Chicago suburbs without property taxes – but perhaps not for much longer

In a region known for high property taxes, at least a few suburbs outside Chicago have no property taxes:

A town of about 40,000, Carol Stream managed to avoid a property tax even when another outlier, Schaumburg — a village with a much larger retail base — took the leap during the Great Recession.

But officials say Carol Stream is facing significant budget pressures from rising pension costs. If it maintains the status quo, projections also show the village would exhaust capital reserves during the third year of a five-year plan for roadwork and infrastructure projects…

In Oak Brook, another town that doesn’t charge a property tax, candidates in the last mayoral race took stock of the financial challenges from flat sales tax revenues. Carol Stream also saw a 2.4% drop in sales tax dollars — the village’s largest revenue source — from calendar years 2017 to 2018.

Suburbs have multiple ways to reduce or eliminate residential property taxes. Sales tax revenue can come from shopping malls, big box stores, and other retail options. Schaumburg and Oak Brook have sizable shopping malls surrounded by many more retailers. Communities can also seek out industry; Carol Stream founder Jay Stream intentionally set aside much land for industrial parks (which are still there). Some suburbs would not like this as industry could conflict with an ideal of quiet neighborhoods of single-family homes.

The article suggests these suburbs with no property taxes will have to reconsider because of declining sales tax revenues and rising pension costs. Given the fate of shopping malls and the problems facing retailers, even in successful malls in wealthy areas like in Oak Brook and Schaumburg, communities need additional revenue.

Suburbs typically do not have the ability to quickly counter declining sales tax revenues. In order to not have property taxes in the first place, certain decisions had to be made long ago. Then, later decisions build within a framework of no property taxes. Making changes to land use takes time for study, approval, development, and then reaping benefits. A suburb cannot say it wants to bring in more sales tax revenue and line up a set of retailers operating within a year.

The fate of these suburbs will be worth checking in five years to see whether they can hold on against levying property taxes.

(Reminder: this does not mean residents in these communities do not pay any property taxes. Rather, their suburbs do not collect property taxes even as school districts and other taxing bodies do.)

The role of disasters – such as the Great Chicago Fire – in pushing people to leave cities for suburbs

A thought experiment considering what would happen if the Chicago Fire of 1871 never happened includes this tidbit about suburban growth:

But then, after that second big fire in 1874, Chicago officials extended the restriction on wooden buildings to cover the whole city.

Elaine Lewinnek, author of the new book The Working Man’s Reward: Chicago’s Early Suburbs and the Roots of American Sprawl, says the aldermen contributed to suburban sprawl by making it cheaper to build outside the city. After they changed the law, a real estate booster reported “a brisk demand for building just outside the city limits.” (Some of those areas outside the city limits in the 1870s later became part of the city through annexations.)…

“Things were already changing, as railroad lines and industry were crowding out housing,” Keating says. “The fire made this happen more quickly but it would have happened anyways. People moved more quickly south to Prairie Avenue or out to new suburban towns like Riverside.”

“The fire pushed 27,000 humble homes out of the central city and the North Side, leading to fewer residences downtown,” Lewinnek says. “Yet suburbanization was already happening before the fire, in elite suburbs like Riverside and more humble suburbs too.”

I have not heard this argument before. At the time of the fire of 1871, suburban populations were very modest. Railroad lines had only been in present in the region for a few decades. For example, the suburb of Naperville, which had just lost out on being the county seat to Wheaton, had just over 1,700 residents in 1870 while Wheaton had 998 residents and Aurora had over 11,000 residents.

As noted by numerous scholars, by the late 1800s fewer areas surrounding Chicago were willing to be annexed into the city (unlike communities like Hyde Park). This is usually attributed to the declining status of city life compared to suburban life alongside the declining price of public infrastructure that made it possible for suburbs to have electricity and their own water supplies. But, the scholars above hint at another factor that would become a long-running feature of suburban life: cheaper housing. If Chicago required less flammable materials for homes, people would move to suburbs that did not have such regulations.

