Corruption of landmarking.
So in this election season, has anyone heard about how the Obamas got their house?
Recall that Michelle Obama used to sit on the Landmarks commission board for the City?
The doctor who previously owned her home had petitioned for a permit to sell a designated Historical Georgian revival home built in 1910 with four fireplaces, glass-door bookcases fashioned from Honduran mahogany, and a 1,000-bottle wine cellar owned by a doctor in Kenwood.
He wanted to try to partition the property the house sits on so that he could separately sell the house and the lot adjoining it. To do that, since he was landmarked, he had to get permission from the Landmarks commission before it could ever get to zoning/planning.
The commission sat on the permit. And sat. And sat.
One day, Obama and Tony Rezko toured the property. Magically, when the Obamas decided to buy the property with Tony Rezko's wife, in March 2005 (this is at the same time that Tony himself was pleading poverty as to why he couldn't pay court judgments against him), the partition was approved. Michelle Obama resigned her seat on the commission. The Obamas closed on the property in June 2005, for $1.65 million dollars, $300,000 less than the asking price. Tony Rezko's wife purchased the newly divided sub-plot for the full price of $625,000 and closed on the same day. The Rezko plot is not buildable. It is a non-conforming size, and thus would require a major zoning regulation exemption.
Interesting, isn't it, that Obama got the house for 300K less than the asking price, while Rita Rezko paid the full price for a lot that can't be developed? Can only be entered via a gate on the Obama property?
Now, let's also talk about zoning issues. The property was zoned RS1. This means the house the Obamas bought required 6,250 sq. ft of area, lots of open space setbacks, etc. Did the Obamas have to comply? Well, it does not comply if the Rezko's property doesn't count as part of their lot.
The Chicago Way.
And people still continue to ask my why I'm not in favor of landmarking the pretty buildings. Go ahead and preserve the pretty buildings. It's the government corruption that I loathe.
Not exactly hope and change.
Alderman Daley screws over poor people
Our brilliant Alderman Daley, like many other economic idiots who call themselves Aldermen, just voted in favor of making it harder for stores like Wal-Mart, Target, Best Buy, Kohl's and Home Depot to competitively perform in Chicago.
The so-called "big box" retailers will have to pay Chicago employees a minimum of $9.25 an hour in wages and $1.50 an hour in fringe benefits, jumping up an additional 75 cents in hourly wages and doubling the fringe benefits by the year 2010. Current Illinois minimum wage levels are set at $6.50 an hour.
Say what you want about Mayor Daley, but he at least realized that this is a horrible thing for city residents.
The RANCH newsletter and Alderman Daley of course hails the move to punish "big box" retailers as a way to protect what they view as their retail boutique shops on Armitage.
Ummm, no, if you want your nice little village of shops, and to keep the average Joe in business, and don't want to see what one perwon bitched about as overpriced cosmetic stores moving into the area, you get rid of regulations and lower property taxes so that Average Joe can make a profit. My dry cleaner just lost their lease because they simply could not afford the new lease's costs. Guess what, the bulk of those costs for property owners come from maintaining the property (made more expensive by landmarking) and ever-rising property taxes (made more expensive by excessive city government spending).
The people who are hurt by this measure are not the wealthy in Lincoln Park and elsewhere who have a car, and the ability to drive to the suburbs to stock up on dog food and diapers, or pay for Peapod to deliver their groceries.
The people hurt are the ones who can only get somewhere by taking a bus or walking; who cannot afford to spend much on food generally, let alone the Whole Foods delivery surcharge for their groceries; and who would be thrilled to get the job as a greeter at Wal-Mart.
Requiring payment of a higher minimum wage is a cost. And for every person who maybe gets an extra $20 dollars a day in pay by the ordinance, how many people who do not have much in the way of disposable income will be forced to pay extra for groceries, transportation costs, home repair, clothing, because there is no "big box" retailer nearby?
If you lack disposable income, a penny saved is more than a penny earned, not least of which because the money saved you don't have to pay payroll taxes on.
So Vi Daley's wealthy constituents aren't harmed by the fact that they have to drive down Elston street on Saturdays if they want to shop at Target, or even out to the suburbs once in a while, or pay someone to do some electrical work instead of picking up supplies at Home Depot to do it themselves. But the people who don't have cars, who are living from paycheck to paycheck, will be forced to struggle when they don't have those same options.
So here's what a vote for Vi Daley means. Standing on the side of a government that thinks nothing of stealing value from your homes, making life harder for the working poor, all in the interests of protectiving a bunch of snobs' aesthetics.
Do that math.
A landmarked fully rehabbed single family house in Old Town, on 37.5 foot wide lot, with accompanying coach house. Market price? $1.6 million.
A non-landmarked vintage single family home with coach house in Lincoln Park. Current market price? $2.45 million.
A new single family home in non-landmarked area on a 37.5 wide lot in Lincoln park? On the market for over 3.3 million.
Another vintage single family home, brick, 3000 square feet, also for sale in Old Town, purchase price offered around 1.3 million. A Wood frame single family in Old Town, on Willow, price 1.2 million.
New construction single-lot homes in non-landmarked Lincoln Park? Ranging from 2-6.5 million. Single-lot homes in the same area built within the last five years are averaging between $2.5-3.5 million prices.
Vintage single-lot homes in non-landmarked Lincoln Park? Ranging from 1.4 million if on bad lot or in bad repair, up to 2.2 million if newly restored.
Naah, landmarking doesn't hurt your home's resale price (yes, that is sarcasm).
Landmarking Hypocrisy, part 923.
So the most recent RANCH newsletter decries the fact that everyone's favorite bureaucrat, Brian Goekin (the Chicago Commision on Landmarks guy who thinks that everything built in Chicago from the Great Fire through 1930 must be preserved precisely as-is, unless a Mayor or powerful alderman/city bureaucrat above him thinks to the contrary) has decided that the Armitage el station facade need not be redesigned to historical standards. Apparently, it will be really really expensive to maintain the facade to historical standards, and the CTA doesn't want to drop the cash to do it.
Dan O'Donnell, one of the local business owners, hits the issue square on the head: "cost is not an excuse individual property owners can use to sidestep historic guidelines," so why does the CTA get to follow different standards?
Great question Dan. My cynical answer is that certain folks find it very easy to demand that other people spend money a certain way, but when it comes to their own money, the canary sings a different tune. It is a question of accountability, really. Property owners who are forced by unaccountable bureaucrats at Chicago Landmarks Commission to disproportionately spend money on landmarking-based costs, they can't fire Brian Goekin. But the CTA gets to decide if they want to listen to him or not.
Our stellar Alderman Vi Daley is on the case, though, promising to discuss things with everybody. Well. That makes us all feel better, doesn't it?
One other interesting little nugget: after the last RANCH newsletter complained about how the small business just can't compete on Armitage with rent costs, etc., RANCH hilarously publishes the fact that the owner of the new store, 1154 Lill, which just opened on Armitage, was forced to drop $7000 to get rid of the new windows she installed; since her property is historical, she had to go back and repair the old ones.
Seven thousand bucks to satisfy Mr. Goekin's window aesthetics. She's gonna have to sell a lot of purses to cover that loss. What a friggin waste.
Landmarking, a few years later
So the Armitage/Halsted commercial corners were landmarked by Vi Daley awhile back, over the objection of at least 90% of the property owners. The result?
We've lost our local hardware store, a women's clothing store, another store has halved its size, and a few other "local" stores have left for greener pastures.
The latest RANCH newsletter reprints a letter of a 14 year old to Alderman Daley asking why all the cute little stores have left the neighborhood, and what "we" can do about it.
Now, I can understand a 14 year old lacking a background of economic theory and history with the neighborhood to understand the laws of supply and demand.
I would argue that "we" are part of the problem, because landmarking the commercial district translates into higher maintenance costs, higher risk factors, ergo, higher prices to rent there in the first place.
Alderman Daley's response is inexcusable. Among the more laughable portions, she suggests that she will work really really hard to make sure that when someone else comes in (i.e., national chain retailer, if the landlord is so lucky, since Vi is also refusing to allow any new banks to set up shop on the street) they will be forced to change their business practices to be more "local" in style (i.e., the cost of doing business will become even MORE expensive).
Good grief. So much wrong with this mentality.
Now, think about it. If retail square footage is renting on the order of $63/sf, and assuming that the average retail space on the block is maybe 1000 square feet, you're talking maybe 63K a year in income BEFORE expenses. The building housing Charlie Trotter's pays in excess of $20K a year in property taxes. The commercial condo where Lori's Shoes is located pays on the order of $14K a year. The building where Studio 910 is located pays out over 10K a year. How much do you think is left over to pay a mortgage, or pay for repairs??? Property taxes being what they are, and ever-rising, of course that will push people out of the market.
Gee, if local businesses can't afford to be where they are, maybe the Alderman should try to cut out the costs of government for a change. Start with getting rid of the landmark designation. Cut the number of city agencies you need to go through to even get your business up and running in the first instance. Cut city expenses, cut the burden of property taxes. Oh, and if you want to ensure that there are enough people in the area to patronize the businesses in the first instance, maybe you can allow some areas to have their zoning upped, so that there are more condos, leading to higher density and foot traffic.
It irritates me to no end that the only solution the government can think of to the messes it creates is Ta-DAAA!!! more government. Sheesh. We're not worthy of those who turned Boston Harbor into a big teabag because they were ticked off at paying the King's new taxes.
