Subscribe: 
“I looked all over the city, everywhere from Pilsen to Ravenswood.”
That’s an inexact quote, in response to my question about where an interviewee had considered living during her last home search.
Chicago, for many college-educated young people, is much smaller than its municipal boundaries – and much larger than it was 20 years ago. Is it poised to expand, or shrink?
Related posts:
{ 31 comments }
My guess is that it will expand.
I only see more development and more neighborhoods gentrifying in the future
I’d guess expansion on the margins. Further south of 1-55 into Bronzeville. Pilsen slowly gentrifying. Albany Park and some of the NW side hoods.
That depends on how you define “young” though. If we’re talking unmarried 20 somethings they’ll probably “invade or infest or inhabit” areas like Pilsen and Humboldt Park then later move into some of the other areas I mentioned as they get older and married.
I really see Bronzeville developing. It has transit, it has location, it’s near the lakefront, there is a lot of support behind its redevelopment, and it has IIT and is between downtown and Kenwood/Hyde Park.
Of course, the Olympics would help. Otherwise, I think it will still be a slow process
IrishPirate, tup,
Why wouldn’t we see, instead of expansion, an extended infill process, completing the transformation of only partially changed areas?
That’s what happened after the collapse of prior development booms with the corresponding retreat of land prices. And, prior booms didn’t leave Chicago with the overhang of unsold inventory that this one has.
Before we see expansion, wouldn’t we have to see the existing inventory absorbed? Wouldn’t we have to see more infill development in Lake View, North Center, Bucktown, Ukrainian Village, Wicker Park, Ravenswood and all the other neighborhoods that were only partially changed by the current boom?
Where will the demand come from, over the next 10 years, for the development of anything at all in the outlying neighborhoods? Their price advantage has been eroded, if not overtaken completely, by the current fall in prices in more established areas.
Joe,
I guess it depends on whether you are looking at the short term view, less than ten years, or a longer view.
In the short term you’re likely right although outside the main streets there is not much left to develop in some of the hoods you mentioned.
I’m not sure the price advantage of the outlying hoods has been overtaken “completely”. My impression was that the more established gentrified hoods have done relatively better in maintaining their value than some other neighborhoods. I could be wrong.
Tune in to YoChicago 2021 for the result.
IrishPirate,
Ten years is short term? Not at my age.
Take a closer look at my list of neighborhoods – which doesn’t include Lincoln Park, Gold Coast, or any of the first-tier neighborhoods. What you’ll find, I’d guess, is that more than half of the properties were not rehabbed or redeveloped – far more than half in some of those neighborhoods.
Owners sat on property and what became available for development was fairly limited. That resulted in a scarcity factor that drove prices, especially land values, beyond sustainable levels. Think of the $1 million lot prices in non-prime parts of Wicker Park – a measure of insanity if ever there was one.
That scarcity of developable properties also drove development out into the third-tier neighborhoods. Demand for developable parcels has been vaporized, probably for years to come. Patient developers with cash are going to acquire property in closer-in neighborhoods during this period of stagnation.
At the same time, Chicago’s economy is contracting and shedding jobs in some of the sectors that drove demand. Rents are stagnant or falling slightly. Etc. Etc. Etc.
We’re in for some tough years, hopefully few of them. When those years have passed the third-tier neighborhoods will have lost all perception of any momentum and will need some time to regain it.
During those years, as we’ve seen before in Chicago, tastes change and perceptions change and with those changes come growth and development in directions that are simply unknowable today.
Tune in to YoChicago 2021 not for the result, but for a clearer view of the road ahead.
Joe,
the older I get the less I’m convinced I know. Your overall “thesis” is well thought out and based on past experiences. That being said there are factors driving gentrification and the development of cities that as you put it are “simply unknowable”.
With your “tier” approach I’d probably put most of Lake View into the first tier and possibly parts of Bucktown and Wicker Park into a “Tier 1 minus”.
I can think of the possibility of some Middle Eastern countries deciding to lob a few nukes at one another as a factor. Perhaps the swine flu roars back in a different form in the Winter. Possibly the apparent flat economic recovery we are in will prove ephemeral. Maybe gas prices go through the roof driving regrowth in central areas. As bad as it may be in central cities I suspect the outlying regions of the suburbs are in for a rougher haul.
I was speaking to one of my long term neighbors earlier today and she is amazed at the changes in Uptown. I NEVER would have suggested that the condo owning baby stroller/double stroller brigade would become a significant group. I fully expected gentrification, but how it occurred and who moved in has surprised me.
