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Urban Homesteading

empty dirt lot next to a building in Englewood, Chicago
The Englewood neighborhood of Chicago, Ill. Photo by Daniel X. O'Neil.

I have always thought the Homestead Act of 1862 provided a model for the revitalization of small towns and decayed cities.

Before 1862, acquiring government-owned land was expensive, often prohibitively so. But the new law established a three-part process for securing surveyed government land, mostly out West. Would-be homesteaders filed an application, committed to five years living on and improving the parcel, and then filed for a deed of title. Over the next 123 years, approximately 4 million Americans made claims, leading the government to distribute 270 million acres, according to the National Park Service.

While some developers abused the system or exploited loopholes, the Homestead Acts offered opportunity to many who could never have afforded to own land if they had to wait to buy it outright. Former sharecroppers could farm their own land instead of someone else’s. Immigrants, single women and former slaves could all qualify for homestead claims as long as they were citizens or filed declarations of intent to become citizens at the time of their applications. The 1862 law, and those that followed, transformed what it meant to be a potential American landowner.

Homesteading was how we settled the American West. You might arrive penniless, but if you lived on the land and made productive use of it, you earned clear title from Uncle Sam. They didn’t have the term “sweat equity” in those days, but that is effectively what homesteading was.

Homesteading ended in the contiguous United States in 1976. But the principle of extending ownership to those willing to work unused land is not gone.

One example, recently expanded, is Chicago’s “Large Lots Program.” The program began in 2014 in two struggling Chicago neighborhoods, and offered empty lots for $1 each to eligible buyers. Buyers who qualified needed to own property on the same block as the vacant lots they wished to purchase, and could not owe the city any outstanding debts or unpaid taxes on their current property.

There are more than 20,000 vacant lots in Chicago, and the city owns more than half of them. City policy involves aggressively tearing down abandoned homes and shops in order to prevent them from becoming headquarters for criminal activity or drug use. The result is that some of the poorest Chicago neighborhoods have ended up with as many empty lots as occupied ones, or sometimes more; a resident of the South Side neighborhood of Englewood told NPR that she felt as if she lived in a rural area, given how many vacant lots surrounded her home.

Since the Large Lots Program started, the city has sold more than 550 lots in Englewood and East Garfield Park. Four thousand new lots, in 33 communities, became eligible for sale this week. In a news release, Mayor Rahm Emanuel said, “This program’s success is driven by people who are committed to strengthening their communities block by block, and this expansion will create opportunities to strengthen neighborhoods throughout the entire city of Chicago.” The program is accepting applications through the end of January.

The new owners are expected to pay property taxes and comply with ordinances about weeding, fences and other applicable portions of the municipal code. The lots are zoned for residential use, meaning owners could build houses or apartment buildings on the land; however, most of those lots sold so far have been turned into side yards, gardens or landscaped community space, according to The Chicago Tribune. The Wall Street Journal reported that more than half of sales to date are lots adjacent to the buyers’ existing homes.

Chicago’s experiment in urban homesteading can claim inspiration from our frontier forebears, but I’m sure the pioneers would scratch their heads in wonder at the city’s self-imposed restrictions. Why limit the program only to people who own property on a certain block – or to those who own property at all?

The geographic limitation seems designed to avoid encouraging gentrification, which matches today’s politics but not the needs of Chicago’s most blighted neighborhoods. And the restriction that the properties only go to people who already own property, incongruously, favors relatively better-off residents at the expense those who have only their sweat to contribute. It may even favor people who don’t live on the block, but who happen to own a parcel there – not outlandish in neighborhoods like Englewood, where only 30 percent of homes are currently owner-occupied.

The Homestead Acts worked because they brought hardworking, entrepreneurial people from all over the world to America to help build the country. Given a chance, those same forces would rebuild the towns and parts of our cities that need rebuilding the most. Chicago is on the right path, but it hasn’t yet traveled far enough.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s most recent book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book, Looking Ahead: Life, Family, Wealth and Business After 55.

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