The brains of Chicago Aldermen
So, ok. Not everyone loves Wal-Mart. (I'm a Tarjay-on-Elston gal myself). Spare me the pontifications on big box retailers from those snobby enough to not have to worry about watching their pennies. But our beloved Chicago Aldermen refused to allow Wal-Mart to build within Cook County borders. So Wal-Mart built about a block across the border in Evergreen Park. The result? At a new Wal-Mart, over 25,000 job applicants for 325 full-time jobs (starting salary: $10.99 /hour on average).
Putting it another way, at best only 1.3% of the applicants will get jobs (2.6% if they are all part time, which they supposedly aren't). Applicants have a better chance of getting into Harvard (10.3% admission rate in 2004) or Yale (9.9% admission rate in 2004) than you do of getting a job at this Wal-Mart store. Oh, and the City is foregoing somewhere around a million a year in property and sales tax revenues.
But yeah, this is supposed to be what constitutes taking a stand for "the little guy" on behalf of "corporate greed." Hmmmph. Maybe this time I'll just restrict myself to saying, "Idjits." And a reallly easy stand to take for people raking in around 90K a year to listen to people bitch about potholes.
Feel free to send an email to firstname.lastname@example.org. Give us a return email, or phone number, and we'll get back to you. We know that certain aldermen in particular (Vi Daley, Manny Flores, Tom Tunney, to name a few) are being particularly abusive with the landmarking ordinances towards their constituents. We'll give you some suggestions.
Oh, and don't forget: the Aldermen are up for reelection in 2007.
Where preservation really gets out of hand.
Some local villagers in Scotland don't want a developer to start his project because, no joke, they claim that fairies are living under the rocks, and the development process would disturb them.
Now, once you have confirmed that you are not actually reading "The Onion," you would think that such objections would cause their makers to get laughed out of town, right? Or, perhaps told, even if a bit tongue-in-cheek, that if they just start clapping and saying "I believe in fairies," they will ensure the ressurection of the fairies a la Tinkerbell in Peter Pan, even upon movement of the rock?
Oh, not if you are a planning bureaucrat with a cushy government job that insulates you from what we call the real world, rather than fairyland. What those ilk do is buzz back to their little list of rules and regulations. Amazingly, the Planning Inspectorate has no specific guidelines on fairies. But the developer nevertheless has to redesign his project, because, a spokesman said (with all apparent seriousness) that “Planning guidance states that local customs and beliefs must be taken into account when a developer applies for planning permission.”
Maybe Preservation Chicago can try that next. I'm sure they can trot out some ghosts who are living in various neighborhoods, and use that as a reason why nothing new can be built, or anything old improved. Have a seance or two invoking the first Mayor Daley, Al Capone and the Ghost of Mrs. O'Leary's Cow, and you could never change anything in the city ever again! Because if you don't, you're not respecting my beliefs! Quelle horreur.
A philosophical point.
I've been much chided for the use of the phrase "neighborhood nannies." I suppose I could adopt those of the great author of our U.S. Constitution, and fourth U.S. President, James Madison and just say "obnoxius individuals."
In the Federalist Paper No. 10, Madison discussed why there will always be factions in society that will demand from those in power (i.e., government) sanction and the use of force to effect their interests. He did not expect men to act like angels, and rather presumed that they will always act pursuant to their own selfish interests. He rightly discerned that in raw democratic politics, "there is nothing to check the inducements to sacrifice the weaker party, or an obnoxious individual."
He concluded that "the causes of faction cannot be removed; and that relief is only to be sought in the means of controling its effects."
Hence, the need for a republican government (and I am using the term in its classical sense, not the political-parties-of-today sense). Hence, the need for controls on the government's very ability to exercise power in the first instance.
Madison, BTW, was also the primary author of the Bill of Rights, which contains the Fifth Amendment. He, in turn, based a good chunk of it on the Virginia Bill of Rights, which stated:
That elections of members to serve as representatives of the people in assembly ought to be free; and that all men, having sufficient evidence of permanent common interest with, and attachment to, the community have the right of suffrage and cannot be taxed or deprived of their property for public uses without their own consent or that of their representatives so elected, nor bound by any law to which they have not, in like manner, assented, for the public good.
(6th article in Virginia, I believe, but I don't have a direct cite).
The founders of this nation recognized that securing property rights from individual and government tyrrany was essential to liberty. Pity some haven't learned that lesson.
Maybe it is not just "death and taxes," just taxes.
You know the gallows humor of the only things you can be sure of are death and taxes?
So let's assume that you are a little church in Oklahoma. You have a small congregation, and your church is paying no property taxes. If you are a government bureaucrat hunting up revenue, which gospel do you follow: the church, or a big-box retailer?
Why the latter, of course!
The city government is trying to eminent domain the Centennial Baptist Church in Sand Springs, Oklahoma. Reverend Roosevelt Gildon opposes it. But in this post-Kelo world, as blessed by our U.S. Supreme Court, the City can grab the land and tear the church down, under the theory that property tax revenues from a strip mall on the land will exceed those proffered by the church.
Yet another reminder of why protection of property rights is essential to our right to experience all our other liberties...
Alternatives to the Chicago landmarking ordinance
If the city was really serious about supporting the preservation of older homes, then the present ordinance is diametrically opposed to that goal. What are some alternative approaches? Here are a couple:
1) Actually do take the steps to refund/freeze property taxes on older homes to property owners. (Of course, the better result would be for the City to stop wasting money so that our property taxes don't keep rising (and pricing people who have been in a neighborhood for over 30 years out of it as a result of increased assessed values, to boot) -- but I'm not going to hold my breath on that one).
2) Some of you may have heard of what are called "TIF" districts, or tax increment financing districts. They are typically used to revitalize areas of the city that have experienced economic depression of some sort. The basic mechanism of their operation (and I am grossly oversimplifying here) is that property's assessed values are frozen for a certain period of time, and then, as they rise, the extra property tax revenues resulting from the increase are reinvested back into that particular neighborhood's infrastructure (i.e., parks, streetlights, improved sidewalks, etc.). Well, why can't the City do the same with their landmark districts? If you want to motivate landmarking, why not return a good chunk of the property taxes generated from the property owners in the landmarked area back to the homeowners as earmarks so that they can invest them in performing historical renovations/maintenance to their properties?
3) If there is a particular block that has, for example, a series of look-alike homes, or attached houses, you can always privately covenant with each other to not tear down homes, or to maintain certain standards for height/facade/color/building materials of the home, without having to deal with the City or neighborhood association's input. In this way, you can decide what is really important to you (maybe you all just want 3 foot high iron fencing, maybe you only care that the brick or certain architectural detailings remain on the facade, maybe you don't care about the height of additions placed on the back, maybe you just don't want a house paited turquoise) or not. One of the big problems with the Chicago Landmark ordinance is that repairs have to be made according to US Department of the Interior regulations. This is where a lot of the nuttiness about repairing rather than replacing windows, using original building materials, etc. come into play. If you have a privately-negotiated standard, you can decide what elements YOU want to preserve (not what Washington DC thinks you should preserve), and why. So if you don't care to incur the expense of replacing windows with custom varieties made using circa 1910 methods, you don't have to.
Similarly, it would also be possible to establish a local homeowner's association (even if only for a few homes on a block) in which the association (or other homeowner) would have a right of first refusal to buy any home slated for teardown. Again, you would NOT need to go through the city, alderman, neighborhood association to do this. But you would know that whatever agreement you sign with your neighbors is one that you willingly agree to, not one that is shoved down your throat.
I can't tell you how many homeowners I have spoken to who have dealt with the landmarking provisions, who hate the landmarking provisions, but would be willing to accept any one of the above approaches to help preserve homes in their neighborhoods.
Oh, and here's a little anecdote for you. Sitting on the plane, traveling for work. Happen to sit next to a guy who lives in the Old Town/Mid-North landmarked area. A guy on his street wanted to renovate one of the old homes that was starting to look shabby. Part of the renovation involved moving the front entrance to his home from the second floor down to the ground floor. (Doesn't seem too unreasonable, does it?) He also raised his fence height to be identical to that of his other neighbors on the block. He did it, and the neighborhood association went insane. He was forced to rip out his new front door, rebuild some stairs, and return his front entrance to the second floor. And he had to go to court TWICE in order to be able to get his fence approved.
Some say that being anti-landmarking isn't good for neighborhoods. Empowering people do use neighborhood associations to pull this kind of garbage isn't good for them either.
A philosophical point or two to keep in mind.
There are two ways in which individuals can deal with one another. By force, or by consent.
Preservation Chicago doesn't want to persuade you, or offer you incentives to preserve your homes in a matter that suits their aesthetic sensibilities. They want to force you to surrender your homes to city bureaucrats, who in turn will force you to do whatever THEY want you to do and what they think is appropriate for a home's facade. You don't have to answer to them now, why would you give tham that power over you without getting a major benefit in return? Why do they get to essentially impose a "tax" on you merely because you bought a house that is old?
One of the offenses the founders of this country had against the King of England as stated in the Declaration of Independence was that:
"He has erected a multitude of new offices, and sent hither swarms of officers to harass our people, and eat out their substance...."
"For imposing taxes on us without our consent..."
"In every stage of these oppressions we have petitioned for redress in the most humble terms: our repeated petitions have been answered only by repeated injury. A prince, whose character is thus marked by every act which may define a tyrant, is unfit to be the ruler of a free people...."