I never and still don’t quite understand the appeal of Bucktown, besides access to the Blue Line and expressway, yet that hood took off in ways I am still surprised at.
One factor that we are not considering is what will happen when “Hizzoner” is no longer in office. The next Mayor has some major infrastructure issues to deal with that have been ignored and deferred. I was walking down Montrose near Damen earlier today and the amount of emergency sewer work going on is staggering. Seemingly water mains and sewers collapse around there on a quarterly basis. That is only going to occur more frequently city wide as the years go by.
If we define short term as 2-5 years I wouldn’t expect much “real estate” growth anywhere in Chicago.
I know Pilsen is one of the more amusing topics that gets discussed on this site. What happens to Pilsen if the economy continues in the dumpster and Hispanic immigration stops or even reverses itself? What is the effect on a neighborhood that has largely been filled with Mexican immigrants who move in for a few years and then decamp to points southwest or suburbia?
Would that speed or slow gentrification in Pilsen?
Tune in to YoChicago 2021 when those of us who are still breathing prognosticate on the future and look back on where we were right and wrong on our predictions. Those of us who are not breathing will be silent for the first time.
Hopefully you’ll still be around Joe. By then you should have some grandchildren to be curmudgeonly with.
Wow, you guys are deep.
Chicago’s “low tier” areas will be reborn when forces outside of Chicago’s control make city living advantageous again. I imagine a prolonged, global shortage of energy being the main driving factor. The key, though, is to have an energy shortage that is sufficient enough to curb widespread automobile usage, yet not so severe that dense urban environments can’t function with modern amenities by way of their advantage through sharing of resources.
So in other words, a scenario in which there isn’t enough energy for everybody to drive their own car to a scattering of destinations every which way, but there IS enough energy for several people to share one bus, train, or trolley to one central destination.
Sorry to bring you the news, guys, but you can pay for a nice car and a hell of a lot of gas with the money you save by living in a decent suburb rather than a transit-friendly area of the city.
Factor in the cost of city housing and the school situation and the city is unlivable for most middle-class families. Leave those elements out of consideration and you can go on living in the fantasy world of curbing “widespread automobile usage.” It’s sheer fantasy, nothing more.
Joe,
it’s not sheer fantasy. Me imagining that I’m as sexy as George Clooney and that young women “dig me” is sheer fantasy.
Now it may be unrealistic to believe that widespread automobile usage will come to an end, but it’s not “sheer fantasy”.
Imagining a large percentage of middle class families giving up suburban lifestyles and moving into Chicago………..that’s sheer fantasy. I’m no fan of suburbia, but it does fill a legitimate need for the majority of the metropolitan population.
I wish I could say differently. I still fully expect to see most of the folks with young kids who live near me in Uptown decamp for Suburbia as the kids hit 5-6 years old.
All that being said there is still a large number of people out there who can live in decent areas of the city more economically than the suburbs. Those people are likely either childless or empty nesters, but as lifestyles change their sheer numbers and percentage of the population will likely increase.
I don’t own a car and haven’t for years. I increasingly see more of my neighbors either going carless or “Zipcar-ing” it and living with only one automobile. I guess time will tell how many others do something similar. Barring a severe rise in gas prices I would expect the increase in the ‘carless’ population to be steady, but modest.
Tune in to YoChicago 2021 when we hold a seance to elicit comments to see how well some of us did on our predictions.
Joe,
Your entire point is based upon the status quo. I am talking about a scenario of energy shortage–an inevitable reality at some point in the future.
tup,
I’m not assuming the status quo. I am assuming that the notion that energy scarcity (as reflected in sharply higher costs) will fuel a back to the city movement is laughably simplistic and fatally wrong-headed.
Will people make trade-offs in response to energy scarcity? Of course they will. Will they move further away from their jobs in the suburbs in response to energy scarcity? Will they take their kids out of good schools in the suburbs and make do with city schools in response to energy scarcity? Will they pay higher insurance rates, higher sales taxes, higher gasoline costs, higher grocery bills, incur the raft of hidden taxes that moving to the city involves, abandon their social connections, tear up their kids’ lives, move to lower-quality higher-cost housing and so on and start a new life in the city in response to energy scarcity? Do you really think that will happen on any measurable scale?
