CHICAGO | General Discussions

[LouisVanDerWright]

Originally Posted by Via Chicago

definitely some interesting little bits and pieces of rehabs in N Lawndale. i dont think you would have seen something like this 10 years ago (whether it will get whats its asking is one question and cant say im a fan of the black brick trend thats seemingly now the default way for developers to signal "we gut rehabbed a brick building everyone!", but...)

https://www.redfin.com/IL/Chicago/30.../home/13232464

This place is an atrocity, they stripped the brick clean only to paint it black. Idiots... Also it will never sell, there isn't a single comp within a mile of it, it will never appraise out.

Originally Posted by OrdoSeclorum

Douglas Park is on my watch list for places that might pop. I didn't really even know about it before Riot Fest got booted out of Humboldt Park, but it reminds me a little of of Logan Square or the Northwest Corner of Bucktown in the late 90's. Good transit access, a nice park, boulevards. Feels well maintained with good bones.

Yes, Douglas Park is the best, been investing here for almost 10 years. About to make the jump West of the park, been eying the sketchy North side of it too since that's all OZ.

Originally Posted by Via Chicago

well maintained is a bit of a stretch. walk around and really look at the buildings and they are in sadly, incredibly rough shape with an enormous amount of deferred maintenance. not to say they cant be saved, but its going to take a big influx and pretty fast before the structural issues get to the point of no return. i dont see it happening in time sadly. the buildings are the same age as those on the north side, but they have an additional 30+ years of distress and neglect added in on top of it. wheras anything worth saving on the north side was pretty much tidied up by the 90s/00s.

also, the trash/blight situation is completely out of control, so anyone driving or walking around is going to be turned off pretty quick. not to mention north of ogden is a premanent open air drug market in the park...directly next to a police station.

id love nothing more to see the area rebound. the odds are just so incredibly steep. walk around McKinley Park and its just a completely different vibe compared to Douglas Park, and those communities arent all that different housing wise

I strongly disagree, Lawndale is incredibly well maintained. There are stretches and streets that aren't, but then there are the side streets. Check out Millard and Avers North of Ogden. Literally Logan Blvd style Mansions in perfect condition. Don't let the main drags with litter and white elephant vacant buildings confuse you.

Originally Posted by Via Chicago

thatd be great to see, and at least Lawndale Christian has a track record of actually following through

This, the nexus of Lawndale has become and will be Central Park and Ogden, this is almost entirely because of Lawndale Christian's efforts.

[the urban politician]

Originally Posted by glowrock

Prices might be lower, but square footage tends to be much lower as well. What passes for a bedroom in many Pilsen apartments might as well be a closet in many north side units.

Aaron (Glowrock)

LOL, I almost wonder if some of you forumers have, when touring prospective apartments, unknowingly visited one of my buildings

But yes, bedrooms in Pilsen are tiny, there is no doubt about that.

[marothisu]

Originally Posted by LouisVanDerWright

The "rankings" are often garbage though. For example, the coveted Belding School district in OIP is ranked 2/10 across the board. Not sure why everyone is falling over themselves to buy a $1.5 million house in OIP so they can send their kids to a shit school.

I've actually been thinking this lately. I just assumed they'd send their children to private school or get them into something else. Is that not very true?

As far as rankings go, yeah. True. My elementary schools in Minnesota I went to are rated like a 5. Maybe something drastically changed but they were very good schools with solid teaching. My high school was ranked one of the top public schools in the state. I mean I went to school with multiple people who scored very highly on SAT and ACT, including multiple perfect schools. I had multiple friends going to ivy league or really highly rated colleges like Middlebury, Cal Tech, etc. Most people at the school were kids of doctors or highly paid engineers. Heavy AP classes all around and I know it's still true today. Very good teachers that really set me up for success in college. Yet it's rated a 6...


As far as some areas being less affordable...its probably a good thing to fast track development in other areas whether McKinley Park or Woodlawn or wherever else. Exactly the case here in nyc. Only difference is that it got out of control here. And TUP brought up the state wanting to undo the rent control ban. Remember here in nyc we have rent control and it has slowed absolutely nothing down for new development for years and years.