"We, therefore, the representatives of the United States of America, in General Congress, assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the name, and by the authority of the good people of these colonies, solemnly publish and declare, that these united colonies are, and of right ought to be free and independent states; that they are absolved from all allegiance to the British Crown, and that all political connection between them and the state of Great Britain, is and ought to be totally dissolved; and that as free and independent states, they have full power to levy war, conclude peace, contract alliances, establish commerce, and to do all other acts and things which independent states may of right do. And for the support of this declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor."
Oh, and don't forget that final clause in the Fifth Amendment to the U.S. Constitution:
"...nor shall private property be taken for public use, without just compensation."
Landmarking is a supposedly public benefit. What is your just compensation?
And just to round out the discussion, here is a clause from the Fourteenth Amendment:
"...nor shall any state deprive any person of life, liberty, or property, without due process of law."
If you are deprived of property rights merely based on Aldermanic whim (City will landmark you if your alderman wants it; they will not landmark you if she doesn't), I don't care how many forums the city sponsors to let you vent your frustrations on the record; that is not really "due process" of law.
Beware those who disparage you for asking "What's in it for me?"
To me, it is a pretty simple thing. Your property comes with a bundle of rights. You paid for that full bundle of rights. Landmarking takes away a piece of those rights. What value are you getting in response to that???
You'll hear people say that sensible urban planning is essential to our civilization, and that landmarking is necessary part of that planning.
Well, that's a nice social-utopian statement, but ask yourself: who decides what is "sensible"? Who decides what is "essential"? Is it a city bureaucrat, or neighborhood association, or anyone else claiming to speak on behalf of "the public"? Just remember -- it isn't you. And when you are paying the mortgage, maintaining the property, writing the check for homeowner's insurance, those types aren't going to be there to help you.
When eminent domain gets really bad
Consider this to be the extreme end of what happens when individuals are not considered by the government to have any property rights (or personal human dignity deserving rights, for that matter).
Top five problems with landmarking
Well, I can come up with more than five, and some are of more of a fundamental "this is America philosophical freedom personal liberty" type, but here are the ones that the landmarks people definitely will NOT tell you.
1) If you are landmarked, your homeowner's insurance costs will go up. Here's the situation. When you insure your home, the insurance company has mathematical tables that it relies on to estimate the likelihood of loss, and has estimates on what it would cost to repair/replace a house of equivalent dimensions using standard building materials. That standard insurance policy DOES NOT pay for repair/replacement to historic guidelines, which is what landmarking imposes. If you want that kind of coverage, you either need to get it via having a special policy rider written to cover historic preservation (which costs beaucoup bucks), or by overinsuring your home generally (i.e., if you have a $500K policy, you should at least double it to be a $1M policy).
State Farm, for example, has the following language in its homeowner's insurance policies:
"2. We will not pay for:...
(c) any increased cost to repair, rebuild or construct the building caused by enforcement of building, zoning or land use ordinance or law."
Guess what? Landmarking is a "land use ordinance" that increases the cost to repair, rebuild or construct a building.
To give an example of the difference between what a standard insurance policy would cover versus what you would need for historical coverage, try this. Assume you have a house with a front porch. During a storm, a tree limb falls off and crashes down, taking down part of your porch roof, railings, and maybe even takes out a part of the window. Standard insurance would cover ripping out what is damaged, and rebuilding with stock materials (i.e., what you get from Home Depot on the higher end). But if you are in a landmarked district, you can't get something "off the rack." Rather, you have to salvage and reuse as much of the original materials as possible; repair the original materials that are broken using historical methods; and if you MUST replace something, your replacement parts have to conform to historic specifications and materials, as set forth in the US Department of the Interior guidelines. What that means is that if your porch railings had a hand-turned post topper, you have to have a new version made by hand, and made to look identical to the original. Ditto for windows. STANDARD HOMEOWNER'S INSURANCE DOES NOT COVER THESE EXTRA COSTS. If your insurance company says that it would cost you $10 to fix a broken porch balustrade using stock wood you could pick up at Home Depot, but Landmarks commission says you have to have a new balustrade custom-milled using a hand lathe, at a cost of $200, YOU eat that $190 cost differential; you can't get your insurance company to pay for it under a standard policy, because they do not pay for increased costs associated with complying with local land use ordinances.
2) If you are landmarked, you are surrendering control of your home's exterior to the City's landmarks department and your local neighborhood association for design review. Oh, and the landmarks folks always say that they are interested in your facade. Well, there are two problems with that. First, people have very different interpretations of "facade." City landmarks tends to view facade as "any part of your house, porch, roof or garage that can be seen anywhere from the street, sidewalk, neighbor's yard, public alley, or any other public access route." It is not merely the side of your house that faces the street. Second, let's be realistic: we live in Chicago, city of scratch my back I'll scratch yours. The second you surrender control of your front, you effectively surrender control of the back, because once you need a permit for something to get done on the front, a city bureaucrat can "suggest" that if you make a change to your back, your permit will be approved tomorrow. If you disagree, well, maybe that permit application will sit on my desk for six months while he thinks about the facade impact. (Or forces you to go get a lawyer, or complain to your Alderman). If you are not landmarked at all, he has no power or control over you. Which would you choose?
This is why we should always be very, very careful of surrendering even a portion of our property rights to anyone else. Particularly people who we don't even elect.
Oh, and when you are landmarked, neighborhood associations get a say in the process too -- so not only do you have to convince Landmarks department, your alderman, and the buildings department that your home renovations should be done, but now your neighborhood association gets design review too. And for those talking about preserving the character of the neighborhood, think about what it does to neighborhood character when the members of the neighborhood committees having the power of design review are called the "neighborhood nazis," as in Old Town.
It may make you wonder, who is paying the mortgage and the taxes here? But I digress.
3) Landmarking has no impact on your property taxes. It is a persistent myth the pro-landmarks people use, but we'll debunk it again. Landmark designation will NOT freeze your property taxes. There is already in place a State of Illinois program where, if 25% of your home's value is put into historical renovations, in accordance with their guidelines and approval process, your property taxes can be frozen for a period of 8 years, with a successive steps back up to market levels for the final four years. You do NOT have to be landmarked under the City of Chicago to take advantage of this program AT ALL.
4) Landmarking under the City of Chicago ordinance takes away one of the few economic benefits to historic preservation -- a historic facade easement donation. This involves a slgihtly complicated tax issue, so if you want more information about this, DO NOT rely on this post alone, and please, please, please contact a qualified tax attorney who can give you the details, rules and requirements. The gist is this. The IRS allows owners of historic properties to donate a permanent easement on the facade of their home to a preservation council (i.e., Preservation Council of Illinois). The devaluation (or portion thereof) in the value of your home as a result of this easement can be used as a charitable deduction against your income taxes. In essence, the IRS lets you deduct the loss of your home value for the "charitable gift" of a part of your property (facade of your home) you made to the preservation society. Once you are subject to City landmark ordinance, which controls the facade of your home and obligates you to preserve it, you can't take that deduction anymore, because the landmarking ordinance already transferred from you to the City the property rights associated with control over the facade of your home.
5) Lagging property values over time. This is a biggie. In Lincoln Park, we had a study prepared in which we compared the relative appreciation rates over time of the Lincoln Park Sheffield neighborhood (the area that Vi Daley wanted to landmark) with the relative appreciation rates of the homes in the Mid-North district (same distance north as Lincoln Park Sheffield district, but closer over to the lake), which has been landmarked for the past 20 years. We found that the average appreciation rate in Mid-North was on the order of 15% per year. In Lincoln Park's Sheffield district, it was 20% per year. Now, granted, both areas appreciated in value over that 20 year period (I should hope so!). But when you consider that one area is oupacing the other by 5% each year, and start compounding that difference over home values each year, that is some serious lost appreciation opportunities. A 25% difference in value on homesites valued at over a million dollars ... you can do the math. Ask yourself how the benefits of landmarking (if there are any) can even come close to compensating you for that lost value.
Why Andersonville, why now?
It is the same pattern repeated again and again.
There is an organization in Chicago that calls themselves "Preservation Chicago." Though they claim to have an interest in presreving properties, they don't do any of that sort of hard work themselves. Rather, they try to impose City of Chicago landmark designation on all of the neighborhoods that they like, and really don't care what the people affected by the process want or think.
Here is an overview of their modus operandi.
Preservation Chicago, usually in the form of their president, Jonathan Fine, goes to meetings of the local neighborhood association and asks if they would allow Presrevation Chicago to make a presentation on the benefits of landmarking. With all good intentions (because it never hurts to listen, right?) the neighborhood association lets them do a presentation. It is (perhaps unsurprisingly) misleading and biased in favor of landmarking. They use fear tactics that a local neighborhood is on the verge of destruction from evil tearing-down developers, with ugly "McMansions" soon to take their place. (They are currently using a Lincoln Park block on Burling street to illustrate this point, but fail to disclose that this particular block was originally blighted and run down compared to the rest of the neighborhood, and given a special zoning exemption, which caused turnover of the dilapidated housing stock to be replaced with bigger buildings that could never have been built but-for the special zoning exemption. Proof positive that it is zoning, not landmarking, that has the most impact on the character of your neighborhood. Oh, it also turns out that in the heart of Lincoln Park (Willow to Belden, Halsted to Sheffield), the area Preservation Chicago wanted to get their hands on, less than 1% of the properties in the area had whole-house demolition permits issued by the city within the last five years, and for the most part the neighborhood was happy to see houses like the 1950s wood frame and another one covered with asbestos shingles get replaced with newer brick and stone single family homes).
