Monday, April 30, 2007

Chicago Tribune: Condo boom thunderous,1,5211766.story?coll=chi-newslocalchicago-hed

Condo boom thunderous

Study also shows how city has lost apartments since '89

By Johnathon E. Briggs, Tribune staff reporter. Tribune staff reporter Gary Washburn contributed to this report

April 30, 2007

As the debate over affordable housing picks up steam, a new study analyzing 15 years of Chicago's boom in residential construction found that for every 1,000 condominium units a neighborhood gained, it lost, on average, 27 small apartment buildings and about six large ones.

The study, to be released Monday, offers the sharpest snapshot yet of the dramatic changes that took place in the city's housing stock from 1989 to 2004, changes that have transformed the face of neighborhoods and heightened concerns about affordability.

While the number of housing units in the city remained constant at a little more than 1 million, as many as 97,894 apartment units were removed from the city's housing stock during the period, according to the report by the Center for Urban Research and Learning at Loyola University. Meanwhile, 102,408 condo units located in nearly 5,000 buildings were added.

Based on data from the Cook County assessor's office, the report found that the loss of small and large apartment buildings has been widespread. Condominium growth, while pervasive, has been most intense on the North, Near South and Near West Sides.

Overall, Chicago lost 10,779 -- or 8 percent -- of its small apartment buildings (two to six units). The gentrifying neighborhoods of Uptown, Lakeview, Lincoln Park and the Near North Side lost between 20 and 31 percent of such buildings.

During the same period, the city lost nearly 3,300, or 31 percent, of its large apartment buildings (seven or more units), with Rogers Park, West Ridge, Uptown, Lincoln Square and the Near North Side outpacing the city average. The Near North Side, for example, lost half, or 135, of its larger rental buildings.

Citywide, the number of condo units increased from about 71,800 in 1989 to about 174,200 in 2004. Even more dramatic was the construction of condo buildings, which increased nearly 200 percent from 2,500 in 1989 to 7,450 in 2004.

For years, residents have perceived that "something big was going on" in the city's housing stock, said report co-author David Merriman. But the analysis of previously unavailable or understudied data, he said, quantifies the true scope of the boom in housing construction.

"When I walk home from the train and see apartments that are now condos, I didn't know how common that was. Now I do," said Merriman, an economics professor at Loyola. "The next question is, to what extent has this affected affordability?"

The study by Merriman and Julie Lynn Davis, a doctoral student in sociology, shies from exploring the causes or public policy implications. But it will be distributed this week to the City Council, where an affordable-housing plan by Mayor Richard Daley is under consideration.

The city now requires developers of projects encompassing at least 10 units to reserve 10 percent for low- or moderate-income buyers if the project receives discounted city land and 20 percent if city subsidies are provided.

Daley recently proposed broadening the requirement, mandating a 10 percent set-aside if certain zoning changes are provided and if any city land is involved, even if it is purchased at the market rate.

But the Balanced Development Coalition, an affordable-housing advocacy group, has called for a 15 percent unit set-aside when city land is purchased for new projects and 20 percent if zoning changes are granted that favor the developer.

"A lot has happened, and it's happened fast," Merriman said of the development wave. "If there should be policy, we better get on it right away because it's happening as we speak."

In 1989 nine neighborhoods -- Rogers Park, West Ridge, Edgewater, Uptown, Lincoln Square, North Center, Lakeview, Lincoln Park, the Near North Side -- held 68 percent of Chicago's condo buildings and 77 percent of the city's condo units.

By 2004 these communities gained between 120 and 786 buildings and between 1,200 and 22,000 units apiece, the report found.

Logan Square, West Town and the Near West Side also experienced dramatic condo growth. In 1989, the three areas had only 458 units in 31 buildings; by 2004 they had nearly 22,000 units in more than 1,300 buildings. The percentage of the city's condos in the three areas climbed from just 0.6 percent in 1989 to 13 percent in 2004.

In general, areas that gained condos generally lost apartment buildings. For example, over the 15-year period, Rogers Park gained 2,196 condo units and lost 217 large apartment buildings and 119 small ones.

Even small communities, such as Archer Heights, were affected. In 1989 there were 18 large apartment buildings in the Southwest Side neighborhood. By 2004 they were as extinct as dinosaurs, all converted into condominiums.

"Two of my friends, both widows, moved out of the buildings because they couldn't afford the condos," said Stan Lihosit, a 50-year resident.

Ald. Manuel Flores (1st), whose ward includes West Town and portions of Logan Square, said economic factors such as low interest rates and market demand no doubt fueled condo growth. "There were a lot of young professionals buying condos because they thought, 'Why pay $1,000 in rent when I can pay a mortgage and build equity?'
" Flores said.

But he said he remains concerned about the decline of affordable apartments.

"One thousand dollars a month for a lot of people is not affordable," Flores said. "Just because it's a rental doesn't translate into an affordable-living option."


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