The Other Side of Development: How Public Dollars Empower Private Wealth While Small Businesses Starve

In cities like Chicago, particularly on the South and West Sides, community development is being hijacked. Under the guise of revitalization and affordable housing, an inequitable and deeply extractive system has taken root—one that rewards majority white-owned developers and their networks while marginalizing the small businesses that form the true backbone of our neighborhoods.

This is not development—it’s exploitation.

For decades now, these developers have mastered the art of profiting from poverty. Through mechanisms like the Community Reinvestment Act (CRA), Tax Increment Financing (TIF), Low-Income Housing Tax Credits (LIHTC), and federal grants like CDBG and NOF, they’ve institutionalized a model where corporate entities use public dollars to build private wealth. The result? Abandoned lots and distressed properties are transformed into “affordable housing” units—but at costs that defy logic and deflect scrutiny.

Nationwide, the cost to build a single affordable housing unit often exceeds $400,000, with Chicago’s numbers sometimes even much higher. A large portion of this is not construction—it’s soft costs: legal fees, architectural designs, developer fees, consultant charges, syndication costs. In some deals, these soft costs eclipse the actual building materials and labor. That means more taxpayer money flows to those who structure the deal than to the people who need the housing.

This public-private partnership model is wildly imbalanced. Developers enjoy debt service reserves, lease-up reserves, and guarantees. Meanwhile, a small business—especially one opening in an underserved area—gets nothing. No cushion. No safety net. Just rent, utilities, payroll, inventory, and a prayer.

Let’s be clear: housing alone does not make a community. It is small businesses that generate employment, circulate local dollars, provide essential goods and services, and create the vibrancy that makes neighborhoods livable. Every coffee shop, bookstore, restaurant, and daycare center contributes more to the tax base, public life, and community cohesion than a single apartment tower ever could.

Yet in Chicago, these businesses are rarely given a seat at the table. Subsidies flow one way—toward real estate. The same architects, developers, and law firms continue to feed off public subsidies that are supposed to serve the people. This isn’t innovation—it’s a decades-long hustle dressed up as urban renewal.

And what happens when those affordability covenants expire after 15 or 30 years? Many of these “affordable” units quietly convert into market-rate condos, further accelerating gentrification. This is not a post-gentrification problem—it’s a pre-gentrification strategy disguised as equity.

It’s time to rebalance the equation.

We must demand that small businesses receive the same financial tools afforded to developers. That means:

• Access to NOFs, TIF support, and CDBG funds
• Eligibility for startup reserves or early-stage operating grants
• Long-term lease stabilization incentives
• Inclusion in citywide development planning, with real stakes—not tokenism

Small businesses are not charity cases. They are job creators, culture builders, and taxpayers. If our tax dollars can subsidize luxury developers under the name of "affordable housing," then they can absolutely support the entrepreneurs risking everything to bring life back to our blocks.

If we want equitable development, then we need equitable investment. Anything less is theft, hidden in the fine print of a development agreement.