Tag Archives: Chicago region

Want more Chicago area mass transit? Have to find more tax dollars

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More mass transit may be good for the Chicago region but it will cost taxpayers:

A coalition of transportation advocates supported by Chicago Mayor Rahm Emanuel and Cook County President Toni Preckwinkle has recommended raising new tax money in Cook County to help pay for billions of dollars of mass transit improvements…

In a meeting with the Tribune’s editorial board, coalition leaders said that the board could potentially raise property, sales, or gasoline taxes for the local share. The money would help pay for such big-ticket projects in Chicago and Cook County as the long-sought extension of the CTA’s Red Line to the far South Side.

The Red Line extension and other billion-dollar projects like suburb-to-suburb Metra STAR Line have languished in recent years because federal funding for major transit endeavors has all but disappeared…

The coalition’s campaign comes on the heels of a Northeastern Illinois Public Transit Task Force report released Monday which concluded that current funding levels are insufficient to maintain current service, much less expand it.

I suspect it will be difficult to raise such funds when there are plenty of other needs for money in Chicago and Illinois. At the same time, I have little doubt that there are a number of mass transit projects that would be helpful in the Chicago area. Such projects could help limit road traffic, provide needed transportation options to places where driving cars (a relatively expensive task) is not as viable, and even potentially spur development around new mass transit options. But, the short-term cost is quite high.

The past importance of movie theaters to suburban downtowns and the difficulty of reviving them today

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The downtown movie theater was once an important part of suburbs but a number of these theaters have been difficult to revive in recent years:

Theater stories abound in the suburbs. The lavishly restored Paramount Theater in Aurora offers Broadway plays and big-name musical acts. The Arcada Theatre in St. Charles is another success story. Others — including the Wheaton Grand, Des Plaines Theater and Clearwater Theater in West Dundee — face uncertain futures after opening and closing multiple times in recent years…

Main Street theaters became popular in the late 1920s, when film was just emerging, Fosbrink said. Their construction boomed through the late 1930s and 1940s, particularly as suburbs took hold.

“Planning to have a theater in your town, or an opera house or something (for entertainment) was just as important as planning a city hall or fire station,” he said…

“People at this point in time are paying a lot more attention to how a theater can be a catalyst for economic development in a downtown business district,” Fosbrink said. “Theaters really can drive economic development, and we see a lot of that happening all over the country.”

Once a status symbol and source of local entertainment, these theaters are now possible ways to attract more people to a suburban downtown and hope they spend more money while they are there. Even though they aren’t really needed now (even the multiplexes have had a difficult time in recent years), they might anchor new entertainment districts where suburbanites don’t go to the city for culture but instead stay nearby.

It would be interesting to think about how many of these downtown theaters the Chicago suburbs could support. Particularly if they hope to all thrive, how much money is there to spread around?

In first half of 2013, roughly 20% of Chicago area home purchases by institutional investors

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A good portion of the homebuying activity in the Chicago region during the first half of 2013 was driven by institutional investors:

Chicago home prices climbed 11 percent in November from a year earlier, the biggest jump in almost a quarter century, according to S&P/Case-Shiller data. While gains are slowing across the country, the Windy City was one of nine areas in the group’s 20-city index to show a year-over-year increase in housing values…

Institutional investors, led by companies such as Blackstone’s Invitation Homes and American Homes 4 Rent (AMH), have bought as many as 200,000 U.S. properties in the last two years, taking advantage of real estate prices that fell as much as a third from the 2006 peak, and rising demand for rentals among Americans who lost their houses in the foreclosure crisis. Their reach has stretched from the hard-hit regions of California to small Ohio towns to the sprawling suburbs of Atlanta…

In Chicago, investors accounted for about 20 percent of purchases in the first half of last year, according to Geoff Smith, executive director of the Institute for Housing Studies at DePaul University in Chicago.

