Author Archives: legallysociable

Is there an invisible wall keeping $1 million homes east of Western Avenue in Chicago?

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One person in Chicago real estate argues $1 million homes on Chicago’s North Side stay east of Western Avenue.

It’s as if there is an invisible wall running through the middle of Chicago, along Western Avenue all the way south of Montrose. When buyers of million dollar homes specify their search criteria they will often specify that they want to stay east of Western Avenue – or if they specify Ukrainian Village, Bucktown, Wicker Park, Roscoe Village, or St. Ben’s those neighborhoods technically stop at Western Avenue so again you are staying east of Western. And it almost doesn’t matter anyway because over the last 7 years there have been very few homes above $1 MM for sale west of Western anyway as you can see in the map below. It’s pretty dramatic isn’t it?

What could be behind this?

Well, for one you are typically getting further away from public transportation options as you move west. But then again public transportation isn’t really that much more accessible just east of Western than it is just west of Western. If you can’t walk to the el stop in 10 minutes in January you may not feel like you have good access to public transportation regardless of which side of Western you live on.

The other thing that happens as you cross Western Avenue is that you cross into a few lower income census tracts. For example if you look at the heat map from RichBlocksPoorBlocks.com you will see that there are are a few sections of Western Avenue where the median household income drops pretty dramatically as you cross the street. In the map below as the color transitions to darker green median household income goes up and as it transitions to darker red it goes down. From Fullerton to Armitage the median income is $66K on the east side of the street but $35K on the west side of the street. And from Armitage to Bloomingdale it’s $107K vs. $66K. And then from Division to Chicago it’s $67K vs. $42K.

Might this change in the future?

There is no question that eventually the area west of Western will become populated with million dollar plus homes but at that point the disparity between the east and west sides of the street may persist and the east side may just be populated with homes priced well above $1 MM. And, regardless, it looks like that day is still several years into the future. In the meantime, if you are willing to be a pioneer you can definitely find cheaper living just a couple of blocks further west.

My interpretation: neighborhoods west of Western Avenue aren’t trendy or gentrifying yet and have different demographics. In other words, there isn’t demand yet among the creative class or young professionals for nicer housing west of Western.

This could lead to some discussion about the limits of gentrification on Chicago’s north side. Just how much can it expand? What happens when it moves out of hipper neighborhoods and comes up against more lower-class or non-white neighborhoods? Right now, there are some gentrifiers who want to live on that edge between the expensive homes and poorer neighborhoods, places they might consider more gritty or authentic. But, would large numbers of people move further west? And are there enough of them? (This, of course, doesn’t even consider the negative effects of gentrification which include making housing more unaffordable, a problem in a region that needs much more affordable housing, and white residents pushing out non-white residents.)

Purchasing a home in 25 different American cities

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Here is a quick look at the estimated incomes it would take to buy a home across American cities:

HSH Associates, a New Jersey-based publisher of mortgage industry data, took a stab at what it would take, incomewise, for buyers in 25 metro areas to be able to purchase a median-priced home, based on the demands of principal and interest payments.

Coming out on top (or on the bottom, depending on how you look at it): Cleveland, with an income of just $22,348 needed to put a set of house keys into your palm…

In calculating its ranking, HSH took the National Association of Realtors’ third-quarter median home price data, as well as its own figures on average interest rates for 30-year, fixed-rate mortgages, to estimate what homebuyers in 25 major metros would need to earn to purchase the median-priced home, he said…

At the top of the expense range was San Francisco, with an income of $125,072. Skipping around the middle of the list, HSH pegged the base line salary for Chicago at $37,078 (11th place); Minneapolis, at $37,115 (12th); Baltimore, at $46,623 (16th); Seattle, at $63,145 (19th); and New York, at $71,255 (22nd place). The full list is at hsh.com.

Quite a difference across cities. There are a lot of factors involved here including the availability of housing, the quality of housing, jobs available in the metropolitan regions, and incomes. Even then, there are huge differences within specific regions.

