"Lakeside CDC examined the impact of conversions on rental housing in Rogers Park and released a comprehensive study in October 2006. By looking at Cook County Assessor data, we identified 2,709 new condos added to RP between 2003 and 2006 in 148 properties. This is an average of 18.3 units per development, which included new construction and conversions.
We visited each of the 479 rental buildings listed by the Assessor as rentals as of Jan. 1, 2006 and found that by October 2006, 42 buildings representing 918 rental units were under conversion.
This was 8.8% of all of the rental buildings in Rogers Park.
At that rate, in the last 2 months of 2006, we likely lost another 8 buildings and 175 rental units. The pace of conversions has slowed, but by no means have we seen the last of it.
Brian White
Lakeside CDC
35 comments:
Good...
The way I see it, more people owning their home = more people caring about the neighborhood = better quality of life for everyone.
Don't get me wrong. I'm not someone who hates renters, or thinks they all cause trouble. I was a renter for many years until recently when I bought a unit in one of the recent condo conversions that are routinely villified around here.
On the other hand, I don't understand the implication of some kind of entitlement for "affordable" rentals.
This report sounds like progress to me...
This is a good thing. My new condo neighbors attend CAPS meeting, pick up trash on the block and never vandalize my home. I wish I could say the same for the people who moved out of these buildings.
I agree with these two posters. This issue should not be politicized, and the decision to convert is and should be a business decision regarding private property on the part of the ownership.
Landlords have a right to convert their buildings.
Also, many of the buildings that were converted were the buildings with the worst maintenance and biggest problems with crime. Anyone remember how the 1622-1630 W Farwell Bldg and others on that block used to be before they were gutted and rehabbed for sale as condos? They are lovely buildings now but they were horrors before.
We still have a superfluity of really lovely rentals in beautiful old buildings.
However, if we want to see more affordable rentals, and if we want to wonder why housing of any sort is almost totally priced out of reach for anyone making under $9 an hour, then why don't we insist upon a rollback in property tax?
I'm a renter in a lovely rental, and my landlord tells me that every rent increase over the past 7 years has been driven by tax increases.
The property tax is one of the most visciously regressive taxes there is. It is blowing home owners out of their homes, especially the elderly, and people who bought recently and overpaid for their homes and are looking at larger payments because their "creative" mortgages are being adjusted.
What the constant tax increases mean is that you never really own your own property and that home ownership is not a sufficient hedge against inflation. It also means that when you arrive at the age where you at last have your home paid for and need to reduce your expense load, you are looking at being blasted out of the house that you EARNED by property taxes.
It is especially galling to confront brutal tax hikes in a period of stagflation such as we are now entering, while our taxes are diverted to private development projects and to entities that not only do not serve the larger population, but pay no taxes at all.
Think about it when you roll past Loyola's building on Sheridan Road, that is being renovated at our expense.
I agree with the first three posters.
As politically incorrect as it is to say, nearly 100% of our neighborhood activists are property owners, and nearly 100% of our problem people (aside from the absentee slumlords, of course) are renters. The middle-class owners tend to advocate for a higher quality of life (no gangs, drugs, litter, noise, violence), and work hard to make it happen.
Obviously, no absolutes (owners= all good, renters = all bad) can be declared. But I do think the folk wisdom is correct, that a higher rate of ownership means an area is more likely to be a stable, safe, and desirable place to live.
Nice Charlie...
Very well thought out argument.
I have one too.
No it's not.
Hey Charlie, Take your comments over to your own community bulletin board.
Charlies arguments are never thought out. That's why I won't allow them here.
north Coast - One of the reasons rents for big buildings went up more than they should have is the 7% cap on increases for single family homes (where the owner lives in the unit), which is set to expire this year.
That in turn puts a larger portion of the tax burden on commercial properties and rentals.
I'm a renter, in a building that no problems, on a street that has no problems with its rentals anymore.
So renters are not categorically problems, just as many homeowners are not an asset to the neighborhood, given the way they don't maintain homes they really can't afford to live in. Check out the dumps belonging to Joe Moore and Kevin O'Neill. I'd rather live up the street at the cheap rental at 1246 W Pratt anytime.
However, I will venture to say something POLITICALLY VERY INCORRECT and state that market rentals are not a problem and usually aren't, but that Section 8 rentals are ALWAYS a problem.