[the urban politician]

Originally Posted by marothisu

And TUP brought up the state wanting to undo the rent control ban. Remember here in nyc we have rent control and it has slowed absolutely nothing down for new development for years and years.

^ That's because NYC's rent control laws do not impact new construction. They only impact older buildings. WHich is even more preposterous if you think about it, because older buildings have higher maintenance costs.

But I digress....

[west-town-brad]

Originally Posted by LouisVanDerWright

This is categorically false. Single Family Housing has historically had a nominal return in the 2-3% range. Once you account for inflation, the return is essentially zero. It might be your "view", but your view is factually incorrect. You would be much wealthier renting your entire life and piling money into the stock market at 6-8%.

The reason SFH's have a poor return is that people don't actually buy them because they want to invest. They buy them for the freedom to do as they please with their property and for personal enjoyment. This is why the return is so low because people tend to overpay for SFH's like they are doing now.

sorry, no. the leveraged return on a personal residence is not nominal

[glowrock]

Originally Posted by the urban politician

LOL, I almost wonder if some of you forumers have, when touring prospective apartments, unknowingly visited one of my buildings

But yes, bedrooms in Pilsen are tiny, there is no doubt about that.

Perhaps, yes.

Regardless, I've got probably twice the space at the same or lower cost here around Belmont/Pulaski than I'd have in Pilsen. Rentals here are very reasonable, indeed.

Aaron (Glowrock)

[LouisVanDerWright]

Originally Posted by west-town-brad

sorry, no. the leveraged return on a personal residence is not nominal

I'm not sure you understand the word nominal, nominal in economics refers to any gain or statistic that is NOT adjusted for inflation. All returns are "nominal" until you go through the trouble of backing out inflation. For example:

Arthur buys a house in 2010 for $100,000 in 2020 he sells it for $150,000. His gain is $50,000, his nominal gain is $50,000 because that's how many dollars he literally made. However, those dollars are not worth the same in 2020 as they were in 2010. So his "REAL" gain is not $50k or 50%, his real gain needs to be calculated by adjusting for inflation. If inflation was 50% between 2010 and 2020 (it was nowhere near that of course) then his real gain is actually zero because a can of Coke was $1 in 2010 and is now $1.50.

And of course, leverage massively amplifies gains (tell me about it, I turned $5k into several million of RE equity since 2010 by making smart leveraged plays off of properties I got for rediculously low basis), but statistically the gains are so low in the SFH sector that it doesn't really matter. Odds are you will never achieve the 6-8% returns of the S+P even with high leverage. There are times during which you could have greatly exceeded these gains and been the exception to the rule (5-10 years ago being one of them), but most of the time SFHs return the rate of inflation or less meaning they break even or lose money on a real basis.

For example, if you bought the average American house in 1977, it would have gained literally nothing if you sold 20 years later in the late 1990s. Yes, the nominal value would be higher, but the nominal value of a can of Coke or a big mac was equally higher. In fact, from the end of WWII until the mid 1970s, the real value of housing in the US drifted lower. If you bought a house in 1950 and sold in 1970, you would have lost a significant amount of money after adjusting for inflation, tell me how leverage can make negative returns positive again?



The blue line looks great, too bad the orange line is the only one that matters.

[ardecila]

Originally Posted by LouisVanDerWright

Wow, that's... Bizzare... I don't think I've ever seen anyone dismantle a steel structure and then NOT scrap it? Maybe the first time they took apart the Ferris Wheel?

CTA rebuilt that whole section from the ground up in the 1990s with Federal money when they did the rest of the Green Line, and then Daley decided to screw over Woodlawn and tear it down. The Feds were pissed that Chicago was throwing their money in the trash so they required CTA to keep the steel.

I think (but not sure) there may be some kind of 25 or 30 year clock that CTA is running out before they can scrap it. Or, y'know, they can just put the L back up! Hope springs eternal

I'm actually looking at an 8 unit right by the Western Orange Line now. There is definately development starting to jump Western from McKinnley into Brighton. There's even some new construction on like 35th just West of Western.