Like the portfolios of other investors, Invitation Homes’ Chicago-area holdings are mostly filled with properties in suburbs such as Barrington and Oak Park. The smattering of houses they own in the city itself is evidence that the rebound is starting to broaden. Even in some neighborhoods where prices fell more than the rest of Chicago during the foreclosure crisis, values are climbing.

The average homeowner may not pay much attention to this because at least their home values are increasing again. The Chicago area housing market has been sluggish and local media has made much of the uptick in home prices. Additionally, these investors are filling a void in the market.

But, this could lead to more questions in the long run.

1. What will these institutional investors do with these properties years down the road?

2. What happens when the Chicago market is no longer profitable for these institutional investors?

3. Does this mean that the average homebuyer has a better chance to buy a home or does this simply concentrate buying power in the hands of the already wealthy? In other words, this may not provide more affordable housing.

4. Since communities, particularly suburbs, tend to think homeowners are better community members than renters, is it a problem when so many homes are purchased with the intention of having more renters?

Substantial “transit deserts” in the Chicago region

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A new report is critical of the state of mass transit in the Chicago metropolitan region:

Even major suburban job centers, such as the bustling I-90 Corridor from O’Hare to Schaumburg; the crowded Oak Brook area and booming Naperville, “are not well-served by transit,” and most jobs in the region cannot be reached in even a 90-minute commute, the analysis found.

The current system stands no chance of meeting the goal of doubling transit use by 2040 and “must be refocused with customer satisfaction as the primary objective,” according to the draft report prepared for the Northeastern Illinois Transit Task Force.

At the same time, there is little coordination of planning between the CTA, Metra and Pace, the report says.

The 15-member task force was created by Gov. Pat Quinn last August to reform the transit system after the controversy erupted over the awarding of ousted Metra CEO Alex Clifford a severance package potentially worth $817,000.

A few quick thoughts:

1. I like this term “transit deserts.” It implies that mass transit is a public good that many or all residents should be able to access.

2. Coordination across these transit groups would be helpful. But, this is a legacy of Illinois’ penchant for multiple government bodies. What is the motivation for each group to work together – and possibly sacrifice something – when they don’t have to and have separate pots of money?

3. The overall issue is also a legacy of the region’s development along railroad lines that radiated out of the city. The first railroad was constructed in the late 1840s and by the 1860s there was a strong network of rail connections. You can see this on the Metra System Map today. While this system was good for funneling people and goods back and forth from Chicago (a hub and spoke model with Chicago as the hub), it doesn’t provide connections across suburbs. This sort of intra-suburb infrastructure was not built when suburban development picked up in the early to mid 1900s and the opportunity was lost. Occasional plans still float around: see the Metra Star Line that would connect three major job centers, Aurora, Naperville, and Hoffman Estates, and O’Hare along a beltway rail line.

4. The major goal of “customer satisfaction” sounds interesting. While I don’t know what other goals were considered, it can take significant efforts to get suburbanites to warm up to the idea of mass transit. It might mean wealthier suburbanites give up driving, a task that can be onerous in Chicago traffic but an option that provides more perceived independence. It might mean suburban communities have to deal with more rail traffic – this has been an issue in past years with using the tracks that the Metra Star Line would run on – which means more delays for at-grade crossings (of which the Chicago region has many). It means making trains and buses and other options both convenient, comfortable, and relatively cheap, a difficult task in sprawling suburbs.

New tool from HUD to estimate combined commuting and housing costs

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Opponents of sprawl argue too many people buy cheaper homes further from the city without considering the added transportation costs. Here is a new tool to help address this issue:

More than 3 in 4 home buyers polled in the National Assn. of Realtors’ latest Profile of Home Buyers and Sellers said commuting costs are either “very” or “somewhat” important to their ultimate purchase decisions. After all, the combined cost of housing and transportation consumes close to half of the typical working family’s monthly budget…

The Location Affordability Portal from the Housing and Urban Development Department and Transportation Department enables users to estimate the combined housing and transportation costs for a specific region, neighborhood and even street.

