Today’s Headlines for Wednesday, June 28

  • MPC: An Underutilized Market Exists in Chicago for “Naturally Occurring Affordable Housing”
  • Most African Americans Leaving Cook County Are Low-Income (MPC)
  • Beale: Reilly’s Call to Close Ohio St. Underpass Reflects Chicago’s Double Standard on Crime (Sun-Times)
  • Police: Driver Who Fled River North Crash That Killed His Passenger Later Committed Suicide (Tribune)
  • CPD: Police Tried to Pull Over Off-Duty Police Officer Befor Crash That Killed 2 (Sun-Times)
  • CPS May Pay Private Company About $1M to Manage CTA Fare Card Distribution (Tribune)
  • Luxury Developer Who Had Casa Aztlan Mural Painted Over Says He Will Replace It (Chicagoist)
  • Lots of Popular Biking Streets Are Torn Up for Utility Work Right Now (The Chainlink)
  • CMAP Panel on 8/15 Looks at How Governments Will Fund Infrastructure With Fewer Resources

Get national headlines at Streetsblog USA

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  • rohmen

    The MPC article is interesting, but it seems to be telling half the story. Outside of the Jefferson Park example, why are NOAH buildings not being built in neighborhoods that need them and could support them?

    Developers building luxury apartments in areas that otherwise could use NOAH in-fill often say that (whether true or not) they can’t get loans unless they show the type of ROI that a luxury development will yield. If that’s true, and the supply of NOAH buildings is restricted because private funding simply isn’t available despite demand for those type of developments, it would be nice to know and explore why.

    No one doubts the demand is there for those type of buildings, but the MPC article does little to explain why the private market isn’t supplying that demand.

  • forensicgarlic

    isn’t it legal to use the paths for going from point a to b after parks close? so if you’re an early morning rider of the LFT, you can’t get off at ohio anymore?

  • Tooscrapps

    Don’t tell that to Reilly:
    ““It’s poorly lit and it’s a major access point to and from the lakefront illegally after hours,”

  • johnaustingreenfield
  • So the next time there is an incident at a downtown/near north underpass, will that one be closed and locked too?

  • planetshwoop

    I think a number of financial incentives skew this towards private,single family ownership situations.

    First, the market for single family homes has a bit of a floor around it because Fannie/Freddie will bundle and package your mortgage into a security as long as it is “conforming” — not hard for most normal houses. So the bank has to bear the risk for awhile, but it can usually sell the loan to investors to free up money to do that again. This makes capital cheap and incentivizes private home building.

    This is much much less true in the multi-family unit space. There are some corners where financing is easier — veteran’s homes, senior housing, etc. — that are basically somewhat govt subsidies. (For veterans housing, the VA will guarantee the loan. For seniors, the risk is reduced bc of Soc Security funding.) But generally loans for multi-family have to be done by banks, the rates reset more frequently (say every 5 years vs a 30 year home mortgage), and someone bears the risk that the rents will cover the interest, upkeep, etc. For tax reasons, the owner usually keeps the mortgage bc you can deduct it as an interest expense.

    So in sum to build private multi-family you have to find a bank that will loan the money, manage the float btwn when you take out the loan and the first family moves in, manage the building, manage the interest rate risk, and hope to earn enough back. It’s a risk the market doesn’t see willing to take; dont know if its bankers or applicants that are skeptical.

    There’s lots that could be done to ease the burden: find ways to allow homeowners to legally split their houses into two flats without a ton of paperwork or restrictions; reduce parking requirements to allow more units per sf; provide some loan guarantees to entice more private capital into the market, etc.

  • rohmen

    I agree that there’s potentially a lot that can be done to ease the burden. I guess that’s my issue with the MPC article, it doesn’t explore any of that, or really even acknowledge that the market isn’t being serviced because apparently real or psychological barriers to entry exist for developers that need to be dealt with.

    The MPC seems to focus on the backlash that occurred in Jefferson Park to explain why the affordable housing market has been left untapped, but that was just as much a backlash on density period as it was a backlash on (some) affordable housing being built. People would have fought against even luxury apartments being built to a degree in that spot.

    The more interesting question—and one you get into with regards to bank lending, but not many others are addressing in enough detail—is why literally everything right now (that’s more than 5 units) is being built for income levels that represent only the top 10% of population income-wise. Developers claim it is due to lending practices, and if that’s true, it is going to take some form of government incentive and/or backing of mortgages to get developers to step up and start meeting demand.