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  #45321  
Old Posted Jun 20, 2019, 3:17 PM
Handro Handro is offline
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Originally Posted by ardecila View Post
The longer version of the story is that CHA's directive, since the time they tore down the highrises, is to build mixed-income developments. This means partnering up with private developers to fund and construct each project.

However, as you know, private developers compete for capital... and with the housing market being so hot, why would investors choose to sign on to a dicey mixed-income development when there's countless juicy market-rate projects to sink their money into?

CHA also wanted the market-rate portion of these developments to be for-sale units... the thought, right or wrong, was that having homeowners in the community instead of 100% renters will lead to better outcomes. But of course, the for-sale market is anemic and has been for over a decade. Millennials aren't as interested in buying a home, and the ones that are interested are often unable to qualify. The limited demand that IS out there is, again, drawn to market-rate developments and not CHA mixed-income communities where there's not much hope of appreciation over time.


CHA has the cash to rebuild 100% public housing, but they're reluctant to do that because the public consensus is still in favor of mixed-income even if such developments are now all but impossible to get off the ground.
I think it has less to do with lack of interest and more to do with stagnant wages, obscene debt, and rising COL, but I digress.

Couldn't CHA break up some of their larger plots into smaller plots (thinking Cabrini or something like that) and then sell disparate plots to private developers, let them build, and then build 100% affordable to fill in the gaps, thus creating a mixed use community? Do they already do that?
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  #45322  
Old Posted Jun 20, 2019, 3:34 PM
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Originally Posted by Handro View Post
I think it has less to do with lack of interest and more to do with stagnant wages, obscene debt, and rising COL, but I digress.
Here's a New York Times article to correct what you may have heard. Wage growth has topped 3 percent for at least nine straight months.

https://www.nytimes.com/2019/05/02/b...h-economy.html
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  #45323  
Old Posted Jun 20, 2019, 3:51 PM
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Here's a New York Times article to correct what you may have heard. Wage growth has topped 3 percent for at least nine straight months.

https://www.nytimes.com/2019/05/02/b...h-economy.html
Glad the trend of stagnation might be changing. As noted in your article:

Quote:
What took so long?
Many economists were puzzled by the slow pace of pay increases because it looked as if a fundamental relationship had broken down.

Decades ago, economists observed that when unemployment falls, wages tend to rise, as companies are forced to offer higher pay to attract workers. Yet even as the unemployment rate fell from 10 percent in 2009 to less than 5 percent in 2016, wages rose slowly. Even now, with the unemployment rate near multidecade lows, wages are not rising as quickly as standard models suggest they should be.
3% wage growth for a couple of years isn't enough to change a decade+ trend that has led to the current lack of major purchases by 25-35 year olds. And is that slight wage growth enough to keep pace with rising costs of just about everything?

https://www.investopedia.com/ask/ans...-years-ago.asp

Quote:
The Bottom Line
Taken together, these figures indicate that, while the average person is still making the same amount of money when accounting for inflation, prices for many of the daily necessities have gone up considerably, which means that each dollar earned does, in fact, buy less than it did 20 years ago.
But again, I digress, wrong thread for this. I'm sure we're both right by some metric.
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  #45324  
Old Posted Jun 20, 2019, 5:13 PM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by ardecila View Post
The longer version of the story is that CHA's directive, since the time they tore down the highrises, is to build mixed-income developments. This means partnering up with private developers to fund and construct each project.

However, as you know, private developers compete for capital... and with the housing market being so hot, why would investors choose to sign on to a dicey mixed-income development when there's countless juicy market-rate projects to sink their money into?

CHA also wanted the market-rate portion of these developments to be for-sale units... the thought, right or wrong, was that having homeowners in the community instead of 100% renters will lead to better outcomes. But of course, the for-sale market is anemic and has been for over a decade. Millennials aren't as interested in buying a home, and the ones that are interested are often unable to qualify. The limited demand that IS out there is, again, drawn to market-rate developments and not CHA mixed-income communities where there's not much hope of appreciation over time.