Yeah it's a great neighborhood. Would be better without Mike Tadros' asphalt plant. Most of the new construction is driven by the Chinese community who are happy to live on a brownfield site next to a rail line if they can get a compact SFH or townhome.

[OrdoSeclorum]

Originally Posted by LouisVanDerWright

tell me how leverage can make negative returns positive again?



The blue line looks great, too bad the orange line is the only one that matters.

I'm not arguing with you, but pointing out for discussion's sake that you're conflating investment property with home ownership. From the perspective of an investor, the orange line doesn't account for rents received, which of course might be significant! And rent inflates year-over-year, which makes inflation less of a concern. Accounting for that would make the blue line go up at some fractional multiplier of the orange line's increase.

From the perspective of a homeowner, the orange line doesn't account for the cost of rent that would be paying if they didn't own the property. And, of course, rents increase each year which also is an automatic adjustor for inflation.

There are also non-trivial tax advantages in many circumstances which aren't accounted for by the orange line. Not a reason to invest in real estate by itself, of course, but back of the envelope I figure I "earn" about 1.5% a year on my equity due to tax advantages of owning a rental property and that's not accounted for in the orange line.

I'm not someone who says that home ownership is a path to wealth or it's a wealth building tool. But it's probably a good idea and I'd expect it to contribute to wealth in a similar way to investing in the broader equity market after accounting for the absent expense of rent.

[ardecila]

Originally Posted by the urban politician

Priced out of Pilsen?

Wow, my rents there are still pretty damn low compared to north side hoods, and I’m sure that buying a home there can’t be too difficult. I’m trying to make sense of this....

We own a condo in Pilsen which was relatively affordable. We're looking for an SFH or 2-flat in the 300k-400k range which is impossible to find if you don't want a serious fixer-upper. Compare that to Oak Park where you can get a renovated home on a larger lot in this price range, that actually has strong public schools.

I'd much rather stay in the city with more amenities, much stronger public transit, more diversity etc.

[SIGSEGV]

Originally Posted by ardecila

We own a condo in Pilsen which was relatively affordable. We're looking for an SFH or 2-flat in the 300k-400k range which is impossible to find if you don't want a serious fixer-upper. Compare that to Oak Park where you can get a renovated home on a larger lot in this price range, that actually has strong public schools.

I'd much rather stay in the city with more amenities, much stronger public transit, more diversity etc.

Those Oak Park property taxes though!

[ardecila]

^ Somebody's gotta pay for the schools. If we lived in any of the above urban neighborhoods we'd likely have to send our kids to private school so it's probably a wash. The more kids you have, the better a bargain suburban living is. Granted, it sucks to keep paying those taxes after your kids are out of the system but that's why you move out after they leave the nest

I should add we are fine with the Steely Dan solution of a duplex-down condo in the city if it comes with some yard space, it doesn't have to be an SFH which does open up more options.

[jtown,man]

Originally Posted by SteelMonkey

Congrats on your degree but judging by your question the only thing you received was the diploma

No.

Aggregates matter. These numbers are taking every wage earner, and we all know the lower wage earners have seen barely a blimp in raises in the last 4 decades.


However, for people in the middle class, we see raises.

My dad has seen consistent raises his whole life, I have, my girlfriend has, her two sisters, everyone I know. None of us are wealthy but our income has consistently been increased throughout the years, more certainly above inflation.

I am sure this is the case for most people in this forum. Just because a McDonalds employee hasn't seen a raise in a decade doesn't mean a hell of a lot of non-min wage job earners haven't.

[Via Chicago]

Originally Posted by jtown,man

No.

Aggregates matter. These numbers are taking every wage earner, and we all know the lower wage earners have seen barely a blimp in raises in the last 4 decades.


However, for people in the middle class, we see raises.

My dad has seen consistent raises his whole life, I have, my girlfriend has, her two sisters, everyone I know. None of us are wealthy but our income has consistently been increased throughout the years, more certainly above inflation.

I am sure this is the case for most people in this forum. Just because a McDonalds employee hasn't seen a raise in a decade doesn't mean a hell of a lot of non-min wage job earners haven't.

ancedotal evidence is not statistically meaningful. i know this and i dont even have an econn degree. if you fall in the upper-middle band of income earners than you have probably done OK. but the reality is the american middle class is shrinking.




