CHICAGO | Politics and Current Events

[the urban politician]

The nature of real estate is changing, and Chicago is going to have to adopt to this. With taxes and fees on the rise, and with the crushing pension obligation, you're going to swing and miss if you keep going after homeowners.

I've read articles about a slew of companies leasing up apartments in apt buildings in the city and then subleasing out rooms for short term rentals. This isn't an AirBnb concept, its short term rentals for a few months or up to a year for people doing work in Chicago and then moving on.

In a building I own in Lakeview, an entity wanted to lease up one of my garden apts and sublease it as an AirBnb, saying they would handle all of the licensing, etc. I politely declined.

Another company now wants to do a corporate rental of one my apts in a Bucktown building. They will sign the master lease and then bring employees in for short term use as they do work in the city. I was not getting these types of offers in previous years.

The city is going to need to get more creative to get its revenue. It's going to have to relax its rules with AirBnb rentals, too. If you don't want to piss off homeowners (and hence voters), you need to open up regulations a bit.

[the urban politician]

Double post

[left of center]

Originally Posted by Mr Downtown

Do you use the same argument to justify dine-and-dash when you eat out? "Yes, when I ordered I promised to pay the check later—but some of these restaurant owners have second homes."

Refer to the quote below:

Originally Posted by rgolch

Except I chose to eat at the restaurant, knowing full well the prices of the individual items.

In this case, my employer forced me to go to the restaurant, and pick up the bill. And I'm paying $1000 bucks for a very average fast food burger with cold fries.

I'm sorry, but we are totally getting gouged in this situation.

Politicians promised these employees someone else's money. If one party in a contract is unable to pay the ridiculous sums promised, the contract gets broken. In Illinois' case, what other choice is there? Economically destroying the state isn't in the union's interests either, since it would decimate future union employment. At some point, both parties need to realize that the promises made to current and retired employees is unsustainable and needs to be revisited. Its not fair at all, but its the least damaging solution.

The current path is unsustainable.

[jpIllInoIs]

Chicago Tribune By Jeremy Gorner Chicago Tribune


Billionaire hedge fund manager Ken Griffin is pledging $10 million to support the Chicago Police Department’s use of technology in high-crime areas.
The money will largely go toward the department’s Strategic Decision Support Centers that crunch data and help supervisors deploy officers where they’re needed the most. Since the first of the year, the department has expanded the centers to 12 of its 22 districts.
Griffin founded the Chicago-based hedge fund Citadel, which manages more than $27 billion in assets. Forbes magazine puts his net worth at about $9.1 billion and lists him as the richest person in Illinois.
The donation was announced by Mayor Rahm Emanuel’s office hours after Chicago police Superintendent Eddie Johnson touted the support centers in a speech before the City Club of Chicago. Griffin was unavailable for an interview. Emanuel’s office said some of Griffin’s donation will go toward helping develop a system that would allow supervisors to look at citizen complaints against officers and determine whether they need more training in the field.
The donation also will help the department provide more mental health resources for officers.
In a speech Tuesday to the City Club, Johnson credited the data centers with helping to reduce homicides and shootings in the city over the past year. He said Chicago has seen 13 consecutive months of reductions in gun violence since his department began using the technology in February 2017 in two of the city’s highest-crime districts: Englewood on the South Side and Harrison on the West Side.
The centers, operated with the help of researchers from the University of Chicago Crime Lab, are equipped with large TV screens that display crime maps and surveillance video from cameras in neighborhoods. Officers analyze shooting data in real time through a computer program called HunchLab to determine where best to deploy their beat patrol and tactical officers.
Data is also fed to the centers from gunshot detection technology called ShotSpotter, which tells officers in the field on work-issued smartphones where gunfire is coming from.
Last year, Griffin donated $125 million to the U. of C.’s economics department, the second-largest donation in school history. In December 2016 he donated $12 million to the Chicago Park District for bicycle and walking paths along the 18-mile Lakefront Trail.
Griffin also contributed $20 million to Gov. Bruce Rauner’s re-election campaign last year. It’s believed to be the largest contribution to a campaign by a noncandidate in the state.
jgorner@chicagotribune.com

[Near North Resident]

Originally Posted by r18tdi

"Rentals from $13,500 to over $15,000."

well with the new tax code, massive mortgages and property taxes aren't going to be as beneficial... in addition to that wealthy people might not want to chain themselves down to the fiscally irresponsible city and state either

[JK47]

Originally Posted by Near North Resident

well with the new tax code, massive mortgages and property taxes aren't going to be as beneficial... in addition to that wealthy people might not want to chain themselves down to the fiscally irresponsible city and state either

1) Massive mortgages and property taxes aren't ever beneficial. They just weren't as burdensome due to the tax deduction. That being said, living in an area that actual does provide services and doesn't force teachers to use food stamps and work nights and weekends has its perks. Nine out of the top 10 states for educational attainment are run by Democrats. All fourteen of the states ranked lowest for educational attainment are run by Republicans.

