Two Tenant Unions, One Rent Strike

Like much of the city’s most affordable housing, Herrera’s aging building is in genuine need of repairs. And she and her neighbors would welcome them, she says, after years of paying rent while complaints went unaddressed by their previous landlord. But like many renters in low-cost apartments, Herrera suspects that the intended upgrades will lead directly to her displacement — not just from her apartment, but from her larger community. She lives less than a mile from Wrigley Field, and nearby apartments often go for at least three times her monthly rent of $940 — already a stretch on the $1,400 she earns each month.

Moving out would probably mean leaving the area, putting her twins in a new school and finding a new job, since she doesn’t have a car.

Above all, Herrera was shocked by the prospect of losing her longtime home without so much as a conversation with the new owner. But landlords in Chicago, and most other locales, can refuse to renew leases for any reason, or no reason at all. There are presently few legal means to curb or even count the so-called ​“invisible evictions” that happen when tenants like Herrera quietly lose their homes without ever going to court. This spring, Chicago housing advocates are preparing a renewed push for an ordinance prohibiting landlords from pushing tenants out without ​“just cause,” which could provide one avenue for protecting tenants like Herrera from displacement — or, at the very least, cushioning its impact.

Without any such protection, Herrera and her neighbors are pursuing another avenue. In March, a majority of them, including Herrera, banded together to form a tenants union, inspired by residents of a building on the city’s Northwest Side, purchased by the same investor, who had done the same. 

Herrera hopes to give her kids an example to follow: ​“You see your mother always fight,” she says. ​“You need to be the same way.” 

The sister tenant unions are now in their second month of a joint rent strike against Concord Capital, a new real estate investment firm with plans to acquire hundreds of apartments in Chicago. While tenants skipping rent payments (often out of necessity) made headlines during the first years of the Covid-19 pandemic, rent strikes coordinated among a majority of a building’s tenants are still rare — especially outside of cities like New York, Washington, D.C., Los Angeles and San Francisco, where robust tenant protections help embolden organizing.

Tenants in Chicago can and do legally withhold rent when landlords fail to make critical repairs — although landlords often retaliate regardless, according to an investigation by Injustice Watch. But by launching a rent strike without any such legal basis, Herrera and her neighbors are taking a different gamble: that they can impose a cost on their new landlord high enough to make him reconsider pricing them out.

In doing so, they’re part of a resurgent tenants movement testing tactics to give renters more power in a housing market where their lives can be upended overnight.

So last year, when the tenants saw a notice posted in the lobby that a company called 33 Realty was taking over property management, they suspected the building had been sold.

In mid-December, deMartelly and other tenants convened an urgent meeting. The consensus in the room, she says, was, ​“If it were up to us, we would want to stay here — so are there ways to make it possible to stay?”

It’s common for tenants to find themselves asking that question, but there’s rarely a surefire answer.

As of this spring, some Chicago tenants in gentrifying areas have one new tool to stay in their homes: a shot at buying their buildings themselves. A recently expanded ordinance covering some neighborhoods on the Northwest Side, including deMartelly’s, gives tenants the right of first refusal when their landlords plan to sell. (Some tenants whose homes border the new Obama Presidential Center also won aright of first refusal pilot in 2020, and organizers in the South Shore neighborhood are pushing for it alongside other protections.)

The first step is to form an association that can exercise the right of first refusal or assign it to another buyer, like a community land trust. 

Soon after the December meeting, 13 of the 16 units in deMartelly’s building signed their names on a form submitted to the city, hoping to explore the right of first refusal. But it was too late: The ordinance wasn’t yet in full effect, and the sale of their building had already gone through. 

A few days later, on Christmas Eve, residents began receiving emails and text messages saying their leases weren’t being renewed, so everyone would have to move out at the end of their terms. For the bulk of the tenants, that date was just a few months away.