^yes the upper bracket increased but so has the lower

evaluating income in a bubble is also irrelevant, COL is just as big a factor. if you need to be located in a big expensive city in order to have a reasonable chance at good employment (not to mention the cost of education needed in order to position oneself for good employment), than income isnt telling the whole story. youre FAR closer to poverty and falling into the lower income class than moving up into the top 1-2% whether you realize it or not.

aggregates do matter, and income growth among the majority of Americans in no way resembles this line:



or this line:



or this line




point is our parents could get the same sort of lifestyle with just a high school diploma and they worked far less hours as well. the student loan crisis didnt just emerge out of thin air, its creating a significant drag on the potential for wealth building among young people. and the reality is, for anyone who dosent have an in-demand degree, they are falling into the service sector which is precisely the kind of job which has seen barely any movement at all in terms of earnings, and which the majority of new jobs growth over the past 20 years could be categorized as.

basically your argument boils down to "im doing good and people i hang out with are doing good so therefore everything is good!". in other words youre living in the the little blue emerald city and pretending that the exploding sea of red isnt something that actually happened and continues to exacerbate year after year



and thats America in a nutshell.

[OrdoSeclorum]

Originally Posted by Via Chicago

ancedotal evidence is not statistically meaningful. i know this and i dont even have an econn degree. if you fall in the upper-middle band of income earners than you have probably done OK. but the reality is the american middle class is shrinking.

I think a couple of you are jumping down jtown's throat a bit, when his point is about personal finance, not multigenerational demographic and macroeconomic income trends.

Yes, the middle-class doesn't have the same opportunity it did in the 1970's when you could drop out of high school in Flint, cross the street to the GM factory and get hired the next day making more than your chemistry teacher did. And the fact the the knowledge economy jobs tend to be concentrated in large metros further limits accessibility to housing. This is real.

But for an individual who is early in his career and who has a professional job and so does his wife and who posts on skyscraper page, from a personal finance perspective--which is how this discussion started--he can probably expect his income to go up over the coming years and decades and there might be an advantage to stretching a bit now so that he doesn't lose the opportunity to take full advantage of inflation and leverage.

If I mentioned here that I was unsure about whether to take up Cross Fit or maybe just buy a Peloton at home, it would be a bit weird to spend a few days posting graphs about BMI trends since WW2; tax incentives provided to corn growers; and about how the mortgage interest deduction has made it more difficult to integrate walking exercise into the lifestyle of most people due to subsidized sprawl. "I mean, yeah, thanks. I just was thinking about maybe getting in a little better shape though, you know?"

[SIGSEGV]

Leaving this here in case anyone is interested:

registration link: https://amacad.force.com/events/s/lt...T0000000bqoUAA

If you haven't heard of him, this guy has the most impressive CV I've ever seen: https://en.wikipedia.org/wiki/Walter_E._Massey

[Handro]

^Registered. Thanks for the heads up!

[TWeb]

Not sure what thread to post this in, but my Dad sent me this picture yesterday of a photo he took from the Hiawatha Amtrak in late summer 1996. It was my first visit ever to the city. This would have been as the Amtrak train was passing Jefferson St. The angled brick building on the right is the back side of what today is Jefferson Tap and Grille, and the C&N Powerhouse smokestack is on the left. Its one thing to know a neighborhood has transformed, but quite another thing to see such a stark contrast in a photo.

Amtrak 1996

[Steely Dan]

^ i dig the gigantic old-school satellite TV dish on top of jefferson tap.

i haven't seen one of those in a good long while.

they only existed for a pretty short window of time.

[SIGSEGV]

Originally Posted by Steely Dan

^ i dig the gigantic old-school satellite TV dish on top of jefferson tap.

i haven't seen one of those in a good long while.

they only existed for a pretty short window of time.

I don't think it's pointed at a satellite since, unless I'm completely turned around, it's not aimed at the Southern sky? (geostationary orbits are above the equator). Probably point to point link for TV or railroad signalling or something.