Preservation Chicago tried this last year with us in Lincoln Park's Armitage/Sheffield district. They pushed it through on West Town (and the West Town property owners have seen property values that were appreciating rapidly suddenly freeze, so much so that people are now advertise their properties for sale as "non-landmarked"). They're starting this process in Bucktown. Ditto for anyone with a greystone in Lakeview. And now they've set their sights on Andersonville.
Preservation Chicago holds out landmarking as the neighborhood holy grail, but never tells people about what landmarking really does to your property, never explains what happens once the process gets underway with the city bureaucracy and never informs people about the very real downsides.
Why don't they pain the whole picture? Because once people realize what is actually being taken away from them, they reject the idea.
So what Preservation Chicago tries to do is get the neighborhood association reps and the alderman sufficiently invested in the process that they won't want to look back. And, they don't want to give people opposing the idea to get organized. And they definitely want to make sure that the Alderman does not hear that there is opposition to the idea. They want to keep her in the dark as well as to what people really think, because landmarking, unlike aldermen, is forever.
Here is what we know about what they have done so far in Andersonville.
Preservation Chicago made their initial presentation meeting to the Lakewood Balmoral Residents Council in July of this past year. They did a second presentation in November, imported their own members to the meeting, and took a "straw poll" saying that everyone was in favor of landmarking. They refused to answer people's questions. It was then reported to the LBRC that "everyone" was in favor of landmarking a district in Andersonville.
The proposed boundaries? Everything from Foster (south side) to Bryn Mawr (north side), and from Magnolia (both sides) to Wayne (both sides).
Now LBRC, thinking that "everyone" wants landmarking, has established a committee to investigate landmarking, and will sponsor "coffees" on a block-by-block basis where Preservation Chicago will tightly control the meeting, who gets to speak, and who gets to attend. Having controlled the meeting and the information flow, Preservation Chicago and LBRC will then report back that having consulted "everyone" living on the blocks in question, landmarking is a good idea. They'll get the Alderman to sign off on the deal, and then you are effectively landmarked.
You may be asking at this point, Don't I get a vote? Theoretically, yes. In reality, no. Here is why.
The landmarks bureaucracy has NEVER, EVER rejected a request for landmark districting that is requested by a local alderman. Under the Landmarks ordinance, the city is obligated to send out ballots to the property taxpayers and see if they want it or not. But, the Landmarks ordinance specifically states that even if a majority of property owners vote AGAINST landmarking their properties, the Landmarks Commission (9 people appointed by the mayor, no-one is elected; Senator Obama's wife is one of them) can landmark you anyway. Unless the entire City Council votes within a year to overturn their decision, you are permanently landmarked.
So what do you need to do? Get involved with the process NOW. We will be collecting information here to pass on to homeowners about landmarking in Andersonville. We will let you know when neighborhood association meetings are, how to contact your Alderman, and what you can do to let your neighbors know. You can email us at email@example.com with any questions that you may have as well.
To be blunt: if your Alderman recommends you for landmarking, you will be landmarked. If she does not propose a district for landmarking, your property rights are safe.
To be fair: it does not appear that your Alderman is pushing for this herself, and is willing to listen to what the people in her neighborhood actually want, which puts you in a far better position than the one we were in when Vi Daley wanted to landmark Lincoln Park, and certainly much better than the poor people in West Town who got screwed over by Manny Flores.
Please use this site to educate yourself as to who your alderman is, when meetings impacting your block will be taking place, and what you can do to protect your property rights. The post prior to this one gives your Alderman's info; the next one will give some of our top reasons why landmarking property under the current ordinance will make it harder, not easier, for you to maintain your home in your neighborhood.
All the best,
Now Preservation Chicago has targeted the Lakewood-Balmoral Historic District in Andersonville for landmarking. It seems that Preservation Chicago has convinced the board of the Lakewood Balmoral Residents Council (LBRC) that neighborhood tear-downs are imminent and that landmarking is the only way to stop that from happening. Of course tear-downs are not happening or even threatened in the neighborhood. In fact, a number of beautiful renovations have been completed or are underway. But it seems that renovating historic properties by individual neighbors to suit a property owner's taste is not enough for Preservation Chicago. Preservation Chicago would rather impose THEIR views and a city bureaucrat's views on what your property should look like and how it should be restored. Preservation Chiago is again calling the shots and running the so-called "informal coffees" process seeking community input on this. Naturally, Preservation Chicago has not found a single person opposed to landmarking -- of course, they won't even allow anyone opposed to landmarking to explain the downsides. Area homeowners report that the process is being tightly controlled and that the information Preservation Chicago provides is inaccurate, misleading and biased and that any disagreement or attempts to present balanced information are being stifled by the LBRC board.
To express your concerns about the biased process set up by Preservation Chicago and the LBRC board and to voice your opposition to ceding your private property rights to the Chicago Landmarks Commission, contact:
Alderman Mary Ann Smith
5533 N. Broadway
Chicago, IL 60640
Phone: (773) 784-5277
Fax: (773) 784-5033
The point person on this in her office is Marge, who can be reached at 773-293-8412.
As part of their continuing quest to ensure that people can't do what they want with their property, Preservation Chicago has decided that the Wrigleyville Rooftops are now an endangered feature.
Mind you, NOW they don't complain that the rooftop clubs are bad -- why, they add to the neighborhood character! (Of course, if the underlying buildings had been landmarked in the first instance, you would never have rooftop clubs in the first instance, because that would have been a facade alteration that you could see from the street, and hence prohibited. But no-one ever brings up those inconvenient little facts on the benefits of freedom, it seems...).
The back story is essentially this. Several years ago, the Cubs' owners sued the rooftop clubs, saying that they were siphoning off millions in revenue from the Cubs by allowing people to watch the games for free. (This was driven, in part, by the rooftop owners' concern that the expansion would put them out of business). Lots of lawyering going back and forth, with an eventual settlement in which some rooftop owners agreed to divert roughly 17%ish of their revenues back to Tribune & Co. as "compensation".
Now, the Cubs also want to raise their bleacher numbers, which would obstruct the rooftop views; so the obvious proposed solution is to let the rooftop guys build higher. Then everyone wins, right? Cubs get more bleacher seats, and more people get to enjoy the Cubs experience each season. Rooftop owners' investment in the rooftop clubs won't be wrecked. Alderman Tom Tunney gets to call himself a miracle worker.
But Nooooooo, says Preservation Chicago. If they allow THAT, why they might build some really high steel and glass structures, which are prima facie UGLY, and now we won't have charming brick and stone to look at as the outfield backdrop anymore! Tragedy! Stop the presses! Danger, danger, danger! One of the 7 most endangered areas in all of Chicago!
Ummm, shall we take a deep breath, think, "calm, blue lake," and consider that when the Cubs raise the heights of the walls of the friendly confines for bleacher space, what Preservation Chicago thinks they'll be looking at? Is the brick and stone going to magically levitate to satisfy their aesthetic pinings??? And what, pray tell, is the safest material to use to ensure that you don't have the rooftops caving in on the original 100+ year old walls?
Can't we at least agree that maybe the whole effete elitist thing is getting a bit out of hand when a good chunk of the affected area involves a rooftop-wide "Budweiser" beer ad?
Their constant theme is anti-change, freeze everything. That is not what our city is about.
Sheesh. It's a good thing Mr. Fine didn't accompany the soldiers occupying Fort Dearborn. With the Preservation Chicago mentality, we would never have had the glorious buldings along Michigan Avenue just south of the river; rather, we would be listening to speeches about the beauty of the wood grain in the stockades...
The farce, continued. Pity the residents of West Town.
So, surprise, surprise, the Landmarks Commission voted to landmark a good chunk of West Town. And what did they base it on?
Well, apparently the area exhibits the "theme" of what was termed "ethinic succession." That is, its multiple architectural styles and building types that were popular in the 1880-1920 time frame is reflective of the residences constructed in Chicago's German, Polish, and European immigrant working class neighborhoods. (Next up: landmark the CTA's housing projects on the South Side, as evidencing the compelling theme of misguided attempts by 1960s "activists" to bring about socially-engineered utopia).
The Landmarks Commission arrived at this conclusion via the City of Chicago's preservation expert. This "expert" conceded that he had never testified that there was not a landmark-worthy area when retained by the City of Chicago. Hmmm, no bias there.
He testified that he had NOT compared early photos of the properties in their original construction to the properties in their present form. This is a critical issue, for one of the landmark challengers introduced proof that her home's so-called historical features had been added to her home AFTER she bought it. It was ignored. As such, even though the Landmarks Commission legally cannot approve a landmark district unless the original integrity of the struture has been maintained, they voted to landmark anyway.
Oh, and the City's expert admitted that he only spent three, maybe four days wandering the neighborhood to arrive at his opinions. Even if we assume that the guy was a little trouper, and didn't stop to eat lunch or take bathroom breaks over the course of his eight hour days, and we assume he did this over four, not three days as he first stated, that means that his analysis of homes within the area under consideration deemed landmark-worthy averaged less than 7 minutes per home. (4 days x 8 hours x 60 minutes/hour = 1920 minutes; approximately 300 properties are in the scope of the district).
Think about that for a second: People's property rights (to at least their facade and beyond) are permanently GONE, based on a seven minute walk around by some hack academic. Does that sound like the homeowners were given Due Process of law??? Nope.
And now the proposal goes to City Council, where if they don't vote to reject it within a year, it becomes an effective district (guess how often they vote to reject...). Oh, and the average Joe citizen can't exactly stand up and move the City Council to vote to reject it. And I don't think Manny Flores is really up to the job either; I think he'd rather start laughing as his campaign coffers start to fill from everyone who will need him to sign off with approval on their building projects.