While these figures aren’t surprising, it is also a reminder of the difficulty of making cost-of-living calculations for the entire United States. On one hand, it might seem obvious to adjust for region or city because of the big differences in housing costs, which typically comprise a sizable amount of expenses. On the other hand, people do have some ability to move so they aren’t necessarily locked in to certain expenses. Yet, the ones who can best weather these cost-of-living differences are already wealthier and have more options.

The Economist calls for more gov’t power to construct needed mass transit in London

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London needs more mass transit capacity – and The Economist argues governmental bodies need more power to expand the system.

Whereas the number of people driving in London is falling, Tube and bus use is surging. Each day 3.7m people use the Underground while 6.4m take a bus. Once-quiet routes are crammed. The London Overground, a rebranded and improved railway line, carries 120m passengers a year, up from just 33m in 2008. The Docklands Light Railway carried 66m passengers in 2008. It now carries 100m…

The changing character of the capital makes things trickier. Much of the city’s population growth over the past decade has been in east London, which is poorly served by the Tube. Parts of inner London such as Kensington and Chelsea have lost people. In future, thinks Sir Peter Hendy, TfL’s boss, most population growth will be in the suburbs. Yet jobs are becoming increasingly clustered in the middle—in the City, Canary Wharf and the West End. “If you’re an insurance company, you don’t look at a map and settle on Enfield,” says Sir Peter. London will not just have more people: it will have more people travelling farther to their jobs…

Grand projects help, at huge cost. But there is a simpler, cheaper way of adding capacity, insists Sir Peter: make much better use of London’s huge existing commuter railway network. Which means giving him more control…

London’s transport could be improved even more if the mayor were given control over local taxes. Crossrail is being financed through a combination of government cash, fares and an increase in land values. A business-rate supplement on non-domestic properties with a rateable value of £55,000 ($80,000) or more has supplied £4 billion for the project. This arrangement could be extended for Crossrail 2, and more widely.

This is an interesting look at how London is going about tackling an issue many cities are facing: how to provide more mass transit amidst growing populations. Additionally, as the article notes, numerous interests may have opposition if lines are not placed to their liking or financial pressure falls on them. Large infrastructure projects aren’t necessarily easy to carry out anyway and all of these projects in London will require quite a bit of power to pull off.

The fate of major world cities could depend on these projects: as they continue to grow, they simply can’t provide more roads and many places do not exactly desire more suburban communities for the wealthy (though more of this may happen, including in London). Yet, the more cities grow, the projects become more and more difficult to put together because of hearing from different groups, moving people, and paying for land and higher construction costs.

Convincing suburban drivers that downtown parking is available

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The Chicago suburbs of Wheaton and Glen Ellyn are looking for ways to convince residents that there are plenty of parking spots in their downtowns:

For years, officials in Glen Ellyn have been hearing from residents about a lack of parking in the downtown, despite studies showing plenty of spaces available for customers…

“It dawned upon us that it isn’t a lack of parking, but addressing the perception of the lack of parking,” Glen Ellyn Police Chief Phil Norton said at a recent village meeting. “We’re going to shift our focus and start working on addressing the perception. You can go anywhere and be within a block or a block and a half of convenient parking.”…

The changes include creating 12 “Customer Only” parking spots where parking meters were removed in the Main Street and Pennsylvania lot. It also includes making the Union Pacific lot at Crescent and Main customer parking only, from 11 a.m. to 6 p.m. Mondays through Saturdays, and making Schock Square customer parking only, from 8 a.m. to 6 p.m. Mondays through Saturdays…

In Wheaton, parking was one of the issues addressed in the final draft of a downtown strategic plan and streetscape plan recently released by the city’s consultants. A parking analysis shows there is enough parking in the city’s downtown, despite a perceived parking issue reported by residents who participated in the survey, officials said.

In the plan, consultants recommended the city consider adding differentiated time limits on certain spaces such as 15 minutes, 1 hour and two hours. That will encourage employees to park in other areas and free up spaces for customers, consultants said.

It would helpful to know why exactly residents think there isn’t much parking. Is it because the parking isn’t right in front of the store? Is it because the parking is more difficult to get into, say angled or parallel parking, than a large parking lot? Is it because the streets or narrower or they can’t perceive they can walk to multiple stores? Some of these issues might seem plausible yet people are willing to endure walks in large, crowded parking lots for big box stores or malls.

