Chinatown's Staying Power

First Published: Chicago Journal, March 16, 2006

Tourists flock to Chinatown in the thousands each year, but on any given afternoon on South Wentworth Avenue, they are visibly outnumbered by ethnic Chinese. In fact, Chinatown is one of the densest ethnic enclaves in Chicago, and also one of the most persistent. And Chinatown’s stability is attracting attention.

A recent Loyola University study of gentrification in Chicago neighborhoods suggests that Chinatown’s vibrant retail district, and especially its success at drawing tourists and destination dollars, many have helped fortify the community against ethnic displacement.

Yet restaurants and tourists alone do not stabilize neighborhoods. The Greek community left Greektown decades ago. Koreans whose businesses line West Lawrence Avenue, like many of the Indian Business owners on Devon Avenue, tend to live in the suburbs, while the Vietnamese struggle to keep a toehold on Argyle Street.

By contrast, Chinatown remains almost 80 percent Chinese. Observers cite a variety
of reasons, including the continuous arrival of new immigrants, and cultural factors that cause them to keep strong ties to the Chinese community for generations after they’ve arrived.

They point out that the community is hemmed in by expressways and rail lines, and until recently hasn’t been attractive to outside investors. But they also point to the network of civic institutions, which have built a circuit of reinvestment that has maintained Chinatown’s vitality through decades when neighboring communities declined.

“There’s the geographic isolation of the community,” observes Payton Chung, a researcher for the Congress of New Urbanism. “But also the peculiar social ties that bind it.”

Those ties have helped to keep generations of Chinese close. They have also, in effect, worked to keep non-Chinese out – though that may be starting to change.

“People are realizing ‘I can move to Chinatown for $100,000 less than it would cost in the South Loop,” says Kensen Lam of the Chinatown Chamber of Commerce. “We love it.”

Chinatown’s civic network grew partly as a necessary adaptation in an unfriendly society. Chinese moving to Chicago in the 1870s sought to leave behind the prejudice and violence that hounded them on the Pacific Coast. They settled on Van Buren and Wells Street. A 1905 boycott of American trade in China – a protest against abuse of Chinese in California – inspires Chicago landlords to retaliate with dramatic rent increases against their Chinese tenants, pricing much of the community out of the South Loop. In response, one of Chinatown’s two dominant tongs, or benevolent associations, the On Leong Ton, orchestrated a mass relocation. They negotiated fifty 10-year leases on buildings around Cermak and Wentworth Avenues – a transaction they had to make through a non-Asian intermediary, the H. O. Stone Company.

In the 20 years after China’s community revolution in 1949, Chicago’s Chinese population doubled, even as the construction of the Dan Ryan and Stevenson expressways cut Chinatown's housing stock in half. Throughout the 1980s and 90s, the housing pressure has been kept up by a steady influx of new arrivals. Today, immigrants comprise as much as 70 percent of Chinatown’s population, according to the Chinese American Service League.

Over the decades, Chinese Chicagoans have begun to spill over into neighboring Bridgeport and McKinley Park. But Lam says even when Chinese families move, they maintain close ties to Chinatown.

“My parents always made a special effort to bring me to Chinatown,” he recalls, “and we continue to meet there” now that he lives a mile and half away in Brighton Park. Even Chinses who move out to the suburbs come back to Chinatown to shop, to eat at restaurants, and to socialize. And, as the Loyola displacement study observes, a growing number of their children move back to Chinatown to buy homes.

One result of this cohesion was that Chinatown remained a vibrant commercial district. Today, Wentworth Avenue and the Chinatown Extension north of Cermak are both crammed with groceries and food importers, herbalists and gift stores – and especially with restaurants. There are about 40 restaurants in an 11-block area, including some serving Thai, Vietnamese and Malaysian cuisine. The Chinatown Chamber of Commerce boasts that collectively they draw tens of thousands of diners each year.
Lam says Chinatown’s restaurants and groceries are split between those tha tare more likely to appeal to tourists, and those that cater to the Chinese – “the places where my grandmother would go.”

He says the businesses that are “for the community” predominate, and while some visitors are intimidated, Lam says visitors are always asking him for an authentic restaurant experience.

Their interest marks a telling contrast between south Chinatown and the row of Asian restaurants on Argyle Street. In the 1970sth surviving remnant of the old Chinatown on Van Buren Street was uprooted for construction of the Metropolitan Correction Center. According to the Chinese American Service League, a group of Chinese businessmen, led by entrepreneur Jimmy Wong, bought property on both sides of Argyle Street in Uptown, and offered financing for entrepreneurs willing to locate there. Today, Chinatown is still a hub for mainland Chinese, while Argyle Street has been settled by Southeast Asians.

Freedom Nguyen of the Asian Health Coalition in Uptown says that while Southeast Asians come from all over the Midwest to shop on Argyle Street, longtime residents are struggling to stay there, as more rental housing is converted to condominiums. He says the prices for the new condominiums are not necessarily high by city standards, but they are too high for many for the Southeast Asian renters, some of whom are being forced to leave Uptown after living there for 15 to 20 years. “A lot of the new buyers don’t even plan to stay,” he says. “They buy at pre-construction prices, and plan to resell in the next five to 10 years.”

Even the restaurants are a source of contention on Argyle Street. Kensen Lam says visitors to the original Chinatown ask for directions to the authentic restaurants they might hesitate to enter on their own. Meanwhile, Nguyen says he sits in community meetings and listens to new homeowners complain about the Vietnamese restaurants on Argyle Street because “they all serve the same food.”

