Tax incentives strengthen Pilsen’s Historic District
September 4, 2009

The 1500 block of west 18th Place in Pilsen's Historic District features architecturally significant cornices on residential housing.(Photos by Charlie Taylor)

By Miriam Y. Cintron | September 2009

With thousands of historic buildings, some dating back to the late 1880s, it is no wonder Pilsen was added to the National Register of Historic Places in 2006. That move created the Pilsen Historic District, the largest such district in the state, stretching from Halsted Street to Western Avenue and from 16th Street to Cermak Road. The designation allows area residents who qualify to receive tax incentives for renovations that preserve their houses’ historic integrity.

Under the program, residents of owner-occupied properties must make renovations worth 25% of the assessed value of their dwellings as determined by the Cook County assessor, which is often a fraction of actual market value. Residents then have up to two years to finish their renovations, after which their property taxes are frozen for eight years, followed by a four-year transition period during which taxes increase incrementally to the prevailing rate. Once a year, owners need to provide the county assessor proof they still live in the building to continue getting the tax freeze.

Owners of large buildings also can apply for a federal income tax benefit. The benefits, however, come only after a lengthy process that involves much paperwork and site visits by the Illinois Historic Preservation Agency (IHPA) to secure the necessary financing and plan approvals. In response, the 18th Street Development Corp. (ESDC) created the Historic Preservation Initiative, which guides homeowners through the application process and serves as the go-between for residents and the IHPA, which administers the program, said Kristy Menas, ESDC’s director of historic preservation.

ESDC verifies that buildings contribute to the neighborhood’s historic character by first ensuring they are 50 or more years old. Then the group reviews program guidelines with owners and helps them complete paperwork—no small task. The ESDC also helps homeowners prepare financial statements, works with local lenders, and helps obtain building permits and select contractors.

When Pilsen resident Omar Vega bought a historic house more than a year ago, he knew he would have to put substantial work into it and was glad to learn about the tax incentives that came along with the neighborhood’s historic district designation. Though no stranger to the application process for Chicago building permits, Vega initially found the amount of paperwork involved in the IHPA application process daunting.

Working with Menas made it incredibly easy, according to Vega, who supplied her with required documents and photos of the building. After a months-long application process, Vega worked on his house’s electrical system and plumbing; he now plans to replace the windows and front door with input from IHPA as to the best style based on the building’s age. He estimates he will save about $16,000 from the tax freeze, money he plans to invest in the house to make more improvements.

Buildings in the 1900 block of south Throop Street qualify for tax breaks within the Pilsen Historic District.
Vega is one of four residents who have finished their initial renovation projects and now are receiving the tax breaks. About 40 other owners are in various stages of the process, and Menas admits some are having difficulty completing renovation projects due to the economic downturn.

Menas finds the program offers myriad benefits, from saving old buildings from demolition to preserving the historic feel of the neighborhood to making buildings aesthetically better. Yet the program aims to make more than cosmetic changes, according to Menas, who noted that owners also can fix their building’s basics such as water heaters, plumbing, and electrical wiring.

More important, the program’s tax freeze allows Pilsen residents to improve their dwellings without being priced out when property values increase. It also creates jobs, as local contractors, plumbers, and electricians often get work from the renovation projects.

The program does not place undue restrictions on renovations homeowners can make as long as changes generally fit in with the building’s historic character. This approach strikes a balance between preserving historic buildings and allowing residents to make choices, said Stephen Stults, legislative assistant to Ald. Danny Solis (25th).

“There really is no other community organization doing this in the state,” Menas said. With 4,406 buildings in the area that qualify for the tax incentives, ESDC is working to help more residents take advantage of the program, reaching out through direct mail as well as through schools and churches. In the past, ESDC has partnered with Solis’s office to host housing fairs.

For Vega, ESDC’s could have a big impact on the community’s future.

“Pilsen is such a great area,” he said, adding that though the neighborhood traditionally has been a point of entry for immigrants, the historical district program’s financial benefits can help it continue to be a strong, vibrant Latino neighborhood for generations to come.

To contact the ESDC, call (312) 733-2287, e-mail, or log on to

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