Assume it does. Housing prices in desirable areas of the city would increase sharply in response to any substantial increase in demand, disproportionately negating any potential savings in energy costs. I guess I am assuming the status quo: people will continue to act in what they perceive to be their overall best interests.
^ Joe, I understand that there are a lot of factors involved, and I certainly don’t think naively that everybody will come storming back into the city.
You are also negating the effect that decades of rising energy prices will have on companies’ choices. Certainly many will remain where they are, and perhaps they will work in sync with local Governments to improve bus service to their offices. Suburbs may indeed become denser, and some will thrive while others may go into decline.
But more and more companies, in the energy poor future, may see a greater advantage than before in locating downtown due to the access to Chicago’s massive public transportation network which converges there. Those that may not be willing or interested in paying higher rents now may have a change of heart in an energy-poor future. If even a fairly small percentage of jobs shift downtown that could create significant momentum for greater growth.
But don’t think that I’m so naive as to believe that everybody (or even most people) will suddenly come running back to the city. That’s not what I’m implying.
^ I’d also like to add that the irony of suburbs is this:
The city is expensive because of 1) its desirability and 2) higher taxes to pay for infrastructure & services.
In an energy-poor future, even suburban companies which wish to stay where they are may be pressured to work with local municipalities to provide bus/shuttle services to their locales. If that happens, eventually somebody will have to pay for it–thus higher taxes. And before you know it, in the energy-poor future suburbs begin to lose their price advantage over the city, hence making downtown even more desirable.
tup,
Your argument is only sustainable if you (continue to) deny the realities of metropolitan / suburban Chicago.
If energy scarcity increases pressure for infill development near transit, job centers and in denser areas, the majority of development is likely to occur in suburbs, which have the majority of infill sites that meet those criteria. Cook County has 43% of the infill land that meets those criteria. The outlying counties have 57% of it (pdf file).
Spend some time familiarizing yourself with the data at the Chicago Metropolitan Agency for Planning and you’ll begin to understand how little hope there is of realizing your hopes.
Added: Note, in particular, the 2030 Regional Transportation Plan from CMAP and the assumptions for city / regional job growth on which it’s partially based. Resources are being and will be allocated based in part on these assumptions, not on pure speculation about the impact of energy shortages on locational decisions.
Joe, you must not be reading my arguments, as you continue to misunderstand my “hopes”.
This is what you always do–you argue for the sake of arguing without ever attempting to reach consensus.
Just before your latest post, I essentially argued the same point that you just did.
“And before you know it, in the energy-poor future suburbs begin to lose their price advantage over the city, hence making downtown even more desirable.”
What part of that, and your phrasing of the same point in your prior comment, did I misunderstand?
You’re saying that downtown Chicago’s comparative advantage will increase in a high-cost energy scenario. I’m saying there’s no reason to believe that, and many reasons to believe it won’t. I don’t see how you’re arguing the same point I am – unless I’m arguing it so poorly that I don’t understand my own point.
I guess I don’t understand your argument then.
I am already concurring with you that the suburbs will continue to be where the majority of the jobs are. I am also agreeing with you that infill development will continue to occur in the suburbs, especially more well-situated ones. However, I think there will be a bit of Darwinism–some suburbs will thrive while others will decay.
For all your argument about high costs of living and higher taxes, however, you fail to factor in that increased density and transit services in our future “dense suburbs” will lead to a higher cost of real estate and taxes EXACTLY analogous to what has been happening to the city proper.
It’s just plain common sense. If we are to assume that very high energy prices make further exurban development more and more costly, then it’s inevitable that the existing suburbs will get denser to accommodate more growth. How do you expect the region to accommodate the transportation needs in this increasingly dense metropolitan area? Intersuburban transit services will become more important, and hence higher taxes in an area in which real estate is already more costly.
Where does downtown come into the picture? It already has the infrastructure to tap workers from the ENTIRE metropolitan area, an advantage that no place else in the region has. If you get rid of the cost advantage in the suburbs, I think downtown will be well positioned to attract businesses.
In your above post you said that there is “no reason to believe” such will happen. Why do you say that? Answer this question for me: are you saying that you don’t think high energy costs work towards downtown’s advantage?
I would also like to add that we already have data that high energy prices work towards downtown’s advantage. As energy prices peaked recently, mass transit ridership increased accordingly. As Chicago’s mass transit system is set up to serve downtown, I think this can be seen as working towards downtown’s advantage.