So why does the original Chinatown continue to flourish as both a restaurant mecca and home for new immigrants? Payton Chung agrees that tourist revenues play a role in building the community’s economic muscle. But he also suggests Chinatown’s civic networks create unique channels for raising capital, and reinvesting it, channels that can be “completely opaque” to outsiders.

He points to a handful of Chinatown-based banks, the associations of businessmen who have orchestrated Chinatown’s major redevelopment projects, and the handful of Chinese language real estate agents who handle the community’s property sales, usually without advertising in mainstream channels. “Anyone can go to MLS to look for a property,” Chung says, adding “calling up a Chinese language realtor is something else.”

In neighborhoods like Humboldt Park or Uptown, outside speculators can drive prices up. In Chinatown, Chung observes, “outsiders provide commercial revenue, but they’re locked out of the residential market.”

Often, cultural barriers are enough to make it difficult for outside residents to buy property in Chinatown. Erica Chianelli, a former executive director of the Chinatown Chamber of Commerce, recalls getting calls from non-Asians who wanted to live in Chinatown because of its proximity to the Loop, and because it was relatively inexpensive. “But they couldn’t read the listings in the Chinese papers,” she says. “They would come into the office, we had the Chinese papers there, and we would read the listings for them.”

See Wong, president and owner of Richland Realty, says 90 percent of his customers are Chinese immigrants – many of whom are ready to buy property within two or three kind of arriving in Chicago.

“They work 280 hours a month, they have no time to spend money,” Wong says. Wong adds that when they’re rady to buy, they come in with down payments of 30 to 50 percent of the purchase price. “You never have to worry that at the last minute the buyer won’t qualify.”

Wong himself virtually personifies Chinatown’s full investment circuit. Wong emigrated from Hong Kong in 1975, opened his real estate brokerage firm in 1988, and began dabbling in development about 15 years ago.

“The real estate need was so great in Chinatown, and there were only two or three real estate brokers in the community,” he says. “I saw an opportunity.” He began buying up vacant lots as they became available and building bungalows, and eventually even started up a bank – American Metro Bank – in 1995.

As it turns out, Chinatown is one of the most competitive banking markets in the city, with at least 10 banks in Chinatown proper. But it hasn’t always been that way.

Stan Bochnowski, executive vice president at Lakeside Bank, says when Lakeside opened its first branch in Chinatown in 1982, other bankers were hesitant to do business there. “A lot of them didn’t understand the dynamics of the Asian market. You have people with a very strong work ethic, but they’re extremely debt averse. They have no borrowing history, no credit score,” and in the case of new immigrants, no employment history. “If you were trying to underwrite a loan there by traditional measures, you wouldn’t make the loan.”

By the late 1980s, Chinatown investors began forming their own institutions to meet their community’s banking needs. New Asia Bank opened in 1987; International Bank opened in 1992; Pacific Global opened in 1995. Betty Chow, Pacific Global’s president and CEO, says new immigrants in particular feel most comfortable with Chinese language banks, and that locally owned banks are particularly attentive to the community’s needs. Customers can go to Pacific Global to pay their utility bills, for instance. “American banks have lots of checking,” Chow explains. “In Chinatown, many people are not comfortable with writing checks.”

Locally owned banks have created a short chain between customer deposits and local reinvestment. “Money comes in from the community and we lend it back into the community,” Chow says. “We lend it out to other parties who want to start businesses, purchase a home, buy an automobile.”

She says the results have been visible. “Ten years ago, most of the buildings in Chinatown were all pretty old.” Access to capital has helped refurbish storefronts and build new housing, making the community more attractive to visitors as well as a new generation of young families.

In fact, it was concern that the age and limitations of the local buildings would force Chinatown into decline that spurred Chinatown’s business community to form the Chinese American Development Corporation in 1984. It purchased 32 acres of former railway land for a new residential and commercial expansion of Chinatown. The corporation’s first bond issue raised $1.3 million in $1 shares, according to Raymond Lee, onetime chairman and CEO of the Chinese American Development Corporaiton. He adds that unforeseen problems, including an expensive environmental clean-up of the old rail site, caused the project to drag on into a second bond issue, and a third.

“We had a lot of problems, believe me,” Lee chuckles now. Total projects would exceed $100 million, with Lakeside Bank taking the lead on the end mortgages and a significant part of the construction financing.

Ultimately though, the project has effectively doubled Chinatown’s geographic area, adding 110 new storefronts, and, when complete, about 500 new homes. Richland Realty is currently completing the final phase of the Santa Fe Garden project on land purchased from the Chinese American Development Corporation.

And the explosion of new housing options have simultaneously exposed the neighborhood to interest from outside while offering longtime residents a chance to stay.
Michael Chin, vice president of Commercial Real Estate at Harris Bank, which is financing the final phase of the Santa Fe Garden project, says that at $250 to $275 per square foot, the new units are just a bit cheaper than homes in the South Loop. Still, buyers are snatching them up.

“They’re sold on spec,” he says. “You don’t even have to build a model.”
And the buyers are not only Asians, according to Chin.

“The project is on the outskirts [of Chinatown], close to Dearborn Park. So we do have some mix of neighbors,” Chin says. “You like to see neighborhoods diversify.”
But for Kensen Lam and his wife, the new housing development, with its strong connections to the neighborhoods business community, offered a chance to stay in the neighborhood.

The Lams recently bought a new house in Chinatown – purchasing it two years before the builder even broke ground. “We put 10 grand down right away,” Lam recalls. “That’s where your network comes in – you hear about it through friends of friends, your relationships with the realtor.”

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