LAP is actually two tools: one, a map-based Location Affordability Index, is a database that predicts annual housing and transportation costs for a particular area. The other, My Transportation Cost Calculator, enables users to customize data for their own household and potential residential locations.

LAP includes diverse household profiles — which vary by income, size and number of commuters — and shows the affordability landscape for each one across an entire region. It was designed to help renters and homeowners — plus planners, policymakers, developers and researchers — get a more complete understanding of the costs of living in a location given the differences between households, neighborhoods and regions, all of which affect affordability. The data covers 94% of the U.S. population.

Use the tool here. Some good info here. I plugged in some quick numbers of our housing and transportation costs and the yearly transportation costs were about 57% of annual housing costs. Driving, even with commutes that aren’t that far, add up quickly. Here is what the Location Affordability Index looks like for much of the Chicago region:

LocationAffordabilityPortalChicagoArea2

On this map with combined housing and transportation costs, I feel like you can quickly see places where the housing is more expensive (some places on the North Shore) and other places where transportation costs are higher (and where there may be fewer jobs – Will County, western DuPage County).

The idea here is that more people need more information about commuting costs when making housing decisions. If they had the commuting costs, they would choose differently. For how many people would this be true? I suspect some Americans would place more emphasis on a cheaper house, even if the commuting costs are higher. In other words, these aren’t equal considerations when Americans, particularly of certain incomes, have to make a choice.

Big companies buying up hundreds of Chicago area homes

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In a sign of the post-Great Recession real estate market, big firms are buying up Chicago area real estate:

The Chicago market is vast enough that even an invasion of this size won’t change home prices overnight. But the frenzied activity is a clear sign that professional investors believe two important trends are ripe for opportunity: housing values are recovering, and many Americans have given up on the dream of homeownership and will become renters…

Three years ago in an opinion piece for the Tribune, Matthew Desmond, then a sociology department fellow at the University of Wisconsin, voiced worries about what he predicted would be a concentration of housing stock among a few owners, causing big landlords to get bigger and smaller landlords to fall by the wayside. He called it the “Wal-Martization of urban housing.”

On one hand, this represents a change in the Chicago market as firms look to buy homes, rent them, and possibly make more money down the road when prices rise again. On the other hand, the percent of units these bigger firms are buying is not huge yet.

Desmond’s comments are interesting. Why shouldn’t real estate and housing operate in a market space where corporations can get involved? We have few problems with this in retail so what is the problem in housing? Desmond and others might argue that housing is a more basic need – though American residents do not have an explicit right to it. Also, there is a long-standing ideology in the United States that residents should have choices among places to live and homeownership, determining the fate of one’s own property, is the end goal rather than having to be subservient to a corporate landlord.

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”?

As Chicago area home prices rise, housing affordability drops

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Affordable housing is a persistent issue in the Chicago region – and the percent of affordable homes has dropped in the last four quarters:

Housing affordability in the Chicago area just took its biggest quarterly tumble since early 2005.

During the year’s third quarter, 63.7 percent of all new and existing homes sold in the area were affordable to families earning the area median income of $73,400, according to the most recent National Association of Home Builders/Wells Fargo home affordability index.

The index put the median home price in the Chicago area at $210,000.

That compares with the 70.6 percent of homes being considered affordable during the second quarter. It was the fourth consecutive quarterly slip in local affordability. This latest decline was the most dramatic since the change recorded from the first to second quarters of 2005.

While this is a shift as home prices rise, it is a reminder of the bigger issue: the Chicago area has a long-term problem with affordable housing. This is the case in the city of Chicago as well as suburban areas. This isn’t just an issue of people being able to find decent housing; it is related to businesses being able to find workers (who don’t have to travel ridiculous distances from housing they can afford), people being able to access good school districts (which are often related to higher housing values), and whether there is continued residential segregation where those of certain racial and ethnic groups can’t live in certain areas.