Two days later, a message from 33 Realty, the new property manager, announced plans to renovate, but emphasized that the company was not the building’s new owner, just a messenger. The name of that owner was ​“2257 N Sawyer LLC” — which told the tenants little, since that was their own address.

No other information was provided in the message, leading deMartelly to suspect that the new owner hoped to remain ​“completely anonymous.” The rise of property ownership by limited liability corporations, or LLCs, often makes it more difficult for tenants to discover the identities of their landlords — and by extension, to hold them accountable.

But some digging in Illinois records turned up a name attached to the company — a real estate investor named Andrew Millard. There was another curious piece of information: a business address that matched the address of 33 Realty.

Millard, it turned out, was also the founder of 33 Realty, which he sold to new venture capital ownership in 2022 but continues to hire to manage his acquisitions. Last year, Millard launched Concord Capital, a real estate investment firm that currently owns more than 550 multi-family housing units and aims to acquire 650 more in Chicago over the next 18 months, according to its website. The firm is seeking to raise more than $40 million for those acquisitions, with projected returns to investors above 18%.

With Millard’s name and address now in hand, the Belden Sawyer Tenant Association began looking up other properties he had purchased through LLCs, which would eventually lead them to Herrera’s door. The tenants union also visited their new landlord’s office to deliver their demands, including lease renewals at fair rents.

Unlike Herrera’s tenant union, the Belden Sawyer Tenant Association contends that its building doesn’t need renovation. ​“These are vintage units that have been maintained for over 100 years,” says de Martelly. ​“We don’t need him destroying a thing with character … to be called a ​‘luxury unit.’”

“Concord Capital is committed to increasing Chicago’s housing supply,” Millard wrote. Chicago is lagging in new apartment construction, he added, citing a report from the rental website Apartment List that puts Chicago near the bottom among large cities in terms of new housing permits issued in 2023, with Austin topping the list. That means fewer new apartments hitting the market in Chicago.

Viewed from a less altruistic vantage point, that makes Chicago a more attractive investment target for high-end real estate today than Austin, where rents are now falling again after investors rushed in during a red-hot pandemic real estate market, leading to a surfeit of luxury apartments.

In the past year, Millard has purchased at least four large multifamily buildings in Chicago using construction mortgages, according to public records. The loans on Herrera and deMartelly’s buildings must be repaid within two years.

Tenant union organizers assume that these buildings were attractive specifically because they provided opportunities to quickly hike rents to match surrounding areas. While Herrera and deMartelly’s buildings are in different physical conditions, both are ​“enclaves in gentrifying areas,” says Danny Rosa, an organizer with the All-Chicago Tenant Alliance, the group that connected the two buildings and is supporting their campaigns.

When investors acquire buildings in gentrifying neighborhoods in order to speculate on rising asset values, there’s a cost to tenants, according to Jacob Udell, who researches the multifamily market as a consultant for the Climate and Community Institute. A study co-authored by Udell found that in New York City, evictions were twice as high in buildings where sale prices or mortgage debt rose the fastest in preceding years, compared to buildings without such signs of speculation.

A common strategy employed by housing investors, aided by eager lenders, helps explain this link. First, the investor borrows money to acquire a property, assuming its value will increase before the loans come due. Next, the investor must ​“quickly turn over the tenant base, renovate and rent to higher-income tenants,” explains Udell. After that, the investor can turn a profit in one of two ways: selling the building at a higher price, or refinancing the loans based on the property’s increased appraisal value. Refinancing for a larger amount allows the investor to pull out their equity as cash.

While the strategy may make sense from a business perspective, executing it successfully can hinge on the rapid removal of existing tenants.

But loading up on mortgage debt can also make landlords financially vulnerable. And that can give tenant unions power, notes Greg Baltz, an assistant professor at Rutgers Law School, where he co-directs the Housing Justice and Tenant Solidarity Clinic. 