Sorry, but you can't have hordes of welfare mommas and their gangbaner boyfriends and brothers and sons around and have a good nabe.
If my saying this makes some people angry, so be it.
Charlie,
We're not playing your childish "I'm rubber - you're glue' games here. Take that mindless junk over to Joe's office and play with him.
Until you can bring something constructive to the table, stay away.
abe, you make a good point.
Large apt buildings are taxed very unfairly. Add that to the fact that large apt bldgs and condo buildings must contract their own trash hauling and have their water metered, which SF home owners don't have to, means that, in effect, large buildings that are very energy-efficient on a per-household basis are subsidizing SF homes and 2 & 3 flats.
The highest rates were those paid by manufacturers. I use the past tense because our unfair tax structure was very effective in driving small manufacturers out of the city to more friendly environs such as Bedford Park and Elk Grove Village and Harvard, not to mention China and Indonesia.
I've never been a Republican and sure as hell never approved of the Gipper, but he said one true thing:the power to tax is the power to destroy.
As usual, it is our most vulnerable people who pay the price: the nice, respectable low-wage renters, the elderly, and others whose incomes are stagnant ( most of the workforce these days)and not rising in tandem with escalating property taxes and rents.
I, as a renter, am going to make a point here.
Everytime this issue comes up, we talk about the need for affordable housing as it relates to the low income family.
Not that the specific concern about low income housing isn't important. But the conversion boom is having a tremendous impact on the middle class as well.
Ideally, though should only spend 30% of your income on housing to maintain financial stability. Lets take a single middle class worker who makes $35,000 a year. They should not be spending more than 10,500 on housing yearly. This means the most they should pay in rent is $875.
The number of 1 bedroom apartments in well managed properties within or below that price point are rapidly decreasing. The majority I looked at were $950 and in suprisingly bad condition, although the outside of the building was nicely maintained.
The middle incoome worker is facing a tough choice. Pay more than they can afford to live in Chicago, find a roomate or marry to defer some of the costs, live in a substandard dwelling or move.
One other point, there are plenty of renters, who are very active in this community, myself included.
I think the problem is lack of accountability, and society's enablement of people's poor decisions.
If you give people things they couldn't otherwise have, (Section 8 housing, wellfare, an artificially high wage) and you don't put restrictions on it, those people will come to depend on, and expect those things. Then comes the feeling that they're entitled to those things.
Then, instead of doing something about their situation, they start to complain that their lives aren't as good as some of the other people around them. They want MORE... But they expect that someone will give it to them. Even that someone OWES them. After all, you can't make people live in the projects. That's not right...
This feeling that they're owed something and that they're being screwed by someone, leads to disdain for those who are more well off. This leads to a general disregard for people's property/safety.
It's ok to beat up a middle class guy and take his credit card because he owes you something.
This is just a theory of mine. It's not absolute, but it is based on experience, and years of watching family and friends get trapped into the system.
It goes back to the "teach a man to fish" theory... Giving them fish only stunts their ability to provide for themselves.
To Margot: I understand and sympathize, because my income fluctuates between $35K and $45K. I'm lucky enough to have a beautiful large one-bed for under $900 because I have lived there many years.
However, I'll agree the supply of such places is getting tight, owing mainly to the tax increases. Do you wonder why so many buildings are STILL converting in the midst of this slow market? Because they are too behind it on the taxes. Every tax increase triggers a wave of conversions. The owner of a beautiful courtyard in Edgewater told me he has moved to a basement apt, because every time he repairs his place, the city increases his assessment.
We need to work for a "Jarvis Amendment" type of ordinance at the county level, and put our pols and their cronies on a cash diet. A rollback is in order.
To chitownrog: Absolutely agree on the matter of entitlements. But it's not just low-income welfare recipients, it's our entire culture in this country. The notion that as individuals or as a society we are entitled to certain things has, IMO, made our country a society that is on all socio-economic levels a culture of whining crybabies, mooches, scammers, and thieves, from corporations and entire industries that demand to be bailed out of messes they dealt themselves into through greed,dishonesty, and mismanagement (automakers, airlines,banks, mortgage lenders), to middle class folk demanding to be bailed out of scammer mortgages no one made them assume, to welfare mommas wanting us to support their dozens of fatherless kids.