CHA has the cash to rebuild 100% public housing, but they're reluctant to do that because the public consensus is still in favor of mixed-income even if such developments are now all but impossible to get off the ground.

What was the track record I wonder in terms of the market component of the earlier 00s/pre-recession mixed income CHA developments (I suppose mostly concentrated in the former Cabrini area)? Has the CHA been resistant to tinkering with the for-sale percentages of its model new mixed-income developments/adding larger market for-rent components? There should have been some flexibility built-in for a variety of market changes. We'll likely be in the next market downturn (which will undoubtedly differ in ways from the last) - or nearing it - by the time the next projects are finally underway.

More broadly, my view on the relatively anemic for-sale new construction market is that it is actually more of (or at least, in roughly equal parts) a supply issue as opposed to a fundamental underlying demand issue. There's no question that millennial lifestyle preferences are a component on the demand side...not arguing against that fyi.....but I do think there is existing for-sale demand that is not currently being met on the new supply side.
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  #45325  
Old Posted Jun 20, 2019, 5:15 PM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by Skyguy_7 View Post
Here's a New York Times article to correct what you may have heard. Wage growth has topped 3 percent for at least nine straight months.

https://www.nytimes.com/2019/05/02/b...h-economy.html

That's merely a recent bump - and very much remains to be seen if it can be sustained. The point is that nominal and real wage growth this decade has vastly underperformed that seen in previous decades.
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  #45326  
Old Posted Jun 20, 2019, 6:22 PM
ChiPlanner ChiPlanner is online now
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Originally Posted by SamInTheLoop View Post
What was the track record I wonder in terms of the market component of the earlier 00s/pre-recession mixed income CHA developments (I suppose mostly concentrated in the former Cabrini area)? Has the CHA been resistant to tinkering with the for-sale percentages of its model new mixed-income developments/adding larger market for-rent components? There should have been some flexibility built-in for a variety of market changes. We'll likely be in the next market downturn (which will undoubtedly differ in ways from the last) - or nearing it - by the time the next projects are finally underway.

More broadly, my view on the relatively anemic for-sale new construction market is that it is actually more of (or at least, in roughly equal parts) a supply issue as opposed to a fundamental underlying demand issue. There's no question that millennial lifestyle preferences are a component on the demand side...not arguing against that fyi.....but I do think there is existing for-sale demand that is not currently being met on the new supply side.
I can't recall where I was reading about it lately, but an article was addressing CHA's development around Cabrini from the '00s and how much of it was owner occupied vs. rentals. Needless to say it was referencing how risky it was and all but said it proved to not be the best investment of funds.

That said, hindsight is 20:20.

Anyone heard about when Cabrini will get its first new tower?

https://chicago.curbed.com/2019/3/22...rabee-clybourn
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  #45327  
Old Posted Jun 20, 2019, 6:22 PM
Rizzo Rizzo is offline
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Looks like a TOD project for 3347 N Southport. Will be discussed next Wednesday at WLVN meeting.



https://chicago.legistar.com/View.as...0-39FFB9720CDE
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  #45328  
Old Posted Jun 20, 2019, 6:32 PM
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Originally Posted by SamInTheLoop View Post
What was the track record I wonder in terms of the market component of the earlier 00s/pre-recession mixed income CHA developments (I suppose mostly concentrated in the former Cabrini area)? Has the CHA been resistant to tinkering with the for-sale percentages of its model new mixed-income developments/adding larger market for-rent components? There should have been some flexibility built-in for a variety of market changes. We'll likely be in the next market downturn (which will undoubtedly differ in ways from the last) - or nearing it - by the time the next projects are finally underway.
Actually there are significant pre-recession communities distributed in equal parts to all the CHA's large development zones. Cabrini, Robert Taylor/Stateway, Roosevelt Square, West Haven, Rockwell Gardens.

