While other major metropolitan areas around the country have seen vast growth in rental housing since 1990, Cook County has lost more than 5,200 apartments, according to a new study to be released Monday.
Driven by condominium conversions and local policies that encourage single-family housing, many suburbs have seen a drop in rental-housing units.
And during one of the area’s most aggressive building booms, rental housing in Chicago increased by only 8 percent from 1970 to 2000, a fraction of the triple-digit growth that has occurred in Dallas and less than half the growth rate for rental housing in New York.
The disparity is part of a growing mismatch between the kind of housing going up in the six-county Chicago area and the jobs being created in the region, said Frank Beal, executive director of Metropolis 2020, the business-sponsored think tank issuing the report, “Housing as Opportunity.”
In areas where large numbers of working-class jobs have been created, little if any affordable housing has followed. That has led to intensifying segregation of working-class neighborhoods with stagnant economic activity and has forced employees to commute long distances to jobs in areas they can’t afford to live in, housing advocates say.
“This region is doing less than most parts of the country in providing rental opportunities,” Beal said. “It clearly adds to traffic congestion, air pollution and several other inefficiencies in our region that could otherwise be avoided.”
The Metropolis 2020 report contains a substantial measure of good news, especially for Chicago homeowners, who saw the value of their property rocket 37 percent from 1990 to 2001, as values dropped in New York, Washington and Boston and grew a meager 1 percent in Los Angeles.
The report also shows a small growth in home ownership, a category in which Chicago already led peers across the nation.
Beal acknowledged that raising concerns about rental-housing shortages sometimes works against promotion of home ownership, which leads to more investment in neighborhoods and higher savings for families.
The key, he said, is finding the balance between growth in ownership and an adequate supply of housing for people who cannot afford to buy.
Most of the home building in the area has been single-family construction in suburbs, with an increase in condominium conversions in the city taking away rental housing that would be affordable to working poor and middle-income families, researchers say.
Condos sap rental pool
In recent years, about 15 percent of all multifamily homes sold in Cook County were rentals converted to condominiums, said Tracy Cross, owner of Tracy Cross & Associates, a residential market research firm. So far this year, there have been about 1,160 condominium conversions in Cook County, 449 of them in Chicago, Cross said.
That number may grow even more. With interest rates climbing, “it’s in the developer’s interest to separate himself from his building” and sell to private buyers instead of shouldering maintenance costs and trying to charge higher rents, Cross said.
That leads some people to move farther from their jobs to find affordable housing.
Arturo Lopez, 39, spends up to four hours a day driving from his home on Chicago’s South Side to the office buildings he cleans at night in Libertyville, Naperville and Winnetka.
“I want to move to a place that would put me closer to work, but that area is far too expensive,” said Lopez, who earns $11 an hour as an office custodian. “I hardly have any time to spend with my three children, and when I do I’m always tired.”
Worried about traffic congestion and the costs for companies whose travel-weary employees show up late or leave for other jobs nearer their homes, Metropolis 2020, a non-profit agency created by the Commercial Club of Chicago, has pushed for more regional coordination of housing development. The area risks losing nurses, teachers and other workers who could help further diversify the regional economy, according to the planners.
The concern, which has spread into the collar counties, led to the creation of a governmental housing task force that this week is scheduled to recommend legislation to better integrate luxury and affordable residential development in Illinois.
A state law enacted this month requires cities and towns with less than 10 percent affordable housing to submit a plan by April on how they will reach that percentage.
Rentals tough sell in suburbs
Peter Levavi, senior vice president of Brinshore Development LLC, said affordable housing is virtually impossible to develop in suburban communities.
“Many suburban areas don’t want to have multifamily housing because they equate that with people different from themselves, poorer people who will affect their tax base,” said Levavi, whose firm develops homes affordable to low- and moderate-income families.
Town councils wanting to preserve their community’s charm enact zoning laws favoring single-family homes and impose impact fees of as much as $3 million on new apartment buildings, he said.
“At some point you say, I can’t make any money doing this,” Levavi said.
Nancy Dunker, a single mother of two, commutes 45 minutes to Naperville from Plainfield to reach her job as a public information officer at North Central College, where she makes about $30,000 a year. Her Plainfield townhouse cost $150,000, about half of what a smaller house in Naperville goes for.
“If I could find anything comparable in Naperville, I would move in a second. But that’s not going to happen,” Dunker said.
Doug Krause, a real estate broker in Naperville and a member of its City Council, explained the suburban tilt toward more expensive single-family homes as a way to limit other growth-related problems.
“If you increase density, you’re going to increase traffic,” Krause said.
Chicago Ald. Toni Preckwinkle (4th) said the city is in danger of reaching a similar housing gap. Condominium conversions and building teardowns led to the loss of more than 2,000 rental units in the city in the 1990s.
“We’re getting further and further in the hole,” said Preckwinkle, who has legislation pending that would require developers of 10 or more units to make 15 percent of the new homes affordable to low- and moderate-income residents.
Michael Burton, development supervisor at Bickerdike Redevelopment Corp., which focuses exclusively on affordable housing, said the demand for cheaper apartments in the city crystallized for him just before dawn one Saturday this month in Humboldt Park.
Bickerdike Redevelopment had planned to pass out applications at 10 a.m. for 87 rental apartments it recently built on 12 sites in the neighborhood. By 4 a.m. a line snaked around the corner, growing eventually to more than 300 eager people, Burton said.
“We had to turn a lot of people away,” he said. “In this line of work, that’s one of the worst feelings.”