Right now I still feel pretty safe because the condos aren't selling and I figure they will stop the rapid conversions for a while. But I'm damned sure when they do start selling and the conversions take off again renters will be priced out of this neighborhood and the condo prices will make them unattainable for the average people living here. Only the few who managed to buy property before the likely gentrification will get to stay here. Think about it, we have a huge rental stock and some of the least expensive condos in the city now and the apartments are already barely affordable. In neighborhoods that have gentrified a large one bedroom easily goes for over a thousand dollars. Do people think there is anything a community can do to prevent all the displacement that gentrification causes? People say Chicago will continue to Gentrify untill the housing is like New York's. Small and outrageously expensive. I've seen enough. I'm scared.
Anyway, I think as a community we are part of a historical movement, particularly if its true that alot of people from the projects are moving here. I don't want to condemn subsidized housing here because a few people are not adapting and fitting in well. I think we should embrace the challenges and see if we as a community can welcome the people coming here from a living hell and work through all the social problems they inherited growing up in that environment without just throwing up our hands and saying they should leave and the section 8 should go too. We have a steady percentage of people who are unemployed, uneducated and working for a minimum wage that nobody could survive on. As a society we need to fix these problems because it could happen to any one of us. No one is immune, any person could become unemployed, disabled scitzophrenic addicted, whatever. Even educated people find their whole indusrty gone and difficulty finding work. I know a woman who was married to a doctor and holds an advanced degree who lost her fortunes in divorce and looked for years for a job. She's was working at a grocery to survive. We can't dismiss people that fall through the cracks in any circumsatnce. As a community we can embrace the new thought to assimilate people from the projects into our communites and we can protect the affordability and diversity from market forces, but how?
hello ... paradise?
is that REALLY you?
if not... why are you using another's username?
She's not using it anymore.
north coast... i agree with you on your post. a true libertarian you are!
;)
Yes, I am a true libertarian and I also have unlimited sympathy for the low-wage and moderate-income people who are being squeezed between subsidized rentals they are too "rich" to qualify for, and hyper-inflated home prices we cannot afford that driven to these absurd levels by , in large part, direct and indirect subsidies and props to the housing market supplied by federal, state, and local government agencies.
I agree with Paradise that people who have fallen through the cracks because of genuine emergencies we are all vulnerable to, such as unemployment, disability, catostrophic or prolongued illness or serious accident, or business failure, should qualify for assistance, which in the case of the truly disabled or destitute elderly will be permanent.
I have fallen through the cracks myself thanks to failure in business, and I can tell you that I was not helped by any of the programs for our "needy", and neither have any of the numerous homeless of my acquaintance, many of whom are among the severely mentally ill who we put out on the streets to die twenty years ago when we pulled the support from necessary services to redirect it to massive corporate subsidies and incentives (how do you say TIF).
Yet these are the people we abandon and who end up among the homeless. Low-wage workers are too "well off" to qualify for the array of housing benefits available to those receiving ADC, and when these people are injured or become unemployed, they fall through the floor. Any accident devastates people who don't make enough money to survive on to begin with.
Our society has, in the past 80 years, become such a tangled hairball of subsidies of various sorts for every industry and every need, whether real or perceived, that it is impossible to sort out who is getting subsidized by whom, and what would live or die without the government money train. Subsidies to one group injure another, and necessitate a subsidy to remedy the wrong wrought by the first subsidy.
Housing is a case in point. Eliminate or sharply curtail Section 8 subsidies, and rents will drop through the floor, which is created by subsidies that pay market rentals for apartments that wouldn't rent for anywhere near those rentals were they dependent upon the purchasing power of their prospective tenants.
Pull the subsidies and supports away from homebuilders, home buyers, and home lenders, and housing prices will drop like a decabling elevator, to the level affordable by most prospective buyers, for were it not for the various types of support given to developers and lenders, as wells as buyers, in the form of mortgage guarantees, tax subsidies for new development, and tax-funded buyer incentives, housing would be priced at the level most buyers could afford by means of their own incomes and honest financing, not with "liar" loans at 5X or 6X the buyers income thanks to "creative" financing backed by federal mortgage guarantees. If you are a prudent, honest prospective buyer awaiting a chance at a modest condo at a reasonable price, hope like hell that Obama, Clinton, and other Dems don't manage to push through their proposed bail-out for the careless, delusional buyers of overpriced homes, and the greedy mortgage lenders who overwrote them, just to prop up the ludicrously inflated housing market.
