Last month, I
wrote a post about the number of vacant properties in Chicago and how long those properties
had been vacant.
Now, to elaborate on that post, I have found an
article in the Washington Post that discusses what that actually means for Chicago. The Institute for
Housing Studies at DePaul University has analyzed the housing stock in
Chicago. It has found that the ubiquitious three-flat is 26% of Chicago's
overall housing stock and about 50% of the city's multi-family residential
units. In some neighborhoods, these two to four unit builidings are 70%
of the housing stock.
These buildings are also in foreclosure. Between 20-40% of three-flats
are in foreclosure in some neighborhoods. Those neighborhoods tend to
be on the west and south sides of the city. This should come as no surprise
to anyone following the housing market in Chicago. While areas like Lakeview
are seeing prices coming back to their pre-2007 levels, the predominantly
minority-populated south and west sides are stagnating with urban blight
and zombie properties.
Even more problematic is the fact that many of these three-flats are now
in various states of disrepair and ruin due to the fact that nobody is
maintaining them. The property owners are largely absent and the banks
refuse to finish the foreclosure process, which leaves the properties
stuck in limbo. To make matters worse, lenders aren't giving construction
loans in these neighborhoods, so there's not much hope of rehabbing
The trend in building these days is to build higher-density apartment buildings
because they are more cost-effective for the builders and investors. Unfortunately,
they are also more expensive for the renter, which creates a problem for
Chicago. As more three-flats leave the available housing pool, they are
not being replaced with new three-flats. Without some way to stabilize
this trend, it is very possible that affordable rental housing in Chicago
will be much harder to come by in areas where affordable rentals are needed the most.
While the city has attempted to force banks to maintain these properties,
it does not apppear that there is a clear strategy for how to handle the
shrinking pool of two to four unit apartment buildings.