Proof yet again that the totalitarian impulse is everywhere.
The short version of why landmarking is not good for West Town.
This is the "short" version of a longer post from Saturday (see below for details).
In essence, landmarking will not be a good thing for West Town on a district-wide basis because:
1) The bureaucrats inevitably lead to additional delay, hassle, and expense, driving the good developers elsewhere, and screwing over the Average Joe who is not politically connected;
2) Landmarking will slow, if not stop, any naturally occurring gentrification and growth in an area. This disincentivizes businesses from moving into the area; developers from getting rid of the housing stock that should be gotten rid of; and encourages cheap rentals/abandonment of homes, leading to added blight in the neighborhood. If a rising tide lifts all boats, landmarking suppresses the tide from ever coming in.
3) Landmarking fixes the property tax base at an artificially low level. At the same time, the people who are hardest hit by this -- and who will bear their disproportionate share of property tax burdens -- are those who own new construction. (Math is done exemplifying this in the Saturday post below).
4) City of Chicago district-based landmarking takes away one of the major economic incentives for preserving an older home at the federal level (charitable donation of a facade). (See archived posts on this blog for details), and is not required for you to participate in the one state program available to homeowners for historic preservation of their homes.
5) Homeowners insurance. Good luck getting the lowest rates on homeowners insurance if you are in a landmarked district. We've talked to insurance brokers. It won't happen. (Again, see archived post on this blog for details as to why).
Again, let me reiterate: there is NOTHING that prevents someone who is the owner of a vintage home from putting a deed restriction on the title to their property requiring the building to be preserved, or independently pursuing landmarking of their own home. In fact, you could even offer to buy an easement to someone's home restricting teardowns, or some such.
But for those who walk around West Town, keep in mind that the ostensible goal of landmarking is to freeze the facades as-is. Ask yourself -- is this the best we can do???
West Town meeting
There will be an open meeting for those interested in learning about the effect of landmarking sponsored by West Town homeowners.
Meeting location: Leona's, at Agusta and Damen.
Time: March 24, 2005, 7pm.
I have been asked to speak. Alert your neighbors!
Other posts to check out...
Sample letter written to Alderman Daley opposing landmarking -- see October 29, 2004 post.
The myth of the one day permit turnaround. See October 21, 2004 post.
Another Myth Debunked - Property Values Will Not Decrease After Landmarking? Also posted October 21, 2004.
Homeowner's insurance issues - reposts
From October 2004:
One gentleman that I spoke with last night told me that long ago, he had the opportunity to landmark his row home on Lincoln. Was he glad he did not! As it turned out, a neighbor wound up doing renovations to the row house next door. Could not get any indemnifications for construction-related damages. The neighbor wound up cracking his stone foundation. What was homeowner's insurance willing to pay for? Someone to caulk the crack, a minor repair. What would he have had to do if his home was landmarked? Aside from the permitting process, he couldn't have used caulk; epoxy is not considered to be historical building materials. He would have had to replace a nearly 8 foot wide stretch of stone. None of it covered by insurance Do that out-of-pocket-expense math...
And another from October 2004:
One issue that has not been given much attention is homeowner's insurance. We've done some initial checking, and it looks like if you are in a landmark district, it is extremely expensive to insure your home for replication purposes. Normally, if the roof falls in, or you have a kitchen fire and need to re-build, the insurance company assesses what it would cost to repair with modern-day materials, and that is the sum of your reimbursement. But, if you are landmarked, that won't be good enough; you are not allowed to rebuild with modern-day materials; you have to essentially replicate what was previously there, with historical materials, to historical standards, etc. Since the replication costs are outside normal insurance costs, what you have to do is massively over-insure your house to hope that the $$$ will be there. Neither Allstate nor State Farm offer policies for replication costs. [Update: we've learned that if you can get homeowner's insurance through the standard companies, it is not through their normal process; you have to go to their "high risk" program, which is completely separate from their usual homeowner's insurance underwriting process, and costs much more.] No matter what, you are looking at a jump in premiums. Yet another hidden cost of landmarking that no-one wants to talk about.
The facade donation charitable deduction - repost of information from December 7, 2004
Explanation of why I think that City-based district landmarking destroys the one federal incentive offered to homeowners to engage in historic preservation. I give you the background, bit to get straight to the point, look at the text below I've highlighted in bold purple:
An IRS publication from June 30, 2004, dealt with agency interpretations of charitable deductions for real property, whch covers facade donations. A link is provided below. Also provided below are statements by IRS officials regarding the June 30, 2004 publication and charitable contributions for facade donations.
Note that the above IRS publication expressly states that:"If the donor (or a related person) reasonably can expect to receive financial or economic benefits greater than those that will inure to the general public as a result of the donation of a conservation easement, no deduction is allowable. Section 1.170A-14(h)(3)(i). If the donation of a conservation easement has no material effect on the value of real property, or enhances rather than reduces the value of real property, no deduction is allowable. Section 1.170A-14(h)(3)(ii)."
My take on the above is that if a facade donation does not reduce the value of your property, then you get NO charitable deduction. You only get a charitable deduction for preserving your facade if it lowers your property value.
Here also are statements from the IRS regarding the above publication as published in the IRS News on July 28, 2004 (sorry, I don't have a direct link available, but I can fax or email you copies if you email me at firstname.lastname@example.org):
"IRS officials have responded to questions raised by Historic Rehabilitation Advisor, which sought clarification on several issues related to the recent publication of Notice 2004-41 on conservation easement deductions. The IRS issued Notice 2004-41 on June 30  advising taxpayers of its intention to disallow certain improper conservation easement deductions and levy penalties and excise taxes on rule breakers.
"IRS: The Notice states that the IRS is aware that some taxpayers may be claiming inappropriate deductions under Section 170 for conservation easements, and that deductions under Section 170 for conservation easements will only be allowed when all the requirements are met. The Notice applies equally to all types of conservation easements."
IRS Commissioner Mark W. Everson stated in a press release announcing the publication of Notice 2004-41 that the IRS "uncovered numerous instances where the tax benefits of preserving open spaces and historic buildings have been twisted for inappropriate individual benefit." [He continued:] “Taxpayers who want to game the system and the charities that assist them will be called to account.”
"IRS: As Notice 2004-41 points out, overvaluation of conservation easements is a major concern. However, it is not the only concern. Notice 2004-41 highlights several rules and requirements for the allowance of a deduction for a contribution of a conservation easement, and explicitly states that the rules discussed are just a few of the many requirements that must be met for a deduction to be allowed. All types of conservation easement deductions will be subject to scrutiny.
HRA posed the following question: "At the National Trust for Historic Preservation's 2002 Annual Meeting in Cleveland, OH, there was a session on conservation easements. One of the speakers said easements are typically appraised at 5-15 percent of the fair market value of the property - even higher in some cases. What's your [IRS's] reaction to that statement? Is that a fair "safe harbor?"
"IRS: There is no IRS safe harbor or any other IRS rule that provides that conservation easements are valued at 5-15% of a property's fair market value, or at any set percentage of a property's FIVE. When valuing a conservation easement, the rules of Sections 1.170A-1(c) and 1.170A-14(h) of the Income Tax Regulations must be applied on a case-by-case basis. The result may be higher or lower than the 5-15%, depending on the facts of the individual case.
"HRA: How does IRS determine whether a conservation easement dedication may be overvalued?
"IRS: The valuation of an easement must take into account several factors, such as: the current use of the property; an objective assessment of how immediate or remote the likelihood is that the property, absent the restriction, would in fact be developed; zoning, historic preservation, and other conservation laws in place that already restrict the property's potential highest and best use; whether the grant of the restriction either has no material effect on the value of the property or in fact serves to enhance, rather than reduce the property's value; whether the restriction allows for any development on the property, and the effect of the development; the access permitted by the restriction (in the case of an historic structure); whether the restriction has the effect of increasing any other property owned by the donor or a related person; and other factors (this list is not exclusive). The IRS applies these and other relevant factors to determine whether the taxpayer's valuation of the conservation easement is correct. For more information, see Sections 1.170A-14(h) and 1.170A-1(c) of the Regulations."
=====Here also is text from an article reporting on statements made by IRS counsel, Karin Gross, on facade donations (published on November 24, 2004, by the Bureau of National Affairs; anyone who wants the original send an email, and I'll send you my fax copy. Note that I provided a copy of this article to Alderman Daley last week):
“Karin Gross, acting branch chief of the Office of Chief Counsel (Income Tax and Accounting) [said] that there is a misconception among practitioners that donating the façade of an historic building automatically triggers an entitlement to a deduction for a percentage of the value of the house. Gross said that the issue that arises with respect to façade easements, as well as conservation land, is that, if the property is in a zoned area and cannot be modified, the value of the deduction may be very little. ‘You can’t get a deduction for a façade easement if you’re not giving anything up,’ she said, adding that it is an area in which the IRS thinks that there is some abuse.”
My take on the above is that one of the factors that the IRS will use to determine the value of a conservation easement like facade donation, is by assessing whether the present status of the building is already restricted from its highest and best use by zoning, preservation status, and other conservation laws in place. Also, according to IRS counsel, you can't get a deduction unless you're giving something up.
We are repeatedly told that landmarking under the City's auspices means that the Landmarks Commission will be most concerned with preserving the facade of the building. That would seem to confirm that a facade donation will, under IRS rules, be viewed as already subject to restriction from its highest and best use as a result, and that given the restrictions that will already be in place on your facade, a donation of it will mean that you are not giving anything up. Hence, no deduction; hence, no more benefit, at the federal level, for preserving your facade once landmarked.