The interesting thing to me is that this is a decades-long problem for these downtowns. It dates back at least to the 1950s when downtowns had to start competing with new strip malls and shopping malls which offered multiple stores as well as free parking (as opposed to having parking meters). Even though downtowns might offer plenty of stores within a short distance, I suspect suburbanites perceive that it is more congested and more difficult to get to, even before they know whether parking is available.

Another creative solution: apps or websites that display available parking spaces downtown which gives people real-time information as well as combats percetions that parking isn’t available.

Chicago area highway drivers going faster: 85th percentile between 71 and 75 mph

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A new report highlights the fast highway driving along Chicago area highways:

Only a few are obeying the law. In those stretches, an average of 1 out of 20 motorists drives at or below that limit…

The data, gathered in April, May and September, showed that, depending on which tollway stretch was tested, 91 to 98 percent of drivers exceeded the 55 mph speed limit. In those stretches, the average speed ranged from 66 to 70 mph.

The studies followed a 2012 National Highway Traffic Safety Administration report that showed that average highway speeds increased to almost 71 mph in 2009 from 65 mph two years earlier. At the same time, traffic fatalities — 33,561 last year — are dropping, except for a slight increase in 2012. The report concluded that the higher speeds might have been the product of less speed enforcement in 2009 and fewer cars on the road that year, leading to less congestion…

But perhaps the most fundamental metric in deciding where to set a speed limit is a concept known as the 85th percentile, or the speed at which 85 percent of drivers are either traveling at, or below. In essence, it measures the limit that most drivers place on themselves, regardless of posted speed limits.

Tollway data showed that the 85th percentile speed ranges from 71 to 75 mph.

Read on for more discussion of then how Illinois might or might not increase speed limits.

I’ve talked to numerous people over the years who are nervous about driving in the Chicago area because of these speeds. On one trip that involved driving through the Chicago region, I was asked to drive since I was used to it. While the speed is one factor, I wonder how much the overall traffic, particularly the large trucks, matter. It is one thing to drive fast in more open spaces – Michigan, for example, has had 70 mph speed limits for at least several years but it often doesn’t feel as bad with less people around. It is another thing to have at least three lanes and often four in each direction full of drivers of different sizes and speeds.

One thought: if we end up with a world of driverless cars in a few years, what speed would these cars travel on a highway? Presumably, the cars could go faster because the cars would share information and maximize the speed. But what then would be considered “safe”?

Don’t blame Black Friday and Thanksgiving shopping; they just expose the consumerist system

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As crowds gathered to shop on Thanksgiving and into Black Friday, there has been plenty of backlash from those who think this violates a sacred family holiday to those who don’t like that relatively low-paid retail workers have to work another day to those who bemoan the lengths Americans will go to fight over some doorbusters. All of this might be true but I think it misses the point: these two days simply lay bare American consumerism. In a similar way that Walmart and McDonald’s tend to take the brunt of complaints about big box stores and fast food restaurants, Black Friday and shopping on Thanksgiving share a similar fate: they simply make real what is true about Americans and what they want.

There is a whole system at work here. It involves buying single-family homes, talk about the American Dream (equated with acquiring certain items), dreams about scientific progress and mechanical abilities such that life will be easier, liking having choices more than enjoying the goods themselves, acquiring stuff, and an economy and financial system dependent on average citizens continuing to buy beyond subsistence items. This system involves some great advances put to interesting uses, things like the assembly line, the internal combustion engine, transistors and semiconductors, the mass production of houses, the rise of marketing, and mass media.

The lesson is that hardly any day all year long is sacrosanct any longer; more than family togetherness, more than patriotism, perhaps more than the Super Bowl (which combines all of these things in a different way), Americans enjoy shopping, good deals, and consumption. It is competitive and alluring and our collective retirement accounts may all very well depend on this behavior.