If you look around you, you can see that the invisible hand is moving to restrain further asset inflation and keep this neighborhood affordable. A dozen or so unsold condos in the 1415 W Lunt Bldg were auctioned off for minum bid of $50K on April 11, with 6 to be sold no matter how low the price. Some of those units will end up back on the rental market. There will be many more auctions of unsold condos and many more units and bldgs. reverting to rental. Housing prices are falling, and due to fall more as delusional, over-reaching buyers are forced into foreclosure as their "creative" loans blow up in thier faces. Renters will once again be able to find affordable apts and honest, prudent, moderate-income buyers who have sat out the insanity of the past 5 years will once more be able to score a decent condo...... unless our government decides to prop up the housing market by taxing us for a bailout.
I would not have chosen the title for the post that stimulated this discussion, but I appreciate the earnest sentiments expressed on all sides.
Taxes, utilities, and insurance are the 3 factors cited by landlords for why they convert. (The alderman generally does not come up as one of the reasons, for better or worse). Our original study says as much and we do not condemn or seek to restrict landlords who choose that option. We think community development works best when it results in win-win situations, including for the property owner seeking to make a living.
These days, there are many ways to slice the proverbial apple and get an affordable housing unit. Some of the ways have been addressed through tax policy (i.e. Class 9), low-cost mortgage financing, or grants and subsidies. (Section 8 is really a very small and mostly historic piece of the puzzle, comparatively speaking). Other still await a formal policy or market response- i.e. insurance.
As well, many of the newer programs, such as employer assisted housing, CPAN, and the Low Income Housing Trust fund rental voucher, address the problems facing middle class or working poor households. And senior tax exemptions, HECM mortgages, and other programs can help older residents who find the neighborhood has gentrified around them. They may not be as well aware of these options, but that is why we have housing agencies like Lakeside CDC. We can argue about who gets the most bang for the affordable housing buck, but I do not think the data would support a claim that the lowest income folks get the most benefit. In fact, the home mortgage tax deduction continues to provide the largest public housing benefit bar none.
Rogers Park is long overdue for a thoughtful conversation about housing. Lakeside CDC offered its study to support community conversations. If readers are still interested, it is available online. We hope we can continue to contribute to the discussion going forward.
Brian White
Vanessa is Paradise. I have to say that the most recent post is by far her best ever, honestly. I completely understood what she was talking about and I agree with her on the people falling through the cracks.
Thank you, with all due respect I am not trying to outdo or show up The North Coast. I've recently discovered that she and I have quite a bit in common. She's made it very clear that she's been hurt and has exprienced anger and bitterness, and is more than willing to express those sentiments, however her knowledge is impressive as well as her insights, I see.
There is another bad consequence to the condo conversion boom here. A good number of these conversions could end up being investments for people, instead of homes for owners.
One on side that is good, since there will still be rentals on the market. On the other side, though, you now have more landlords who have less of a stake in a building/neighborhood, and you could end up with worse landlords.
That is OK, Paradise, if I wanted to keep that name I would have continued to use it.
Thank you for your understanding, but what happened to me happened because I bought into fantasy, wouldn't recognize reality. What happened to me was my fault, and it was instructive. I'm grateful to the many people who assisted me in ways large and small, and I'm happy to assist any person who is in a really bad situation and who is trying to work his way out of it.Moreover, I'm way more than happy to help the small slice of the population that really can't fend for itself, such as children, the elderly, and the disabled, especially the mentally ill who make up most of the homeless population.
The people who have and always will deeply anger me are people who totally and repeatedly refuse to take responsibility for their own actions, and hold the rest of us responsible for what happens to them while they continue to engage in actions and behaviors that got them into their predicament to begin with.
As a nine year renter in Rogers Park, I've seen the loss of affordable rentals under Joe's watch.
I've seen the volitional withholding of police services motivated by both graft and bigotry drive out truly long term home owners and allow the criminal activity your self-satisfied condo ownership "replaces".
I've seen the influx of the speculative "gobbling up" of the resulting crime filled rentals by developers armed with pie-in-the-sky construction and city projects Photoshop'ed by DevCorp. I've seen the demographic of the whole process used to justify the expansion of the Rogers el stop to a shopping center that sells the same thing the businesses on Howard street do, empty rental space.