2) Fiscal responsibility. Jesus Christ am I tired of people accusing liberals of being fiscally irresponsible. Do you know what Illinois would have if it received $1 of expenditure for every $1 of revenue it contributes to the Federal gov't in taxes? A balanced budget. Conservatives don't get to talk about fiscal responsibility since the places they run are either 1) falling apart or two 2) getting back far more in subsidies than they contribute in revenue.

[Vlajos]

Originally Posted by JK47

2) Fiscal responsibility. Jesus Christ am I tired of people accusing liberals of being fiscally irresponsible. Do you know what Illinois would have if it received $1 of expenditure for every $1 of revenue it contributes to the Federal gov't in taxes? A balanced budget. Conservatives don't get to talk about fiscal responsibility since the places they run are either 1) falling apart or two 2) getting back far more in subsidies than they contribute in revenue.

This drives me nuts. We must have terrible congressional representation for being one the largest net contributors to the federal budget.

http://www.governing.com/topics/fina...018-trump.html

https://wallethub.com/edu/states-mos...vernment/2700/

[left of center]

^ Reminds me of this

[left of center]

Originally Posted by Vlajos

This drives me nuts. We must have terrible congressional representation for being one the largest net contributors to the federal budget.

http://www.governing.com/topics/fina...018-trump.html

https://wallethub.com/edu/states-mos...vernment/2700/

Yeah, this also aggravates me. Anytime someone boasts about living in a low tax state, I think to myself its because Illinoisans and other high tax states are paying for the services down there. I understand a lot has to do with things like per capita income, number of people and families in poverty, etc. but its not like states like NY, WA, CA, or PA are poor. Their per capita income is comparable, if not greater than IL, and somehow they get more back from the feds than we do. Illinois really gets shafted in this regard, and and its not exactly like the state is flush right now.

[marothisu]

LOL kind of love the commentary and how the "fiscal responsibility of the state" is brought up. If you really think the 55 year old guy with $35M in the bank who is looking to buy a $2M piece of property who might even be retired or works for a large multi national corporation or many other things really cares about this then you need to go out and meet more people with actual large sums of money in the bank. Or maybe the CEO of a company who is going to make millions per year regardless of how this stuff is managed.

[LouisVanDerWright]

Originally Posted by JK47

2) Fiscal responsibility. Jesus Christ am I tired of people accusing liberals of being fiscally irresponsible. Do you know what Illinois would have if it received $1 of expenditure for every $1 of revenue it contributes to the Federal gov't in taxes? A balanced budget. Conservatives don't get to talk about fiscal responsibility since the places they run are either 1) falling apart or two 2) getting back far more in subsidies than they contribute in revenue.

Surely you are joking, Illinois' problems have zero to do with Federal funding. This state owes almost a quarter trillion in unfunded bills. Those bills directly result from so called "liberals" (who are really predatory lawyers that don't actually give a shit about poor people or liberal values unless those policies help them buy votes) making massive unsustainable promises to powerful special interests in order to ensure their own reelection. This has nothing to do with providing welfare to citizens who need it, funding social services, protecting minorities civil rights, or anything truly liberal. This has to do with a bunch of evil looters ransacking the states finances to enshrine their own power for decades. This has to do with a bunch of spineless cowards just going along with that system because "that's the way it works".

Anyone who can't recognize this essence of the problem and instead make excuses like yours fall directly into the "going along with the racket" category. If you want to deflect YOU are the problem. Acknowledge that the state has brought itself to the brink through their own gross mismanagement or continue sticking your fingers in your ears going "la la la la la" until disaster is unavoidable. It's your choice.


Just an FYI, each 1% increase in interest rates results in a $2.5 billion a year increase in the costs of funding this grotesque fiscal haunt. The entire state revenue is $39 billion. A 4% increase in rates results in 25% of the total budget being sucked up by interest payments. I am just aghast that anyone is living in denial of this impending disaster. Tick tock.