“When the landlord’s business plan is to remove people and put in higher paying tenants, just tenants’ willingness to stay after the landlord asks them to leave is a source of leverage,” explains Baltz. ​“Rent striking is a much more acute version of that, because instead of denying the landlord the rent increases that they would get from the next tenant, you’re denying them all of the rent. You can think of a rent strike as a sit down strike in slow motion. While workers walk out, tenants won’t leave.” 

In the same way a labor union would bargain a contract, the Belden Sawyer Tenant Association is seeking to negotiate a lease renewal at reasonable rents. Tenant unions are increasingly demanding—and sometimes winning—collectively bargained leases, even where landlords have no legal obligation to negotiate. 

So far, no negotiations have happened. According to Millard. he offered to meet with the tenant union, provided that its members sign a non-disclosure agreement, but the group had rejected the offer. 

According to DeMartelly, tenants did so because Millard made clear that there would be no discussion of their demands. When tenants’ then-alderperson, Carlos Ramirez-Rosa, tried to broker a meeting with Millard in February, Millard wrote in an email response (shared with In These Times) that he would meet with the tenants only under certain conditions, including a ​“non-negotiation framework.” 

​“We are not expecting this to be a negotiation, as our offer is final,” Millard wrote. 

In March, the Belden Sawyer Tenant Association voted to launch a rent strike.

DeMartelly’s lease isn’t up until the fall, but several of her neighbors have now remained in the building past their April 30 lease expirations. 

In April, Herrera and her neighbors launched their own strike. To date, no eviction lawsuits have been filed against any of the tenants.

Herrera stresses that fighting to stay in her building is about more than her own fate – it’s about preserving a longstanding community and demanding respect for tenants too often treated as disposable.

For years, she and her neighbors tolerated poor conditions in exchange for stability, often spending their own money to fix problems, she says. Herrera installed a new sink and paid to have her floor repaired; other tenants have brought in exterminators and bought new appliances, she says. Now, as the building is improved, they want a chance to reap the benefits.

Asked about Herrera’s apartment complex, Millard wrote that he planned to create 12 new units to help with the neighborhood’s housing shortage. The city will require at least half of those additional units to be ​“affordable” to neighborhood residents, costing no more than $1,116 a month under its affordability formula. Eight of the new units will rent at that price, according to Millard. He did not answer what he planned to charge for the other 40 units post-renovation. Millard also wrote that he is working with local agencies and service providers ​“to help residents find safe, clean, and affordable housing nearby,” and says that some have found better housing already.

But a gut rehab of Herrera’s apartment complex is needed, he wrote, in order to create safe living conditions. The improvements needed, according to Millard, include an upgrade of the electric and plumbing systems to replace lead pipes, as well as reconstruction to address structural issues.

In These Times reviewed code violations and building court records associated with Herrera’s apartment complex, which suggest a long history of neglect. For years, the previous landlord appeared periodically before the Cook County Circuit Court, where the city sued him over unaddressed building code violations. A judge repeatedly ordered the landlord to install smoke detectors, exterminate pests and correct other code violations, but compliance appears to have moved at a glacial pace. The case involving one of the complex’s two buildings was dismissed in 2022 with a finding the landlord had substantially complied; the case involving the other building was closed with $7,000 in fines to the landlord in 2024, eight years after the city first brought suit. 

That doesn’t mean the building is now safe. The city and courts frequently fail to hold landlords accountable, sometimes with dire consequences. And Herrera doesn’t contest that her building needs repairs. But it’s not lost on her that whether landlords neglect a building or plan to profit through its rehabilitation, it comes at the expense of tenants. 

As the joint rent strike entered its second month in May, a group of about 20 tenants, including Herrera and deMartelly, staged a protest outside of Millard’s suburban home. 

DeMartelly says that, whatever happens, she hopes more tenants will take the lesson that they shouldn’t settle for the best of the bad options handed to them. ​“We need to be talking to each other,” she says. ​“We can’t keep paying the mortgages for these people while they plan to displace us.”