I don't know for sure, but I imagine many of the (market rate) for-sale units in the CHA communities were bought by investors on favorable mortgage terms and now rented out (at market rate) for a tidy profit, probably to middle-class black residents.
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  #45329  
Old Posted Jun 20, 2019, 6:35 PM
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Interesting project I was unaware of - via DPD twitter

Quote:
Plan Commission approves 3115 Properties' plan to redo a parking garage at 3115 N. Broadway in Lake View as 72 residential units with ground-floor retail space. The project will add two stories to the building and retain 60 parking spaces. Seven units will be affordable.
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  #45330  
Old Posted Jun 20, 2019, 6:47 PM
LouisVanDerWright LouisVanDerWright is offline
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Originally Posted by Handro View Post
I think it has less to do with lack of interest and more to do with stagnant wages, obscene debt, and rising COL, but I digress.
Also has a lot to do with the complex relationship between Millenials and their Boomer parents. Much of the housing market right now is being distorted by the fact that Boomers are the largest generation prior to Millenials. The Boomers are also by far the healthiest generation at their age yet (despite the trend of dropping life expectancy here in the US due to epidemics of obesity and opiods). Many of them also experienced economic trauma alongside their children as they saw retirement plans dashed and careers disrupted in their highest paying years. Therefore Boomers just aren't getting out of the way like prior generations have moving toward their retirement. This manifests itself in the labor market in the same way as it does in the real estate market. There was just a Tribune piece on this the other day:

https://www.chicagotribune.com/real-...623-story.html

The other thing this article doesn't highlight as much is that Boomers are also more apt to move into areas that are also hot with Millenials like urban cores when they do decide to downsize.

Quote:
Originally Posted by Skyguy_7 View Post
Here's a New York Times article to correct what you may have heard. Wage growth has topped 3 percent for at least nine straight months.

https://www.nytimes.com/2019/05/02/b...h-economy.html
Yes, wage growth is finally breaking out. Again, these trends have a lot to do with the distortions of the recession, but primarily in it's effects on Millenials and Boomers. The Boomers aren't retiring as early as prior generations as they enjoy longer good health, try to make up for lost years of productivity or savings in the recession.

Quote:
Originally Posted by Handro View Post


3% wage growth for a couple of years isn't enough to change a decade+ trend that has led to the current lack of major purchases by 25-35 year olds. And is that slight wage growth enough to keep pace with rising costs of just about everything?

https://www.investopedia.com/ask/ans...-years-ago.asp
As I mention above, Millenials are still being effected by the elongated lives and careers of their parents. Millenials stand to quickly advance in their careers once Baby Boomers get out of the way, but the all seem to be staying put as long as possible.

The other thing people don't appreciate is that the United States is about to start the largest transfer of wealth in history: Boomers leaving their estates to Millenials. In another 10-20 years when Boomers start passing on in large numbers, Millenials stand to inherit more wealth than any generation in history. The question is whether that will make up for the damage of student loans and the recession or whether it will just further enhance widening wealth disparity.
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  #45331  
Old Posted Jun 20, 2019, 6:54 PM
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Interesting project I was unaware of - via DPD twitter



Nice! I really hope to see more conversions like these
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  #45332  
Old Posted Jun 20, 2019, 7:04 PM
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Couple of interesting adaptive reuse projects approved today. I'm particularly interested to see how the first one goes. If it succeeds, it could be a good model for other conversions of parking garages into more active uses.

EDIT: sorry for double post on the first one - should have refreshed first! The Sears adaptive reuse is also interesting.
Quote:
Tweet: Plan Commission approves 3115 Properties' plan to redo a parking garage at 3115 N. Broadway in Lake View as 72 residential units with ground-floor retail space. The project will add two stories to the building and retain 60 parking spaces. Seven units will be affordable.
Quote:
Tweet:
Plan Commission OKs a 161-unit adaptive reuse plan for the former Sears store at North and Harlem in Austin. The $84 million Seritage SRC Finance project includes four affordable units and a $627,000 AHOF payment. Ground-floor grocer and health club will support 200+ jobs.