And that is why, besides Sara Lee, you’ll be hard-pressed to name a single significant company that has defected from downtown to the suburbs in the past 5 or so years.
Large companies haven’t moved their headquarters from Chicago to the suburbs because many of them weren’t in Chicago. Run down the list of large publicly held companies based in Chicago and you’ll find most of them headquartered in the suburbs. Abbott Labs, Allstate, Baxter, Illinois Tool Works, Kraft, Motorola, Sears, Walgreens, etc.
Your point about mass transit ridership holds no brief for downtown: it only demonstrates that high energy prices increase mass transit usage.
To answer your question directly, as I’ve clearly stated before, I don’t think there’s any credible reason to believe that high energy costs will provide downtown any comparative advantage.
Energy costs are a minor part of a very complex calculation, and they cut in multiple directions. One small example: Peoples Gas (Chicago) customers paid 30% more for natural gas than Nicor customers (I’m one) last year. And that’s before the city utility tax on natural gas was factored in. I never buy gasoline in the city – 20 cents a gallon more, typically than what I pay. Twice as many residents of Chicago’s central business district commute to work by car than by mass transit. I could go on and on in this vein and I’m not sure what it would add up to – if anything. I am sure that I haven’t heard any solid reason to believe that higher energy costs would benefit downtown Chicago.
^ If you’re going to have this argument with me then you can’t have it on your own terms. You’ve hung your hat on the locations of a handful of Chicagoland’s largest corporations, most of whose workforce are located in other regions of the country and other nations. This is a poor argument and leaves much to be desired, and surprisingly reflects your generation’s assumption that corporate headquarters are the end-all, say-all of the modern economy.
Having followed this issue closely, I can give you a hell of a lot of examples of organizations and companies recently choosing to locate either their headquarters or certain divisions downtown for access to mass transit and a wider talent pool.** Just because they aren’t Fortune 500 doesn’t make them irrelevant. Far from it, in fact. I would go so far as to argue that even in this relatively energy abundant era, Chicago’s downtown is having far greater success than it should given the price advantages suburbs offer.
Finally, you lost me in one area–apples and oranges. The Peoples Gas as well as the commuting argument you provided are irrelevant because I’m talking about downtown OFFICES, not downtown RESIDENTS.
I have the distinct impression you’ve chosen to reject the obvious to protect the integrity of your conclusion. If Chicago’s multi-billion dollar, century old mass transit network is essentially one giant people-moving machine designed to funnel people from all over the region into one tiny district (downtown), then any condition thinkable that pushes users into the system and AWAY from its direct competitor (the automobile and highway network) will benefit the recipient of that network.
It’s not as complicated as you’re trying to make it.
** Don’t ask me to do so, though–I expect your trust on this.
“Your point about mass transit ridership holds no brief for downtown: it only demonstrates that high energy prices increase mass transit usage.”
^ Seriously, Joe? Where the hell else are people headed when they get on that train? Do you think people are hopping on a Metra train to get to downtown Tinley Park? Is it that important to protect the integrity of your conclusion to not make the next logical deduction?
All the trains lead to one place, Joe. If more people are riding the rails, downtown’s “constituency”, if you will, becomes that much larger, and the “better talent pool” argument that has already attracted so many companies becomes that much stronger.
tup,
You’re distorting my argument and ignoring the data that’s relevant. Please examine some of the studies and reports I referenced at the CMAP site. I’m not simply relying on top-of-the-head lists of companies and you know it.
Employment in Chicago’s downtown central business district was only 12.8% of total metro area employment in 2000 and is projected by CMAP to shrink to 11% by 2030.
Mass transit in Chicagoland is much more than the rail system. Even the rail system connects a hell of a lot of people to a hell of a lot of employment venues beyond downtown Chicago. Your notion that it simply funnels people into and out of downtown is stunningly off the mark. It’s so crazy I can’t even begin to address it.
A mass transit rider during rush hour in Chicagoland is far, far, far more likely to be headed downtown than any place else. That this even needs to be clarified is just silly.
And I will argue in perpetuity that downtown Chicago can continue to have a shrinking percentage of metropolitan employment yet still be highly competitive, successful, and growing.
tup,
You say “A mass transit rider during rush hour in Chicagoland is far, far, far more likely to be headed downtown than any place else.”
That’s true as to any single place else. It’s not true in the aggregate. The majority of mass transit riders in Chicagoland – keep in mind that this is a far-flung multi-modal system serving many types of riders – are not headed for downtown Chicago.
