“Gut rehabs are still going on at a pretty good pace. A stroll around Buena Park reveals at least a half dozen gut-rehabs that are currently under construction or about to occur. Part of this is due to the fact that we have a difficult alderman to deal with, and it’s easier to get a 1-for-1 unit conversion than to ask for a zoning variance.
“Gut rehabs definitely extend the life of older housing. If you go to most parts of Western Europe, you’ll notice that almost everything ‘new’ is a gut rehab. I think it’s the way that most older neighborhoods should be treated if restoration isn’t a viable option. And of course, many buildings aren’t worth rehabbing.
“What will happen if there is a major recession on the horizon? It won’t be as bad as many think for the ’emerging neighborhoods.’ The pace of gentrification will only stall temporarily in places that have a critical mass of new monied residents. It’s the less certain bets like East Garfield Park, Humboldt Park, and Pilsen that have a less certain future. Rogers Park will be fine, though I worry that condos won’t hold their peak 2005 values. But huge price drops are highly unlikely unless we have a MAJOR recession. No one is going to sell a condo they bought at $250,000 for $150,000, for instance. Few people have the equity to drop a price that far, and even a rash of foreclosures wouldn’t have that impact.”