These obviously are complicated tax issues that should be discussed with competent legal counsel for anyone thinking about a facade donation.But in the larger view of things, it is wholly incorrect to suggest that landmarking a block or district will have no impact on people's ability to get a charitable donation for facade donations.
One issue that came up at a block meeting was that it seemed like there were insufficient economic incentives to encourage people to rehab and restore older buildings. Ironically, landmarking the district may reduce, if not eliminate, the one major economic incentive people have at the federal level to protect older buildings.
Top five reasons why district-based landmarking is not good for West Town
1) Landmarking adds a costly layer of bureaucracy to any building-related project (whether a store owner changing his windows, a condo association repairing a roof, or a developer putting in a single family home, and whether old or new construction), and the added expense, delay and hassle of directing all permits through landmarks commission is one that cannot be recouped, and is borne by the property owners.
2) Landmarking will stop gentrification and growth in an area. This is a good thing only for those people who want to keep out "those people," whether for elitist or racist reasons. For business owners, slowing gentrification means fewer new homes, residents, and growth -- so businesses will relocate elsewhere, or will be slow to come to the area in the first instance. For developers, they will go to other neighborhoods where they can operate profitbly, and depart the neighborhood. For homeowners, both effects will drop your property values, and will also deter those who would otherwise buy property for invest and hold purposes in the area. Narrowing the market of people looking to buy your home necessarily drops what you can get for it in the open market.
2a) And, with time, slowing the teardown/rebulding process means that you have a higher proportion of abandoned or rental properties in your area. This is death to property values. (And particularly so in an area transitioning away from being a high crime area -- abandoned or cheaper rental property is an invitation to blight, and introduction of a criminal element).
2b) And, slowing the ability to turn lower-end-use properties into either higher end single family homes or condo developments means that you do not have the market forces that drive prices higher over the long run. If a rising tide lifts all boats, landmarking suppresses the tide from ever coming in.
3) Landmarking fixes the property tax base at an artificially low level. By preventing properties from being turned over into their highest and best use, the city loses all kinsd of tax revenue -- and this effect is permanent.
3a) Owners of newer construction will most likely feel the biggest brunt of the property tax increase. An example: assume you have two small old wood frame homes with an assessed value of $200K each. That leads to city property tax revenues of roughly 4K total (property taxes are usually about 1% of the fair market value of a home). Without landmarking, these homes are torn down, replaced with a condo 3-flat and single family home, and in five years the 3-flat condos collectively are worth $1.2 million and the SF home is worth $1 million. That leads to property tax revenues of $22,000, an $18,000 annual increase. And the tax revenue increases are paid almost equally by each individual property.
Now, assume that your city government will, in fact, spend at the $22,000 level, not the $4,000 level. (Not a stretch of the imagination required for that one, is there?). Landmark before both properties are developed, your FMV will stay stagnate, if not deflate. Landmark after your condo development was built, but before your single family home is built, you have the condo owners paying $12K with the old property still at $2K, for a combined $14K. Where is the extra $8,000 in lost revenue going to come from? Well, assume that the tax rate is increased to compensate. The new construction, having such a disproportionately larger value, will not share the added burden equally with its neighbor (i.e., 4K each). Rather, it will bear six times the added property tax burden. Here's the math:
What tax rate do you need off the FMV of the property to arrive at $22K for our two properties (condo property worth $1.2 million and old SF home worth $200K)? The answer is about 1.6% of the FMV. (22,000 is 1.6% x $1,400,000). Multiply 1.6% times our 1.2 million, you get $19,200. The old undeveloped house pays $3200. In other words, over $6,000 in property tax revenues are generated from the cond folks that they would not have had to pay had the second property been developed.
Take-home-message comparison then?
Both properties developed with condos and new SF home, which occurs without landmarking: condo owners pay $12,000 in property taxes, SF home pays $10,000. About equl tax burden for each lot.
One condo property developed, old home is landmarked: condo owners pay $19,200 in property taxes, an over 50% effective increase in property taxes, even if the tax "rate" only goes up to 1.5% of the FMV. Old home pays $3200. Tax burden of the condo lot is six times higher than that of the old home lot.
4) City of Chicago district-based landmarking takes away one of the major economic incentives for preserving an older home at the federal level (charitable donation of a facade). (See archived posts on this blog for details), and is not required for you to participate in the one state program available to homeowners for historic preservation of their homes.
5) Homeowners insurance. Good luck getting the lowest rates on homeowners insurance if you are in a landmarked district. We've talked to insurance brokers. It won't happen. (Again, see archived post on this blog for details as to why).
Well, that didn't take long...West Town
Shame on me for musing on what next to do. Having been contacted by the owners of West Town, there is plenty to do.
Jonathan Fine and the Preservation Chicago folks, along with a self-appointed neighborhood organization called the East Village Association (acts in a capacity similar to RANCH and SNA) have convinced Manny Flores (1st Ward) that all of West Town needs landmarking. West Town is in the process of gentrification, with teardowns and newer condo buildings going up. Some of their members are engaging in activities which would be comical if not so tragic; people posting signs against landmarking have had them ripped down, been screamed at, been photographed and told that they are being watched. Good grief. As my darling husband says, what a bunch of @$S%--&S. (He says this when the offspring is asleep, don't worry).
And, of course, expect the Alderman to take those who have a major stake in the process to try to start the buyoff process, particularly developers with their permits, to try to make it seem like he has had full support from across the spectrum. (We got a whiff of that with Alderman Daley as well, didn't we???)
Well, at least Alderman Daley had the excuse of not being a lawyer, or at least blaming her confusion in Chuck. Alderman Flores does not.
Regrettably, Alderman Flores seems to not have absorbed his Constitutional Law (don't even get me started on ethics) at George Washington University -- my law school alma mater as well, BTW. (Insider musing - he probably had John Banzhaf for torts (they guy who says sue McDonald's for making you fat), Paul Butler for criminal law (juries should on principle refuse to find people guilty of drug cromes), and one of any number of other left-wing moonbats for professors. But the nuttiness of the Academy is a topic for another day).
Also, it seems that Alderman Flores is being seduced by the cheers of landmarking folks (feel good about using your government power to steal people's private property! (That is a taking, after all, without just compensation)). I've been told that Manny likes media attention, and his is one of the few websites with a photo gallery of the Alderman. (But then again, some of 'em ain't so great to look at, so perhaps we shouldn't judge that too harshly).
Well, maybe when the West Town neighborhood gets landmarked, and the local businesses and property developers flee, they'll stick around to give him an award. But if that is all it takes to get him on your side, I'm always happy to give out the Theiving-Politician-With-A-Smile of the week award.
(I would be willing to give him the Takes Away Your Life, Liberty and the Pursuit of Happiness award of the month, but that one, I think, was preempted by Judge Greer down in Florida, who has issued a court order to starve a mentally disabled woman to death. See http://www.nationalreview.com/mccarthy/mccarthy200503170758.asp and http://www.opinionjournal.com/columnists/pnoonan/?id=110006442 and http://www.terrisfight.org/ for the gruesome details)
Anyway, here is the scoop.
West Town is roughly the area bounded by Damen and Ashland to the east and west, and Chicago and Division to the south and north. Its proximity to the city, along with increased development in River West, has led to gentrification in recent years. This ticks off some of the old time locals, who liked things the way they were, and Jonathan Fine, who never met an old building in Chicago that could be improved.
The same myths that were told to get the Lincoln Park landmarking process underway (Landmarking will freeze your property taxes! Landmarking stops tear-downs! Landmarking adds value to your property!) are being regurgitated anew.
Once again, only a decision by Alderman Flores to not landmark the area will prevent it from happening.
I'm going to go back and update a few posts on these topics -- I've been in contact with some people who are leading the West Town anti-landmarking efforts, who will be directing people to this site.
Gotta give Alderman Daley some credit -- she was smart enough to realize that with a bunch of lawyers and sophisticated business professionals in her neighborhood -- not to mention a declared opposition candidate for the next election -- she had to at least give the illusion of a fair process. Alderman Flores isn't even bothering to give his constituents that. Not the most politically brilliant move for a guy who plainly has onwards and upwards on his mind...
Discussion of how regulating everything makes us all criminals.
One of the concepts I always found fascinating from Ayn Rand's "Atlas Shrugged" (several flaws in her philosophy, no question, but a more screaming damnation of communism than even Orwell) was the idea that the more collectivism/regulations you have, and the more subjective, rather than objective, your rule of law, the more you punish the law-abiding and empower the bureaucrats. A nice brief discussion is here:
This theme was given a different twist here, called "distributed governmental stupidity."
The authors are discussing how the use of the web and blogs can influence politicians, and hopefully prevent them from enacting more stupid laws that lead to more problems, which require more laws to bring about "solutions," which creates a whole new host of problems, and a new class of "solutions."
In my personal experience with the city of Chicago, I've witnessed firsthand how city bureaucrats (and federal agencies) can wield power to harm the average Joes who are just trying to own their home, or run their business. And argue that in doing so they are serving a larger purpose.
Not sure where I'm going with this yet. But it has given me some food for thought given how this medium was invaluable for many of you for staying informed in opposing the landmark districting initiative...
Alderman Daley announces...
So the people have spoken, and there will be no blanket landmarking within the Sheffield neighborhood for the moment.
