORTUNITY TO PURCHASE BLOCK (606) DISTRICT PILOT PROGRAM

To comply with the notice requirements in the ordinance, The Company requires an exception to appear on Schedule B of the Commitment for all properties with multiple dwelling units located in the Tenant Opportunity to Purchase Block 606 District as follows:

Pursuant to Section 5-11 of the Municipal Code of Chicago for properties located within the boundaries of Predominance of the Block property all multi-unit parcels zoned RS3 and RT3.5, Advocus must be furnished with the following:

1. All return receipts of mailings and for Notice of Intent to Sell and Notice of Third Party Offer to Purchase sent to tenants or tenant associations and City of Chicago Department of Housing;
2. Copies of any Tenant Registrations or Tenant Notices received by the Owner of the property;
3. A copy of all rent rolls and/or copies of all leases on the property; and
4. All Notices given by Tenants and/or Tenant Associations pertaining to Waiver of Right of First Refusals and Notice of Third Party Offer to Purchase.

Please be aware that there are exceptions to these Notice requirements on the 606 Area for properties with certain characteristics, such as transfers due to foreclosure, heirship or intestacy, quitclaim deeds to spouses or family members. Those exceptions can be found in Section 5-11-40 in the Municipal Code of Chicago. Attorneys on both sides of the transaction are encouraged to review these exceptions for further understanding and to make sure the property at issue does not fall within the exceptions.

As always, we appreciate your business and ongoing support. If you have questions, please the Advocus Underwriting Department.

[Last update: 2-12-2025]