^ Okay, I’ll accept that.
(I’m willing to bet that the majority of riders are probably headed somewhere within the borders of the city, though, NOT the suburbs–but that’s not relevant to this discussion)
But lets narrow it down to rail transit–the CTA and Metra trains. Given that bus routes can easily be changed, downtown Chicago certainly does not have a distinct advantage if we are just considering buses. But heavy rail, which is extremely expensive to build nowadays–is a different story. The entire rail network converges downtown. If a future time comes when driving any significant distances on a daily basis becomes prohibitively expensive, I imagine that large (and still largely underutilized) rail network would be something of an advantage, don’t you?
The rail system is a huge advantage to Chicagoland. Whether it cuts in favor of downtown is an open question. How it plays out in the future is an even more open question.
The fact that the lines converge on downtown Chicago tells me next to nothing. You seem to be attaching an almost Thomistic level of causality to that fact.
The Blue Line has made it easy for city residents to commute to work at O’Hare and at the thriving O’Hare office corridor and the Rosemont hotels, office complexes and convention center. The Red Line connects city residents to the Pace bus network and the job centers in Northbrook, Northfield, Glenview, Skokie, etc.
Ask yourself how students get to DePaul, Loyola, Truman College, Kennedy-King, CSU, the U of C, Northwestern’s Evanston campus, and the many other educational institutions that aren’t located downtown.
Metra trains stop at many points along the way to Chicago – the heavily-traveled BNSF line, for example, makes it easier to live in Aurora and work in Naperville and Downers Grove. Metra also takes city residents to jobs in the suburbs. I know several people who take Metra to work in Northbrook from the city.
If the rail system is a weapon in downtown’s arsenal, it’s also a two-edged sword.
I feel like I’m dragging you screeching & wailing to a conclusion that any rational man simply HAS to accept.
These distractions are fine, and I accept every one of them–a lot of people use the transit network to go every which way. There are multiple destinations, and multiple connections, that allow for transit riders to use transit to get to other locations outside of downtown. I get it–fine.
But nothing you have said refutes what I am no longer referring to as my opinion but basic fact. When all things are equal, the most convenient & simplest route wins. Since gas is so cheap now, the car is generally still more convenient. But in the energy poor future in which rail transit becomes an increasingly important mode of transportation, downtown Chicago is the most logical and convenient destination if you are trying to access THE LARGEST talent pool possible. Why? Because on average, getting downtown requires the least amount of various kinds of mode & station transfers for the largest number of people.
No single destination in Chicagoland can say the same thing. Not only that, but many of those other destinations aren’t integrated as well with the transit network as downtown is. The offices around OHare, for example, are designed in typical suburban-office park fashion and come nowhere near downtown in their pedestrian-friendliness–something that, though psychological, really does matter to people.
And just as you “wowed” me with your analysis of all the issues by mentioning Peoples Gas above, I’ll take the liberty of predicting that unless the airlines pull a rabbit out of a hat, the global airline industry will be in serious, prolonged trouble in an energy-poor future. If that ever happens, the advantage of being located in that little office corridor around OHare will–poof! be gone…
tup,
I guess you’re going to have to count me as irrational. For starters, I believe that all things are never equal.
Some employers – many employers – aren’t going to place as high a value as you do on having access to the largest possible talent pool. They may value having an adequate or barely adequate talent pool that’s a hell of a lot cheaper, as it often is in the suburbs. The “largest talent pool” takes on an entirely different character for many types of employers and, in many cases, that talent pool won’t go downtown if you sent a magic carpet to pick them up and transport them there.
Many employers will value a location close to where their executives live and with adequate parking over any other location. Many employees will choose work closer to home at lower compensation rather than take public transit downtown, etc.
People value, to make this brief, an incalculable number of factors over the ones you consider of such high importance.
Your “basic fact” is an empty, simple-minded conjecture based on little experience with how employers actually make location decisions.
I may be irrational in your view, but I’ve employed quite a few people, moved my business a number of times, and sat in on any number of employer location decisions back in the day. I’d like to hear your take on this after you’ve done the same.
^ Well access to mass transit and the best talent pools matter to some. The roughly 5 companies/organizations that have chosen to locate their new offices in downtown Chicago in the past 3 weeks all sited that reason.
tup,
We’d both love to see downtown Chicago grow and prosper. Let’s close this topic on that note.
Comments on this entry are closed.