After all the drama and heartache, what it all boils down to is that a mere four blocks (800 Belden, 2100 Bissell, 2100 Fremont and 2200 Fremont) expressed sufficient support from the number of ballots received that will permit her to continue discussions. (Which, based upon what she said during block meetings, means either that it probably was close to a 50:50 split, or that she got very low ballot turnout). Supposedly she will be holding another round of meetings with those block residents, along with Brian Goeken from the Landmarks Department, to see if the residents on those blocks really want to landmark themselves. No word yet on whether I'll get an invitation to present the anti-landmarks view; somehow, I doubt it. I'd be happy to debate Jonathan Fine on the issue any day though.
If you are a resident on those blocks, and receive information about the upcoming meetings, please let us know so that we can post the information; you can contact us at VOCALneighbors@hotmail.com.
What this demonstrates to me is that people care more about protecting their individual liberty and property rights than about trying to dictate how their neighbors should live. And that's a good thing, I think.
That said, I know that there are further attempts to landmark other areas, such as Howe Street, Deming, and many others in Vi's ward, and in other wards throughout the City. Let your neighbors know about this, and that they can come to us as a resource. No-one should be forced to give up their property rights without their consent. And no-one should have to re-trace our steps in figuring out what their rights are here.
There are several people who deserve to be thanked and who helped out tremendously on the organizational side. I'll send that thank-you around on our private list serve, however; no point in siccing the elitist snobs on ya just yet. ;-)
I hope that you all will continue to check in here and there. This issue raised a whole host of other items that plainly have strong interest within the community (property tax fairness and responsible land use). There also is the issue of the RANCH planning committee guidelines. Let me know your thoughts - I've learned quite a bit through this process; we have a lot of strong and smart people amongst our ranks; it would be a shame if we couldn't marshal that energy for productive uses!
Alderman Daley's decision
All: receiving somewhat conflicting information re when Alderman Daley will be deciding if landmarking is to proceed. Alderman Daley said (at LP Chamber of Commerce meeting) that at the beginning of Feb. she would decide; this past Friday I was told by her office that there was nothing to report; but word on the street is that Chuck Eastwood and Alderman Daley are still consulting with Brian Goeken at Landmarks before making a decision, and would be sending out notices, whatever that means. (This runs rather counter to Mr. Goeken's statement to me at the last Landmarks commission meeting that the decision would be all Alderman Daley's, and that Landmarks would not be involved in it.) Will continue to monitor...
Supreme Court on property rights.
The US Supreme Court today is hearing oral argument on a case titled Kelo vs. City of New London, in which the city is claiming that they have a right to take Kelo's waterfront home and property (via eminent domain) because the property can be put to a higher and better tax use. The city also gave a private organization all kinds of powers to decide what was the "best use" of the land. You can find out a bit more about it here:
Essentially, the issue before the Court is this:
Does the U.S. Constitution allow the government to take property from one private party in order to give it to another private party because the new owner might produce more profit and more taxes for the City from the land?
This is a heavy constitutional issue, because government is not empowered to take land for private benefit; the benefit must be PUBLIC. (And even if public, the homeowners must be compensated for the taking).
I had an earlier post where I noted that if multiple blocks get landmarked, that will necessarily prevent the highest and best use for our property. In the above case, the Connecticut S. Ct. allowed the city to take the property because its value wasn't being maximized. Can you see the long-term thread here? City landmarks property, which itself is a taking of your property rights. Two decades from now, city says land isn't meeting its full potential (duh, 'cause it is landmarked), and can be put to a better use, so seizes it under this principle.
Happy Valentine's Day
So quite a bit has happened over the last few months in our grand neighborhood. Here is a recap.
Alderman Daley conceded at the Clifton block meeting that, having sponsored several block meetings, there was not the support for landmarking that certain so-called neighborhood activists had claimed there were. So let's ensure that the ballots that she sent out reflect that. (BTW, I have heard from several of you that you have not received ballots. Call her office ASAP if you have not received them; they should have been sent and returned by now).
Alderman Daley also stated at a recent Lincoln Park Chamber of Commerce meeting (hat tip, Ed Lowe from Inside newspaper) that she would be making her decision on landmarking in early February. Note that Alderman Matlack has stated again for the record that he has told the landmarks people that he won't support landmarking in his ward after hearing from constituents.
SNA has issued a formal resolution against any district-based landmarking, by an 8-1 vote. Here is their resolution:
The Sheffield Neighborhood Association is opposed to land marking on a district-wide basis. It is the position of the Sheffield Neighborhood Association that landmarking should be done voluntarily on a house-by-house basis at the election of the property owner or on a block-by-block basis only where an overwhelming majority of the property owners on a given block have affirmatively expressed their support for the landmarking of their block.
Based on what happened at the block meetings, this standard won't be met. So if Alderman Daley recommends landmarking any blocks north of Armitage, it will not be with support from the neighborhood association.
What of the blocks south of Armitage, in RANCH's purview?
The RANCH website (www.ranchtriangle.org) does not have their 2005 meeting schedule posted. Keep in mind that elections for new board members will be coming up soon. I know that some of the pro-landmarking people are considering running; after the mess that they've initially created on this process, they should be held accountable, not given a reward.
RANCH's planning committee has also issued their nutty guidelines which basically is an attempt to have design control over new construction in the neighborhood. This will be one of the next things that will need to be opposed - it is FAR BEYOND their mandate.
Be that as it may, that means that the main blocks of interest are Dayton, Fremont and Bissell south of Armitage. Vi has already said that 1800 block of Dayton is off the table. 1800-1900 blocks of Fremont - well, just walk along the street and count up the "no" signs vs. the "yes" signs (34 to 3, last time I checked) and there is no overwhelming majority there.
So that leaves the 1900 block of Dayton and 1800-1900 Bissell, i.e., the blocks of Bill Scott and Diane Levin, who were central to initiating this process in the first place. The Dayton and Bissell block meetings had extremely low attendance, given their proximity to the holidays. Lots of renters on those blocks as well; I doubt that the property owners have gotten true notice. But all in all, I don't see why Alderman Daley doesn't just let Bill Scott landmark his rowhouse and be done with it.
But we'll see what happens next.
Several of you also alerted me to the Jonathan Fine Preservation Chicago press release that claimed that our neighborhood was in dire straits and about to lose its archtectural heritage. (See http://www.preservationchicago.org/C7-2005/C7-2005-overview.asp). Chicago Magazine also did an article on these guys.
Basically, here is their argument:
The entire Sheffield district needs to be landmarked (of course, they say nothing about the fact that landmarking the district will destroy the one economic tax incentive, facade donation, that owners of old buildings have), further downzoned, and that people who aren't landmarked but have old buildings should be penalized for not preserving them.
Oh, and he also says that anyone who doesn't agree with what he says must be disseminating "misinformation" on behalf of developers.
Hmmm. I am not a developer or real estate agent, and neither is my husband. I also provide cites to back up what I post here, and anyone is free to post a correction in response.
I am interested in property rights and the state of my neighborhood, but more on that in a sec.
You may recall that a while back I wrote a letter to Preservation Chicago telling them to put in writing why they thought the Sheffield neighborhood met the landmark criteria. I offered to post it here for all to see. What response did I get? Nada. Zip. Zilch.
Apparently, it is far easier to be a demagogue (or maybe "gadfly" is the more appropriate word?) than to actually persuade people based on facts and reason. Or, actaully do the hard work to raise money to buy and rehab old buildings. I mean, if it is so profitable, he should be able to buy these buildings, rehab them, and sell them -- this would pay for the next restoration, etc. He could then put his own restrictive covenants on the deeds to prevent the buildings from being torn down.
Of course, people with far more skill and experience than he would do so if it was, in fact, profitable. It ain't. Which is why, again, landmarking will hurt the most the very people we should be encouraging to rehab old properties, by raising costs dramatically.
The Chicago Magazine article also made me laugh. The message is, Fine and Moran don't live in the neighborhoods that they are trying to "save." They are big on flash, low on substance. They want to landmark mediocrity (Chris Struminski can attest to that -- a house that has been boarded up and is crumbling down on Dayton just north of Armitage for over a year, Fine told her should be rehabbed, not torn down, because it has a pretty window on one side. Sheesh.). They think that the new construction makes us look like "Anytown." (I'm sure the Metzler-Hull and BCBG folks will be thrilled to hear that).
As one who has lived in Boston, New York and DC, I can tell you that the older buildings that are supposedly so "unique" look just like the older brownstones in those three cities. But that's for another day.
The tale of Moran fighting over a strip of copper was equally ludicrous. Why not offer the guys $50 and put it in the back of your car with you if you want it "preserved"?
If you read between the lines, Fine and Moran have been unable to save any old buildings based on their efforts alone, and the one that they did get some press on, a building owned by the Chicago Archdiocese, has been standing crumbling and vacant instead of being torn down. So, great. Isn't that like cutting off your nose to spite your face? We save the building but get blight in exchange.
Oh, and the theory that Chicago City Hospital should be converted into doctor's offices? Clearly they have no experience in medicine. Just try eradicating the nasty staph infections sure to result without first tearing the place down. (Fact: the nastiest bugs you're going to pick up are likely in a hospital b/c the bacteria -- particularly staph -- get resistant to most antibiotics over time).
But when you read the article, there is no there, there. Fluff, really. But what do you expect from people who thrive on drama?
Ultimately, these guys are treating this as a religion for them -- but perhaps they should recall that we "render unto Caesar the things which are Caesar’s, and unto God the things that are God’s." In other words, we accept laws because we have agreed to live by them, and because they have been arrived at through a just, democratic consent process. Preservation Chicago's insistence that our property rights be taken for their benefit without our consent is morally reprehensible.