[pip]

^
If Illinois received a "fair share of federal funding" relative to the national average, the state's fiscal year 2016 budget deficit of more than $6 billion would turn into a budget surplus of up to $1.8 billion.

llinois would see between $2.6 billion and $8 billion in additional annual revenue if the state received federal government transfers proportional to the national average.

Illinois is ranked number 48 out of the 50 states for Federal government spending returning the state

I remember reading Illinois gets reimbursed at much lower percentages for Medicaid and Medicare than other states.

Which states are donors and takers
https://www.theatlantic.com/business...takers/361668/

[Vlajos]

Unless I'm missing something, if inflation and interest rates skyrocket the pension debt will actually be much more controllable. The investment returns on the pension funds will skyrocket while the growth to pensions is capped at 3% as part of the agreement.

[Skyguy_7]

Originally Posted by LouisVanDerWright

Just an FYI, each 1% increase in interest rates results in a $2.5 billion a year increase in the costs of funding this grotesque fiscal haunt. The entire state revenue is $39 billion. A 4% increase in rates results in 25% of the total budget being sucked up by interest payments. I am just aghast that anyone is living in denial of this impending disaster. Tick tock.

LVDW I would like to borrow your insight, as you come across as a knowledgeable man. You seem to have a lot of exposure in this shithole state, given you own numerous rental properties, so how do you protect yourself against this ticking time bomb gifted to us by evil looter Democrats suckering our most vulnerable citizens who were simply seeking rescue, into electing these looters, when instead, they've completely run this state into the ground.

[LouisVanDerWright]

Originally Posted by Vlajos

Unless I'm missing something, if inflation and interest rates skyrocket the pension debt will actually be much more controllable. The investment returns on the pension funds will skyrocket while the growth to pensions is capped at 3% as part of the agreement.

Haha NO. That law was struck down, as was the Park District Reform and the City's attempts at reform. Limiting COLA to 3% was ruled to be "diminishing or impairing" a pension benefit. So COLA is free to skyrocket to whatever level inflation rises to.

Yes, the 3% cap would have been helpful and let us inflate out of debt, but the constitution is so onerous that you literally can't change pensions in any way other than to increase them without it being shot down by the courts.

This is reality guys, let's not bury our heads in the sand. It IS as bad as it sounds. There is no way out of it short of constitutional amendment which will not happen. There will be a hard default and it's probably only a few years out. But...

Originally Posted by Skyguy_7

LVDW I would like to borrow your insight, as you come across as a knowledgeable man. You seem to have a lot of exposure in this shithole state, given you own numerous rental properties, so how do you protect yourself against this ticking time bomb gifted to us by evil looter Democrats suckering our most vulnerable citizens who were simply seeking rescue, into electing these looters, when instead, they've completely run this state into the ground.

Well that's the bet, prices here already factor in the inevitable sucking sound down in Springfield. I'm buying at those prices because, well, for lack of a better word, the situation can't really get any more fucked than it already is. We have an absolute clause in our constitution that has been interpreted over and over again to mean you literally cannot lower any attribute of a pension plan, not for current workers, not for past workers, not for future workers. Period. End of debate. No, even the unions themselves can agree to it and it's illegal.

It's honestly the most poorly written (or well written if you are a soul sucking union boss) piece of legislation in the entire United States. It guarantees the fiscal collapse of the City of Chicago, State of Illinois, Chicago Park District, and Chicago Public Schools. The numbers are just not ever going to work, it's a mathematical impossibility especially given our demographic decline.

So how do I protect myself? Buy low, sell high. This situation is so fucked that it can't possibly become any worse than it is. At this point even a hard default is better than the status quo because it will force change. Either through some miracle the constitution is amended and pensions are reduced or the State goes totally insolvent and basically shuts down until the Federal Government cleans up the mess or all elected officials lose office and are replaced by people who will actually fix the constitution.

Regardless of which scenario occurs, I win. Right now property in Illinois is priced with the assumption that taxes will constantly increase and people will keep fleeing the state. Once this all comes to a head, those future liabilities will be eliminated and property values will actually rise.


This was Rauner's strategy by the way with the budget deadlock. He basically just refused to sign anything that didn't address this issue hoping that the GOP would hold by his side and force the state into insolvency sooner. But creepy Madigan used his black magic to turn a bunch of GOP reps into traitors to the state and got them to vote for 4 or 5 more years of can kicking. When the state goes down in flames due to rising interest rates I hope angry mobs descend on Springfield (after all state services are cut off in order to pay pensions) and drag Madigan out of the statehouse and tar and feather him.