More broadly, it would be worth examining whether major disasters in urban areas push people to move to surrounding areas or even other regions. Do earthquakes in the LA area influence population patterns? How about hurricanes in the southeast? Do people leave population centers after terrorist attacks? It would take some work to separate out the effects of disasters on movement compared to other factors.

I have always lived within roughly 15 minutes of a major highway: easy access, no noise

In the homes in which I have lived, I have always had relatively easy access to highways. A short ten to fifteen minute drive is all it would take to get to a major highway and, barring traffic, an additional thirty minutes could take us to a major airport, downtown, or out of the metropolitan area.

On one hand, this is a major convenience. Metropolitan regions have areas that are closer or further away to transportation options. In the Chicago region which features a hub and spoke model of transportation (particularly the railroads but also the highways past I-355), living further out from the city means residents could be located further away from major roads. Trips get longer when it takes more time to get on the faster roads.

Additionally, we get the benefit of living near the highway without the negative externalities of being too close. We do not hear the highway. We do not live near the businesses that tend to collect at a highway exist (gas stations, fast food restaurants, etc.). The lights along the highways and exits are beyond our sight.

One way to see these advantages at play is in real estate listings. In the Chicago region, locations near major highways (and rail lines), tend to have this listed in the property description. Of course, some properties may be too close and this can detract from the home and property. These properties can still sell – they may still be in desirable locations and be nice residences – but that road noise can detract from the private experience many suburbanites desire. In our last housing search, we saw a number of homes within hearing distance of highways and this is not something we wanted.

Chicago area malls trying to reinvent themselves yet not adding many residential units

Multiple suburban shopping malls in the Chicago area are trying to turn it around with different uses:

A casino is envisioned for the former Lakehurst Shopping Center site in Waukegan, which closed in 2001 and was demolished in 2004. It was the proposed site of a casino until the 10th and final state license was awarded to Des Plaines in 2008. With the latest round of gambling expansion, Waukegan could revive that dream.

St. Charles has seen little momentum on a concept plan presented two years ago for the largely vacant former Charlestowne Mall site north of Route 64. It called for the property’s complete revitalization, including a residential development, a smaller mall building and the construction of free-standing commercial structures. Mall owners have yet to make a deal with developers.

Stratford Square Mall in Bloomingdale, which opened in 1981, has been struggling for several years having lost three anchor stores since 2014. It launched a multimillion-dollar renovation project featuring interior and exterior improvements at the 1.3 million-square-foot center. An earlier renovation included the 2014 opening of Round1, a 40,000-square-foot entertainment center featuring bowling, billiards, video games and karaoke…

To further increase foot traffic, several suburban malls have incorporated entertainment venues. There’s now a Cinemark movie theater at Spring Hill Mall in West Dundee, a Round One entertainment center at Fox Valley Mall in Aurora, an AMC Hawthorn 12 theater and a Dave & Buster’s at Hawthorn Mall, a Pinstripes near Oakbrook Center and Pac-Man Entertainment (formerly Level 257) at Woodfield.

With retailers everywhere struggling, the trend toward multiple uses in shopping malls continues. The hope is that multiple uses can attract people to the site who after eating might want to shop or who after seeing a movie might want to eat there and so on. (I think this then could lead to the issue of how many entertainment centers can make it in the suburbs but that is another problem to tackle later.)

One piece that is missing from these descriptions: adding residential units. This would likely require some zoning changes as the mall properties probably only allow commercial properties now. Furthermore, it could take some work to reintegrate the full property with the surrounding street grid (which likely includes residential units nearby). Having residents on site could address multiple problems facing suburbs: filling vacant space; providing round-the-clock customers; increased population growth which is an issue in many suburbs with no major land parcels left; and the possibility of having affordable housing. These residential units may not bring in as much money as stores and restaurants that add property and sales tax revenues but they could add life to stand-along properties.

Patterns in racial/ethnic change in Chicago area counties 2010-2018

Recently released Census data at the county level shows the shift toward larger non-white populations in the Chicago area:

The Chicago Tribune article also points out a few of the notable patterns:

The six suburban counties gained a total of 14,857 non-Hispanic black residents from 2010 to 2018, most of them in Will and DuPage, the new census data shows.