I've seen predatory banks lend for shoddy construction and predatory homeowner's loans.
I've seen para-military police action against drug problems that erode everyone's liberties and glorify the same police who were accepting bribes, from developers and drug lords, to turn a blind eye only a few years before.
I've seen units converted, inhabited for mere weeks, then a "For Sale By Owner" sign put in the window. I've seen a resident profile that went from "no car owned" to "two SUV's with street parking" with no expansion of parking options, only shady parking space exemptions from Joe. Now, 9 months later, I still see that same "For Sale By Owner" sign and it has given birth to several others.
I've seen self-satisfied condo owners blog to reinforce stereotypes and degrade a fundamental instrument of our constitution, where we pledge to "promote the general welfare to secure the blessings of liberty".
As we reap the coming economic down turn and high energy costs we sow (with our apathy towards our ongoing war crimes) condos will be reclaimed by the bank and returned to a rental unit, reconditioned at no expense to the bank, and managed with the help of police cameras.
Joe elevates himself with the entire process and remains smarter than us all.
I know a few people in the neighborhood who have bought condos as investments and are renting them out. If a lot more units are sold cheap in foreclosure, I'm guessing this segment of the rental market will increase.
I have rented in Rp for five years now. I also work in the area. I would love to buy a unit here, but everything is so expensive. Quite frankly in spetember I will probably be moving back to cleveland where I can get twice as much space for half the price. WHo can afford these housing prices? People are trying to with creative mortgages that are just screwing them and the general economy over. Its scary to think of the massive downturn the economy is going to have in the future because of this issue. I am 24 and cant fidn anythign around here, one of the cheaper chicago hoods for under 300,000. My coworker is 43, bought her condo here 15 years ago for 45,000. Those days are gone
The thing that makes me really mad about housing in this area (and it gets even worse in Evanston, I think) is that middle-class people who want to buy property are forced to either 1) go elsewhere -- another city, the far suburbs, etc.; 2) buy something really small in a decent area; 3) compromise and buy something of reasonable size in a dicey area.
This is just not right. A decent standard of living should not be available only to the wealthy.
Housing prices are really that bad here compared to Cleveland? Maybe Cleveland's a smaller town than I thought, or has a bad downtown still working on being revived.
I moved here from Minneapolis nearly a year ago, and have found housing prices very comparable, for both renting and purchasing. With the possible exception that the core of downtown Chicago is perhaps more expensive than the core of downtown Minneapolis.
Cleveland really is that cheap. If you doubt that, go to www.realtors.com and type in "Cleveland" or one of its finest suburbs "Shaker Heights".
This could be because Ohio is now just about the most economically depressed state in the country, worse than Michigan or Louisiana.
I mean, it's way cheaper, but you just might have a harder time making enough of a living there to buy a nice 2 bed in the nice contemporary midrise, for $44K, than you do buying the $140K one bed here.
If you are a teacher or other gov't worker, it might be a great place. But I wouldn't want to have to look for a job there now.
Imagine Gary, Indiana as a much bigger city. That is Cleveland.
First of all no alderman can stop a private owner from selling to a developer, only if they have a zoning or set back request. So the blame game on Joe or any alderperson is a waste of words.
Rogers Park has a hugh amount of conversions, but RP also has some of the bigger buildings and land space.
Affordable housing will directly be affected by property taxes especially in Novmenber when the new bills hit.
There are avenues to reach home ownership with the many grant mortgage programs out there, one can get up to 7% from the City Bond program, and there are many more for incomes up to $105,000. If someone doesn't need new construction, there are affordable one bedrooms, but now adays everyone wants ss appliances and granite kitchen, especially in RP where there is more granite then in Italy, its birth place.
Gentrification is another way of saying white folks are moving in. Unless all of you are born and raised Roger Park and whether you rent or own, your part of gentrification. We tend to point fingers at others.
Is 8.8% really a high number? What are we comparing it to and what do the numbers means, how about 91.1% of buildings haven't been converted that turns that numbers around and doesn't look so bad, statistics, can't live with them or without them.
NOw if the City came in and eminent domained these buildings and forced conversions then we would have an issue but to say private landowners are malicious and in the pockets of Joe Moore is an irrational statement.
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