Tweet: Plan Commission also approves Seritage SRC Finance's 152-unit plan for 7141 W. Wabansia Ave., adjacent to the former Sears store in Austin. The four-building rental project will include four affordable units, a $574,000 AHOF payment and parking for 177 cars.
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  #45333  
Old Posted Jun 20, 2019, 7:37 PM
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I noticed the Flats redevelopment at 5050 N Broadway is looking for a rooftop tenant for a bar/restaurant.

https://images1.loopnet.com/d2/kb7D3...s/document.pdf
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  #45334  
Old Posted Jun 20, 2019, 8:32 PM
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Plan Commission also approves Seritage SRC Finance's 152-unit plan for 7141 W. Wabansia Ave., adjacent to the former Sears store in Austin. The four-building rental project will include four affordable units, a $574,000 AHOF payment and parking for 177 cars.
A few weeks ago, someone on reddit claiming to be a real estate agent said they noticed a bunch of cops buying homes in Austin. I imagine it was the Galewood area, where this renovation is happening.

If the city workers moving out of Jefferson Park, Portage Park and Norwood Park due to property value/tax increases and start making this neighborhood home it could have a real positive impact on Austin.
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  #45335  
Old Posted Jun 20, 2019, 8:40 PM
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Originally Posted by Rizzo View Post
Looks like a TOD project for 3347 N Southport. Will be discussed next Wednesday at WLVN meeting.
https://chicago.legistar.com/View.as...0-39FFB9720CDE
What on Earth.....
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  #45336  
Old Posted Jun 20, 2019, 8:58 PM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by the urban politician View Post
Nice! I really hope to see more conversions like these

yeah - that's fantastic.
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  #45337  
Old Posted Jun 20, 2019, 8:59 PM
SamInTheLoop SamInTheLoop is offline
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I can't recall where I was reading about it lately, but an article was addressing CHA's development around Cabrini from the '00s and how much of it was owner occupied vs. rentals. Needless to say it was referencing how risky it was and all but said it proved to not be the best investment of funds.

That said, hindsight is 20:20.

Anyone heard about when Cabrini will get its first new tower?

https://chicago.curbed.com/2019/3/22...rabee-clybourn

Don't know how I missed this one, but.....yes, please.
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  #45338  
Old Posted Jun 20, 2019, 9:02 PM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by LouisVanDerWright View Post
The other thing people don't appreciate is that the United States is about to start the largest transfer of wealth in history: Boomers leaving their estates to Millenials. In another 10-20 years when Boomers start passing on in large numbers, Millenials stand to inherit more wealth than any generation in history. The question is whether that will make up for the damage of student loans and the recession or whether it will just further enhance widening wealth disparity.


I will go way out on a limb and state that inherited wealth will continue to further increase wealth inequality. I know, quite the gamble.
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  #45339  
Old Posted Jun 20, 2019, 10:45 PM
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A few weeks ago, someone on reddit claiming to be a real estate agent said they noticed a bunch of cops buying homes in Austin. I imagine it was the Galewood area, where this renovation is happening.

If the city workers moving out of Jefferson Park, Portage Park and Norwood Park due to property value/tax increases and start making this neighborhood home it could have a real positive impact on Austin.
I don't think it's anything new for Galewood to be a destination for cops and firefighters. It's always been cheaper than the Far NW Side hoods, but the public schools were never as good. If you're sending your kids to Catholic schools, though, I guess it doesn't matter. I think the allure of being close to Oak Park amenities for the Millennial generation is now a lot stronger than it used to be for previous generations, even among the more traditional-values conservative types. Also, the housing stock in Galewood is very nice compared to surrounding areas. Lots of Tudors and Georgians, not a lot of mid-century bungalows.

I do think the Boomers in Norwood/Edison Park are holding onto their houses, so there's not much room for the next generation to move in.

I agree broadly that parts of the West Side will be coming up faster than anyone expected, and Galewood will certainly be a bright spot, but other parts will probably still be blighted by the time I die.
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  #45340  
Old Posted Jun 21, 2019, 3:15 AM
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Great! I just signed up on the app.
Follow up to this post from June 14–signed up for the 311 app and requested two trees for the parkway in front of my condo (anonymously). Got home today to two new trees. Pretty amazed, I was skeptical they’d get planted at all let alone in less than a week!
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