Cook County, meanwhile, lost 75,081 black residents over the same time period. Black residents’ share of the county population decreased the most of any racial group in the last eight years…

In each of the six suburbs surrounding Cook, non-white Asian residents grew by at least 13% since 2010. DuPage County grew by the most people, with an increase of 21,960 Asian residents in that time.

I’ll throw in three more patterns I see in the table:

  1. The further out counties, the more exurban locations (Kendall and McHenry Counties) have much higher proportions of white residents. It will be interesting to see how these change in the coming decades. Not only are those locations farther from Chicago, they also have fewer historic industrial suburbs (like Joliet in Will County and Elgin in Kane County) that attracted more non-white residents.
  2. In all of the six counties, Hispanics account for larger proportions of the overall population than black residents. Whether this translates into political representation or status within the region is debatable.
  3. The Asian population is more concentrated as a proportion in some counties – DuPage, Cook, and Lake – compared to others.

Publication on long-standing church buildings in the Chicago region

I recently had an article published in Visual Studies titled “Still Standing After All These Years: The Presence and Internet Presentation of Religious Buildings in the Chicago Area, 1936-2016.”

Here is the abstract:

Scholars have examined the changes in religious architecture over time but few have focused on the ongoing presence of religious buildings in communities nor how long-standing congregations interact with their older building. This study utilises two Internet data sources – Google Street View and the websites of religious congregations – to examine the fate and online presentation of the buildings of four Protestant denominations in the Chicago region from 1936 to today: Disciples of Christ, Lutheran Church-Missouri Synod, Presbyterian, and Seventh-day Adventist. The patterns found show the stability of many church buildings over eight decades and how they help anchor some religious groups – even though newer congregations use a number of these structures – yet congregations make unique choices about presenting their buildings through their website. These findings suggest religious buildings continue to influence their original religious congregations, newer groups using the building and neighbourhoods decades after they are constructed.

Addition to the abstract: we could use more research on how older religious buildings are used, celebrated, and renovated by their original religious congregations, new religious groups, and other organizations. Additionally, what do these long-standing buildings mean for their neighborhoods and communities, even if they are no longer utilized for religious purposes?

Two-thirds of Chicago area jobs in the suburbs

The demise of Sears and its suburban headquarters, once famously downtown in a building that was the tallest in the world, does not mean that suburban jobs are disappearing:

Sears’ move to northwest suburban Hoffman Estates symbolized a trend: The economic ascendance of Chicago’s suburbs, which even in the early 1990s accounted for more than 60 percent of the region’s jobs.

At first glance, that dominance appears to be slipping as companies like McDonald’s make headline-grabbing moves back to the city from leafy suburban campuses.

But it would be wrong to point to Sears’ latest struggles, which eased Wednesday when the company’s chairman won a bankruptcy auction that prevented a liquidation of Sears, and conclude that the suburbs are down and out.

People working in the suburbs still provide two out of every three Chicago-area jobs, according to data provided by regional planners.

While the emphasis of this article is on the suburban Sears campus, the suburban jobs numbers stuck out to me. There are (at least) two ways to interpret the number that two-thirds of the jobs in the Chicago region are in the suburbs:

  1. Of course the majority of jobs in the Chicago region are in the suburbs: more than two-thirds of the region’s population lives in the suburbs. All those residents both help generate nearby jobs with their various consumer needs (from retail to food to building and construction) and help fill those jobs.
  2. This is a surprising figure. Chicago is a leading global city; how could so many jobs be in the suburbs when what really matters in the region is the strength of the Loop and nearby neighborhoods? Plus, it would be better if employers started in the city or moved back to the city to help create a strong base for the region as well as take advantage of the city’s economies of scale (including mass transit access) and cultural opportunities.

These figures are part of a larger trend that I think is underappreciated in the rise of American suburbs: the suburbs are jobs centers, not just a collection of bedroom communities. While the stereotypical American suburb is a community of subdivisions with occasional businesses, the suburbs are full of companies and firms doing all sorts of things. And it has been this way for decades.