[moorhosj]

Originally Posted by LouisVanDerWright

This was Rauner's strategy by the way with the budget deadlock. He basically just refused to sign anything that didn't address this issue hoping that the GOP would hold by his side and force the state into insolvency sooner.

Is this really how bankruptcy works? Would a judge allow the state to declare bankruptcy without even attempting to fix the problem through tax increases? Detroit was limited on how much they could tax by the state, Illinois has no such problem.

Still not sure why you are so insistent that bankruptcy would come before any constitutional change. You haven't provided a reason other than it "will not happen". It seems clear that an amendment would be more beneficial to more parties than a default.

[Vlajos]

Originally Posted by LouisVanDerWright

Haha NO. That law was struck down, as was the Park District Reform and the City's attempts at reform. Limiting COLA to 3% was ruled to be "diminishing or impairing" a pension benefit. So COLA is free to skyrocket to whatever level inflation rises to.

Yes, the 3% cap would have been helpful and let us inflate out of debt, but the constitution is so onerous that you literally can't change pensions in any way other than to increase them without it being shot down by the courts.

This is reality guys, let's not bury our heads in the sand. It IS as bad as it sounds. There is no way out of it short of constitutional amendment which will not happen. There will be a hard default and it's probably only a few years out. But..

Horse shit, you are wrong. The pensions have a 3% COLA regardless of CPI, which is why high inflation and interest rates will help alleviate the problem. The 3% cola was bargained for a long time ago and is part of the Tier 1 benefits. If inflation is 5%, the pensioners get 3% COLA, if it's 1%, like it's been for a while now, they get 3%. Also, a new Tier 2 pension was created a few years ago for all new employees and it basically costs the state nothing as its funded almost entirely from the public employees contributions. So the bleeding has stopped, we just have the massive old pensions to pay for. So, we may as well hope for high interest rates and inflation.

And I voted for Rauner and will again.

[Near North Resident]

Originally Posted by JK47

1) Massive mortgages and property taxes aren't ever beneficial. They just weren't as burdensome due to the tax deduction. That being said, living in an area that actual does provide services and doesn't force teachers to use food stamps and work nights and weekends has its perks. Nine out of the top 10 states for educational attainment are run by Democrats. All fourteen of the states ranked lowest for educational attainment are run by Republicans.

2) Fiscal responsibility. Jesus Christ am I tired of people accusing liberals of being fiscally irresponsible. Do you know what Illinois would have if it received $1 of expenditure for every $1 of revenue it contributes to the Federal gov't in taxes? A balanced budget. Conservatives don't get to talk about fiscal responsibility since the places they run are either 1) falling apart or two 2) getting back far more in subsidies than they contribute in revenue.

In my post I didn't accuse any political party of being fiscally irresponsible, in fact I didn't mention any political party at all (not sure why you're so triggered), just the new tax code and facts about our city and state.

It is a fact that Democrats have been running the state and city for a long time, with the exception of some republican governors, who don't control the purse strings like the reps do.

It is a fact that Illinois and Chicago rank extremely low on fiscal responsibility on basically every single metric available, to say otherwise is just not true.

And honestly I could care less about either political party as they are both out for one thing, getting re-elected and kicking cans down the road for the next guy to deal with.

[Near North Resident]

Originally Posted by marothisu

LOL kind of love the commentary and how the "fiscal responsibility of the state" is brought up. If you really think the 55 year old guy with $35M in the bank who is looking to buy a $2M piece of property who might even be retired or works for a large multi national corporation or many other things really cares about this then you need to go out and meet more people with actual large sums of money in the bank. Or maybe the CEO of a company who is going to make millions per year regardless of how this stuff is managed.

I think you have zero clue as to how rich people actually function... I deal with rich people all day every day at my job and to say they don't care is just flat out wrong and lying.

[moorhosj]

Originally Posted by Skyguy_7

LVDW I would like to borrow your insight, as you come across as a knowledgeable man. You seem to have a lot of exposure in this shithole state, given you own numerous rental properties, so how do you protect yourself against this ticking time bomb gifted to us by evil looter Democrats suckering our most vulnerable citizens who were simply seeking rescue, into electing these looters, when instead, they've completely run this state into the ground.

Too bad the Republican Governors we have had for 29 of the past 41 years couldn't help out with the problem. Those evil Democrats making problems, all by themselves.

Consider this, the federal government bailed out NYC in 1975, as they were on the edge of bankruptcy. I imagine the ROI on real estate bought in NYC in 1974 is pretty high.