Lol, what a silly little conversation... I'm in!
Quote:
Originally Posted by Baronvonellis
Yea, but Chicago isn't yet Paris, London or New York to command those international Alpha city rents. I'm a well paid professional and I would never pay $2300 a month rent, that is crazy!That's just throwing money down the drain. I have a roomate, and I like having extra spending money left over at the end of the month after all my expenses. Large swaths of the city are still undervalued and dilapidated because of crime and conversion from a industrial to a service economy.
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A. You might feel differently about paying $2300 a month if you had a fancy tech job tossing you ten stacks or more a month.
B. Of course large parts of Chicago are industrial wastelands, that's the point. See below:
Quote:
Originally Posted by the urban politician
^ It has nothing to do with "alpha city" status. SF and Boston have higher rents than Chicago. Washington DC does too.
If the conditions in Chicago were such that much higher rents were justified, it would unlock a ton more investment and drastically turn this city's fortunes around.
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And so does Denver and Miami, and Seattle, and just about every other city in the US. Which cities have lower rents than Chicago? Sunbelt sprawltropolises and other rustbelt cities decimated by deindustrialization. The pattern here isn't that there is a special reason (as Via appears to believe) that each city with significantly higher rents than Chicago has those rents. It's that there is an entire class of cities in the Midwest that were built around industry and built on terrain that is non-restrictive which means they all have lower rents.
Chicago is undoubtedly an "alpha city" and a "World city" and every other lame moniker city nerds bandy about as if it means something. It has one of the ten largest metro economies on earth and, by some measures, is one of the five largest. As such it theoretically should have astronomical rents like London, NYC, Washington DC, Singapore, etc etc etc., but, unlike those cities, Chicago has HUUUUUGGGGGGGGEEEEE tracts of land. I mean they are some of the biggest, nicest, tracts of land I've ever seen. The problem is having hugggggeeeee tracts of land means the maximum long run rents for an Alpha +++ Global Top Notch Big Dog Brand City(TM) like Chicago are limited to (Cost of Construction + Land Value) / Cap Rate. There's this little thing called supply and demand and, considering we have HUUUGGGGEEEE tracts of land, that means the Land Value component of that equation is very very limited until that supply dries up. That's not speculation, that's basic financial math that you would find in any RE textbook.
Quote:
Originally Posted by the urban politician
Rampant profit making built Chicago. Did you just notice this now?
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Lol, that's what I've been thinking the whole time I've been reading this. I for one am shocked that someone would dare profit. If you let people make profits, they might even, gasp, renovate or build more units. Oh the horror!
PS: I just renovated a two flat in Avondale and rented a 2 BD / 1 BA with additional living space in the basement for $1,700/MO to a couple of recent college grads with jobs at downtown tech startups. I then sold it for double what I paid for it to a young couple starting out. The husband moved here from NYC to work for Salesforce and is "never going back there, you could never buy a property like this there". He now took a job with a tech startup as well and is fucking killing it. As a result I made a dirty, evil, filthy profit and, instead of blowing it on a Ferrari like some asshat, am planning on using it to buy more properties like this so I can get more filthy, immoral, profits and provide more hipster housing and starter homes for young families. What a baddie I am...
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