Persistent homelessness in the Chicago suburbs shouldn’t be a surprise

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Homelessness is an ongoing concern for Chicago suburbs:

Advocates say her story reflects an ongoing dilemma for those working to end homelessness. The problem often is dismissed as an urban one, but thousands of homeless people seek emergency overnight shelter across Chicago’s suburbs each year. In DuPage County, nearly three-quarters of the homeless are from the county, officials said.

Although the number of people served by homeless support agency DuPage Pads has remained steady at about 1,400 people for the past three years, officials counted an additional 29 people who refused shelter this year in favor of sleeping in parks, building entryways and other public areas, said Carol Simler, executive director for the agency.

Many of these homeless people are affected by mental illness, substance abuse or debilitating health conditions. Yet stringent suburban law enforcement — which keeps homeless people from congregating or loitering — coupled with an increase in foreclosed buildings in some areas make the fringe group difficult to reach, advocates say…

In Lake County, 2,000 people receive assistance or shelter from PADS Lake County each year. Officials estimate that an additional 200 choose to sleep outdoors — a group that can be elusive, said Joel Williams, executive director of PADS Lake County.

A few thoughts:

1. Homelessness in the suburbs might be even more pernicious for those without a home because it is harder to access local services or they are less present. As this article notes, there are several organizations in the Chicago suburbs tackling the issue and the PADS organizations in DuPage and Lake County take advantage of the Metra lines or busing, respectively.

2. It shouldn’t be surprising in 2013 to see “urban” issues in suburban areas. For example, the number of people in poverty in the suburbs now exceeds the number in poverty in big cities. Or, see the recent set of articles in the Chicago area about an uptick in heroin usage in the suburbs. Yet, it is still common to see articles like this or reactions from suburbanites that say things like, “isn’t it strange to see urban issues in the suburbs?” It could be that there are still suburbanites who aren’t expecting these issues or who intentionally moved to the suburbs to get away from such concerns. Yet, I also wonder if this isn’t really code for something: this is really more concern in wealthier suburbs who would like to keep these sorts of troubles far from their borders.

Who pays in and receives tax money for transit in the Chicago metropolitan region

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Amidst the fight over tax dollars for mass transit in the Chicago region, here is a breakdown of where the tax money comes from and who gets to spend it:

Metra, the CTA and Pace receive around half of their operating revenues from fares, but most of the remainder comes from sales taxes. It’s calculated using unbelievably complicated state formulas that incorporate geography into divvying up the spoils. However, a 2008 state law change raising the sales tax left the disposal of some of the money up to the Regional Transportation Authority. That’s meant power struggles the last two years.

A look at 2012 sales tax dollars received by the RTA shows that 27.5 percent of that revenue derives from Chicago. The biggest chunk, or 50 percent, comes from suburban Cook County. Elsewhere, DuPage County contributed 8.6 percent, Lake 5 percent, Will about 4 percent, Kane about 3 percent and McHenry not quite 2 percent.

There are two different ways to interpret those numbers. Cook County, including Chicago, delivers 77 percent of transit funding. Or — the suburbs combined provide 72 percent of transit funding compared to Chicago.

In terms of revenue going out in 2014, the CTA will get $661 million in operating funds from the RTA, Metra receives $365.4 million, and Pace $151.6 million. When you cut up that pie, it’s 56 percent CTA, 31 percent Metra and 13 percent Pace.

So it sounds like complaints from DuPage County about the money they are contributing is a smaller slice of the pie overall – it is suburban Cook County that is chipping in the most.

Another issue: suburbanites might complain that they are not getting in return the money they put in but isn’t more expensive to run good mass transit in the spread-out suburbs? In other words, if the collar counties wanted mass transit similar to that of Chicago, wouldn’t it cost more from everyone?