In a recent article, Ald. Ameya Pawar (47th Ward) expressed concern over the Chicago North Center neighborhood's increasing housing prices. With enrollment down in both Bell and Coonley elementary schools in 2016-17, Pawar pointed to the housing market in driving young families away from the neighborhood. Price points for single family homes are becoming too high, as most families can’t afford over $1.2M.
Purchasing a multi unit building used to be a great way to offset costs of a home because the family could live in one unit and then rent the other unit. Those types of buildings are few and far between as a lot of them have been purchased and converted to large single family homes. Once a building is converted, the home value can increase to over $1.3M - out of the price range of the average buyer.
If this trend doesn’t change, five years down the road the area’s top-rated schools might become under-enrolled and as a result, under-financed. Families need financial balance through affordable housing in Chicago. Otherwise they will move to the suburbs where they can spend less on a larger home and enroll their kids in great schools.
How did housing prices increase so quickly in North Center? The policy in place in recent years was to encourage developers to build larger, non-starter homes to ease density issues and overcrowding in elementary schools. This has created fewer affordable housing options for young families. Pawar’s solution now is to allow developers to build more entry-level units and focus on diversified housing.
Q & A with Charese David, Real Estate Broker
Q: What are your thoughts about Ald. Pawar’s comments?
A: Ald. Pawar makes a good point - people want to live in the city, in quaint neighborhoods, near good schools, but they’re getting priced out by both rising home prices and higher taxes. I’ve started to see families moving to the suburbs. If the attrition continues, then school enrollment will decline along with the city’s population.
Millennials with high debts can’t afford or don’t want to invest in these bigger homes. When they changed the zoning to limit density, they limited developers as to what they could build - less units and lower building heights. We ended up with these bigger single family homes and converted two flats that are now too expensive for a lot of buyers. We’re losing diversity in the neighborhood because it has become unaffordable for middle class families. This neighborhood is now a completely different demographic from what it was in the early 2000s.
I saw the demand for three to four units buildings ten years ago. In some neighborhoods, developers are allowed to tear down a home and build these multi unit condo buildings. But in North Center and Roscoe Village, there are heavy restrictions. New condominium buildings are only on main streets. There are a few older multi unit buildings on side streets that already existed before the zoning changed. If new multi unit dwellings were allowed, it would create more affordable housing and ease the tax burden on the homeowners. It would also allow for more foot traffic to help local businesses.
Q: How much can an average buyer afford?
A: When you look at the housing market and what families can afford, the sweet spot is $800K - $1.1M. Some can afford more, but not everyone wants to spend much more on a home. They want a comfortable lifestyle, without being house rich, cash poor.
Q: What are families looking for in a home?
A: They are looking for four bedroom homes. They prefer single family homes with a small yard, but would consider a four bed condo with outdoor space.
Q: What’s the solution?
A: Allow developers to build two to three unit buildings with condos that have four bedrooms and three bathrooms. Most families have two children, so this is ideal. Another way to help the lagging enrollment is to enlarge the boundaries for schools. Once a boundary is increased, more people would look into moving into those districts with solid school report cards.
If Pawar’s changes to policy take affect, the North Center and Roscoe Village communities could have a completely different neighborhood in the next fifteen years - a thriving, diverse community.