Thanksgiving football game = 11 minutes of action, over 100 ads

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Football is America’s favorite sport but the average NFL broadcast doesn’t actually contain much football:

The NFL’s popularity is all the more remarkable when you inspect the fare it has to offer each week on television. An average professional football game lasts 3 hours and 12 minutes, but if you tally up the time when the ball is actually in play, the action amounts to a mere 11 minutes…

The 11 minutes of action was famously calculated a few years ago by the Wall Street Journal. Its analysis found that an average NFL broadcast spent more time on replays (17 minutes) than live play. The plurality of time (75 minutes) was spent watching players, coaches, and referees essentially loiter on the field.

An average play in the NFL lasts just four seconds.

Of course, watching football on TV is hardly just about the game; there are plenty of advertisements to show people, too. The average NFL game includes 20 commercial breaks containing more than 100 ads. The Journal’s analysis found that commercials took up about an hour, or one-third, of the game.

As this piece correctly notes, this is partly due to the rules of the game where there is down time between plays. At the same time, the NFL broadcasts go out of their way to add commercial breaks. Consider a sequence like this: touchdown scored, kick the extra point, commercial break, kickoff, commercial break. This happens all the time.

For contrast, watch high school or lower level college football. These games still have breaks between plays but the drop-off in wasted time for commercials is astounding.

One other note: if it weren’t for all the commercials, would the networks still show football games?

Why are so many car commercials set in the Los Angeles area?

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I’ve noticed something about car commercials lately: many of them are shot in the Los Angeles area. Here are three common scenes:

1. Driving down a few blocks of downtown Los Angeles, possibly with the Walt Disney Concert Hall in the background or in the parking garage that provides a nice overlook over the city. Even if you don’t know the concert hall by name, you may have seen this behind numerous cars:

WaltDisneyConcertHallJul12

It takes some work to block off urban streets but these few blocks of downtown get a lot of air time.

2. Driving on Highway 101 along the Pacific Coast. Think of scenes with cliffs on one side, the Pacific Ocean on the other, a sunny day, and a beautiful car driving down a narrow road over curves and with sweeping vistas.

3. Driving along Mulholland Drive with the city in the background or along a similar road in the hills north of downtown Los Angeles. One of the commercials on the air right now ends with a shot of the new car winding its way toward the Griffiths Observatory. The observatory is a nice place to explore and there are good views:

LAfromGriffithsObservatory

Overall, I suspect there is some good reason for all of this. Perhaps it to simply take advantage of all of the power and tools of Hollywood. Perhaps LA is great because of its varied landscape. Perhaps there are some tax breaks involved. However, there are plenty of other cities where this filming could take place and LA is far away from Detroit, the traditional center of American cars. At the same time, this might provide more reasons why that Super Bowl commercial about being “Imported from Detroit” received so much attention.

The features Americans want in their homes for 2014

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Businessweek takes a look at what Americans want in their homes in the new year. Here are a few of the trends:

-Builders says closet sizes have more than doubled in some high-end models from a decade ago. And Pulte Homes notes that walk-in closets are becoming de rigueur for even guest bedrooms.

-Three-bedroom homes accounted for 46 percent of new builds in 2012, down from 53 percent in 2009. Four-bedroom houses have grabbed 41 percent of the newly constructed home market – providing more room for aging relatives or kids who move back.

-The size of U.S. homes is growing again after declining during the recession. The latest government data show the average, newly built U.S. single-family dwelling is 2,505 square feet. That’s within a hair of the 2,521-sq.ft. peak in 2007 at the height of the housing boom.

-About half the added square footage on homes built by Pulte in the past 10 years has gone to storage space. A sign of the times: what Pulte’s director of architecture, Scott Thomas, calls “the Costco room,” a closet near the entrance from the garage that can hold all those jumbo-size packages bought at warehouse stores.

One commentator says this is the “new normal” McMansion. As household sizes have declined and more Americans are living alone, homes aren’t necessarily shrinking (though this is likely skewed by those who have money to buy new homes while the lower end of the market languishes) and people are looking for plenty of storage for all the stuff they own and are buying. So, even if these McMansions might not be as big as some past McMansions or they might be designed better and grenner, it appears consumption is still the name of the game.