ANYWAY. Enough about them. Here's an intriguing contact I recently made: Al Hannah. Basically, he's gonna sue the city if Deming gets landmarked, and the basis of his suit would be similar to one that we would file if landmarked. He has already had great success in fighting City Hall on zoning-related issues, and is perfectly willing to say that this landmarking process is also unconstitutional.
This "process" is turning into a farce
Hmm, people aren't getting ballots, people who call to request ballots who report that they are pro-landmarking are told by Chuck, Vi's chief of staff and her self-professed "right hand man" that he'll put them down for a "yes" to landmarking, and despite overwhelming opposition to landmarking at some block meetings, Chuck continues to say that people are pro-landmarking.
Everyone: it is CRITICAL that you keep a copy of your ballot, forward a copy to VOCAL, and return ballots on time.
The message that I am getting from all of you is that you feel that Vi simply cannot be trusted to support the property owners. She (or, at least, her staff) certainly is not doing much to inspire it.
BLOCK MEETING REMINDER - Dayton, Fremont
REMINDER that tonight is the block meeting with Alderman Daley for the 1800-1900 blocks of Fremont street, St. Theresa's church, 7pm;
The 1900 block of Dayton street will be on the 15th, also St. Theresa's church, 7pm.
It is important that you attend these meetings and speak up; Chuck, Vi's chief of staff, keeps telling people that the majority of those attending these meetings is in favor of landmarking, despite the fact that every meeting we've had people attend has had at least 60-80% opposed to landmarking, 1-3 people in favor, and the rest feeling somewhat blindsided and needing more information. Naturally, Vi has never told people that they can get the anti-landmarking view by viewing this site, though she is having her staff monitor it.
What you have to "look forward" to if landmarked.
One issue that has been raised vis. landmarking is that it will impose extra layers of bureaucracy on the building approval process, including requiring neighborhood association approval for some things. Some have suggested that this won't be a big deal; others have pointed to Old Town as an example of neighborhood associations run amok.
Here is something for you to consider:
Last night at the RANCH Triangle neighborhood association meeting, the following guidelines were handed out; these Residential Planning Guidelines were adopted unanimously by the 6-member RANCH planning board (which includes Bill Scott and Diane Levin, two of the people who have brought you the block or district-based landmarking proposal in the first instance). They have not yet been adopted by the full RANCH board. You may want to contact RANCH board members to express your thoughts once you read them. You can contact Rich Chehoven at email@example.com.
(Background: You may not be aware, but anyone who wants a zoning variance has to go before RANCH's planning board to attempt to get their approval for the variance; many other redevelopment proposals also go through the RANCH planning committee. This is Vi Daley's way of obtaining community blessing on the projects.)
These "guidelines" are supposed to be what you need to do to make the planning committee happy. What do they include?
-The planning committee will look "most favorably" on rehabs, not rebuilds.
-They want any new development to have comparable design, building materials, etc. consistent with the historic residential and commercial structures in the neighborhood.
-They want a facade that is "compatible" with the other buildings in the immediate area;
-They want your building materials to be compatible with other buildings, and "specifically discourage" any use of split face block, cinder block, and dryvit on any exterior surface;
-They want to require a minimum of two parking spaces per residential unit.
In other words, the RANCH planning committee is attempting to impose their personal design aesthetic and elements of landmarking on people by default via their review process.
Keep in mind, that the people sitting on this committee are not required to have any architectural/building experience or any other credentials that qualify them to decide what is or is not historically consistent, compatible, etc.
They also put in a whole laundry list of things that they want people to bring with them (floor plans, drawings of elevations, locations of trash receptacles, etc.) to even get the process of review started.
Anyone wanting a copy of these please email firstname.lastname@example.org; I'll forward on a copy to you.
My two cents: I have no problem with establishing a process for securing the planning committee's approval if that is required to do a teardown, or seek a zoning variance.
But my question is this: why is the emphasis NOT on securing consent of the people who will have to live with the consequences of the variances on the block? I have a feeling that if you are the guy next door to the property seeking side-yard variances, you are going to care a lot more about the extent of the intrusion towards your house than whether the siding will be dryvit.
There are also some statements about you have to present a reason why you need the variance, but there are no criteria for what that "need" is. Wouldn't that be the better emphasis of this document for people seeking variances (and in spirit of deciding whether a variance is required or not) than whether the building facade is made up of brick?
Put another way, why aren't the criteria more along the lines of:
-if the requested variance is for reduction of side yard, we'll give approval if deviance is less than X%, with neighbor consent; if greater than X%, need neighbor consent, and have to justify expansion for building structural reasons (or to meet certain building code requirements, or because you are losing space on the other side because of drainage issues, etc. etc.)
-if the requested variance is for exemption to height restriction, we'll give approval if buildings on either side would already exceed your requested height; we will require neighbor consent side to side and front to back if you want to exceed by X feet or 10% of total, etc.
The above allows for objective, predictable standards that can actually be planned for. "Your facade isn't historical-looking enough without a window over the door" is NOT an objective standard, predictable in advance.
Maybe I am missing something. I would be interested in hearing what architects, builders and homeowners who have gone through this process have to say about these types of things.
Quote of the day
Sorry, all: I just couldn't resist. This was from the December 6, 2004 article written by Thomas Sowall (nationally syndicated columnist):
"If people are free to do as they wish, they are almost certain not to do as we wish. That is why Utopian planners end up as despots, whether at the national level or at the level of the local 'redevelopment' agency."
Substitute "landmark" for redevelopment in the above quote and I think you get the idea of why many people are opposed to adding a few more layers of bureaucrats to dicate how we use our property.
Another question re penalties
One question that came up at a block meeting is whether you can be penalized from doing work on your landmarked property without a permit. Here is the Ordinance on that issue, reprinted verbatim:
Penalties and Remedies
2-120-910 Penalties and Remedies. The following penalties and remedies
shall be applicable to violations of this ordinance:
1. Penalties: Failure to perform any act required by this ordinance or
performance of any action which is prohibited by said sections shall
constitute a violation thereof. Every day on which a violation exists shall
constitute a separate violation and a separate offense. Any person violating
any of the provisions of this ordinance shall be subject to a fine of
not less than $500 nor more than $1,000 for each offense. In addition, if
the owner of property designated a "Chicago Landmark" willfully or
through gross negligence causes all or any part of the property to be
demolished or substantially destroyed or altered without the approval of
the City Council or the Commission, as the case may be, then no permit
to construct a new structure or improve said structure shall be issued for
said property or for the land upon which the landmark stood within five
years of the date of the demolition or alteration. Thereafter for a period
of 20 years, commencing at the end of the five-year period herein before
stated, any application for a building permit on the subject premises
shall follow the procedure heretofore set out in Sections 2-120-740
2. Remedies: Notwithstanding the provisions of subsection (1) hereof,
in the event any building or structure is erected, constructed, reconstructed,
altered, added to, or demolished in violation of this ordinance,
the City of Chicago may institute appropriate proceedings to prevent or remedy such unlawful erection, construction, reconstruction, alteration,
addition, or demolition.
In other words, if you fail to perform "any act" required by the Landmarks Ordinance, you get fined no less than $500 per day. What does "any act" include? Well, it certainly includes permits. So if you are the owner of a landmarked property and you cause any part of your property to be demolished or "altered without the approval of the City Council or the [Landmarks] Commission," then your penalty is that you get NO permits to construct anything new, or improve the structure, for "five years of the date of the demolition or alteration."
What types of alterations require permit approval under the Landmarks Ordinance?
There are many, but they include changes to "materials of roofs, and windows and exterior walls visible from a public street."
So, you change your roof or windows without the proper permit, and that change is visible from the street, you can't get a permit to improve your home for 5 years, and can get penalized $500 a day to boot. The City can also sue you to demand that you alter what you did or change it back to how it was.
The full text of the ordinance and what it says about what type of work requires permits is below:
A permit shall not be required for any minor repairs, as may be necessary to maintain existing parts of buildings, but such work or operations shall not involve [i.e., you need a permit to do all of the following] sandblasting, the replacement or repair of any structural load-bearing members, nor reduce the means of exit, affect the light or ventilation, room size requirements, sanitary or fire-resistive requirements, use of materials not permitted by the
building and environmental controls of this code, changes in the
materials of roofs, and windows and exterior walls visible from a public
street of properties designated as Chicago Landmarks in accordance
with applicable provisions of Chapter 2-120, nor increase the height,
area, or capacity of the building.
13-32-120 Construction Contrary to Permit -- Stop Work Order.
Where any work done under a permit authorizing erection, alteration,
or repair of a building, structure or portion thereof, is being done
contrary to the approved drawings and plans, the building commissioner
or the president of the board of health shall have the power to stop such
work at once [....] Nothing in this paragraph shall be construed to
prevent minor changes in arrangement or decoration which do not
affect the requirements of any provisions of this code, except where they
affect significant features, as communicated in the report of the
Commission of Chicago Landmarks, of a Chicago Landmark designated
in accordance with applicable provisions of Chapter 2-120 of this code.
13-32-200 Fences – Permit Required. It shall be unlawful for any
person to erect or construct any fence more than five feet in height, or a
solid fence of any height visible from a public street on property
containing a Chicago landmark designated in accordance with
applicable provisions of Chapter 1(2-120) of this code, without first
obtaining a permit from the building commissioner.