Under Chicago's 2000 Plan for Transformation, nearly all of the projects around the city came down, and in their place (or around their place or in new areas) came mixed income housing. These are developments -- some mid-rises, some duplexes, some townhouses -- where a percentage are Section 8 or otherwise government subsidized, a percentage are "affordable," and a percentage are "market rate." The "affordable" units allow people like teachers, cops, etc. who are working but may not make a lot of income to be able to live in the developments. Around the Cabrini Green area is a development called Parkside of Old Town.
You find very little in the news about how the mixed income developments are actually faring. Are the "market rate" units being sold? What about the "affordable" units? The subsidized units there appear to be full. How many vacancies are there? Are they having problems selling the "market rate" units? How is everyone getting along? Any issues? Here and there are some articles, where the prevailing theme seems to want to be "oh, it's all wonderful," but underlying there appears to be more to it than that. One of my friends for a short time rented a "market rate" unit in another nearby mixed income development called North Town Village. He couldn't wait to leave. His car got broken into repeatedly, his bike got stolen, he had to deal with trash strewn all over the place, and neighbors who camped out on his shared porch all hours of the day and night partying. Not a good experience. You don't hear about experiences like his in the news. This was happening just last year.
I've been wondering about the vacancy rates at Parkside of Old Town. It is in a great location -- a few blocks from the Red Line el, a couple of blocks from the main Old Town drag of bars and shops which is one of the best in the city, close to the grocery store, and brand new. One would think people would be dying to buy in such a place. That would be wrong, from the little I've been able to find in the news.
Let's start with a little over a year ago, in January 2010:
Parkside was supposed to receive its final $3.4 million in promised TIF dollars after selling 85 percent of its 194 market-rate homes. It’s nowhere near that mark, so the city lowered the threshold to 43 percent and cut the number of Parkside’s market-rate homes down to 177. The project’s 85 sales represent — you guessed it — 43 percent of those 177 units, so Parkside’s getting its cash.
So, as of January 2010, only 85 market rate units had been sold, out of what was supposed to be 194. Even with the lowering the number of market rate units (wonder if they were lowered to affordable units or subsidized units?), that is only 43% market rate sold. I've been able to find no information on whether the affordable units are sold out.
This article, dated in May 2010, indicates that from 4Q 2009 until end of 1Q 2010, ten additional units were sold. It doesn't specify whether they were market rate or affordable. Assuming they are market rate, that takes us to 95 market rate units sold out of 177.
In June of 2010, prices were slashed:
One-bedroom condominiums are now being offered from $175,000, two-bedroom condominiums start in the $240,000s, and three-bedroom condominiums are priced from the $320,000s. Two and three-bedroom townhomes are priced from the $330,000s. All condominiums include garage parking, and townhomes come with either a one- or two-car attached garage. A variety of condominium and townhome floor plans are available for immediate delivery.
These are amazing prices.
And in March 2011, the prices are still coming down, along with some free grant money. The Parkside web site urges people to "get off the couch" and buy. It appears from the web site that a lot of units are still available. I haven't found a single news story reporting on how many are still available. Even looking at the real estate listings only turns up one or two units, but that seems to be inconsistent with the Parkside web site. Obviously a lot of the housing industry is having problems, so that may be somewhat to blame for the slow sales. (A lot of high rise condo developments are having problems.) However, condos are still selling around the city, many in locations much worse than this, and with finishes much worse than this. Could it be -- and could people be afraid to admit -- that market rate buyers simply don't want to live right next door to government subsidized renters? I imagine at some point there is going to be a comprehensive study about mixed income developments, much like there have been extensive studies about the projects. It will be extremely interesting to see the long term effects of such developments, and what happens to the market rate units. At some point, the developers are going to have to do something with them.