What private equity expects from suburban residential developments and “a revenue gap”

A new proposed residential development in suburban St. Charles sparked discussion about the possibility of including affordable housing:

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A 29-acre site in St. Charles — one of the last remaining open properties in town for residential development — is becoming a flashpoint for housing affordability in the city.

With a new proposal on the table, some city officials are requesting affordable units while the project’s developers argue it would hurt their private equity-backed bottom line…

The developers said they are trying to support retail along the Randall Road corridor by “attracting residents with disposable income.” City officials responded by saying there are people who work for the city who can’t afford to live there.

During the March 16 meeting, the developers said offering affordable units, such as a $1,070-per-month studio, would “provide a revenue gap.”

The basics of the story are not unusual for suburban residential development projects. A developer sees an opportunity. Upscale residential units can bring a good profit and upscale suburban communities tend to like residential properties that enhance their status and character. The city responds to the proposal with a few requests, including requesting some affordable housing units for several groups in the community the suburb would like to retain or attract. A period of negotiation or dialogue commences.

What is different here is that the developer has clearly stated that substituting affordable housing units will lead to a revenue problem. Why? Because there are expectations from the private equity supporting the development. The article does not discuss the details (and they may not be publicly available) but it sounds like it can be put another way: not enough money will be made on this development if affordable housing is included.

Profit-making is not unexpected. The clash between private equity money and affordable housing is less often in the public view. What amount or percentage does private equity expect to make on residential development? Can it make room for any affordable housing or is it completely about profit maximization?

Sports teams that are suburban franchises

Many major American sports teams have names referencing cities or states. Some of these teams are located in the suburbs while they refer to cities in their names. But I recently was thinking about teams that are intentionally suburban. Perhaps they never were located in the city (versus teams that started in cities but moved out later). Perhaps their name refers to a suburb or suburban area. These four teams came to mind:

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  1. Anaheim Ducks. They started in a large suburb in southern California and are still there today. Makes sense given that it is in the sprawling Los Angeles area?
  2. New Jersey Devils. Named after a state but this team has been in the suburbs of New York City (in the named state) for a number of years after an earlier homes in Kansas City and then Denver. Newark is also a large suburb but the state is largely caught between the big cities of New York City and Philadelphia.
  3. New York Islanders. Named after the state but located from the beginning in the Long Island suburbs (with a short time in Brooklyn in the 2010s).
  4. Arizona Cardinals. Since moving to this state, they played in Tempe and Glendale. (The team played in St. Louis and Chicago in their previous stops – they were a city team until they moved to a new region.)

On one hand, a few other teams might seem to fit this bill. Take the New England Patriots who play in the suburbs and whose name refers to a larger region. They were initially founded as the Boston Patriots. There might be others.

Two questions emerge from these quick thoughts:

  1. Was there something about hockey teams founded in the last 50 years that some aimed at suburban audiences moreso than other sports?
  2. Does being a major sports franchise in the suburbs or associated with the suburbs make a substantive difference to the team and its results? Given that more Americans live in suburbs than other settings, do these suburban locations tend to make it easier for residents of the region to attend?

Voter turnout in the Chicago suburbs slightly up or down last week

Voter turnout numbers in last week’s primary elections show limited change from previous years:

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Voter turnout Tuesday was greater than 2022’s midterm primary in suburban Cook, DuPage and Kane counties, but lower than four years ago in Lake, McHenry and Will counties…

DuPage County is currently reporting the highest turnout level at 24.6%, which could increase when mail-in stragglers are eventually reported. In the 2022 midterm primary, DuPage was the only county with more than 20% turnout among the suburban collar counties…

Lake County had the lowest voter turnout in the suburbs at 17.7% Tuesday. That’s down from 18.4% in 2022…

McHenry County is currently reporting 18% voter turnout, down from 19.6% in 2022. In Will County, turnout was 19.1% Tuesday, down slightly from 19.5% in 2022.

Most of the article tries to explain why these numbers are what they are. The underlying question seems to be this: have Americans eligible to vote lost interest in voting? About a fifth of suburban voters do so. What, if anything, would really change that number?

The apathy of suburban voters also matters because candidates will want their votes in numerous elections in November and in 2028. In plenty of states, suburbanites will determine elections because of the number of people who live in such places and the presence of both Democrats and Republicans.

Of course, in later races that are not really contested, these low turnout primary votes then set who will win the November election. To not vote in some primaries means voters will have limited choices in November.

Blood plasma centers showing up in wealthier suburbia

Suburban strip malls and office buildings now house more blood plasma centers:

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Every day, an estimated 215,000 people donate plasma, the yellowish liquid component of blood. Mr. Briseño is among them. He is not jobless or facing eviction, but, like many in the American middle class, he is caught in the vise of rising expenses and wages that aren’t growing fast enough to cover them. So he is turning to a method more commonly associated with the lowest-income Americans. For people like him, an extra $600 or so a month can mean making a mortgage payment or covering increased health-insurance costs.

While no one publishes statistics on the exact incomes of people who sell their blood plasma, the location of the centers suggests a shift toward a less financially desperate clientele. A recent study by researchers at Washington University in St. Louis and the University of Colorado, Boulder, observed that while older plasma centers are clustered in low-income areas, newer centers were increasingly likely to open in middle-class neighborhoods. A New York Times analysis shows the trend has continued: Centers have sprung up in more than 100 such neighborhoods, in suburbs and wealthier sections of cities, since researchers finished collecting their data in 2021…

For decades, plasma centers have been concentrated largely in impoverished and under-resourced neighborhoods and faced charges of exploitation. In her 2023 book, “Blood Money: The Story of Life, Death, and Profit Inside America’s Blood Industry,” Kathleen McLaughlin explored how plasma centers targeted, among others, laid-off autoworkers in the Rust Belt and communities along the U.S-Mexican border.

The article interprets the findings as even the people who made it to suburbia – often assumed in American society to be wealthier – also feel the financial need to donate plasma.

But I wonder if this is the best way to interpret this. Suburbia is much more complex and diverse than the images of white and wealthier bedroom suburbs in the postwar era. The era of a single earner supporting a growing suburban family is long gone. Across metropolitan regions, a variety of residents live with wealthier communities right next to working-class communities, places with lots of white collar jobs near places with manual labor and working-class jobs.

And what if this is not just about financial need. For Americans of different social classes, what do they see as moral or permissible to sell or do if they need money? What if the perceptions about selling plasma have changed more broadly in American society?

Or what if this is more about expanding markets. If there are already concentrations of plasma centers in lower-income neighborhoods, perhaps this is the next stage of finding more people to donate. The other areas are already saturated; this is a growing industry. The article says there are billions of dollars at stake in the industry.

I have not seen any local suburban concerns about this but I wonder if some communities or leaders or residents see plasma centers as a negative use of land in the kind of community they are in.

Fewer children born in the US affects one of the major reasons given for living in the suburbs

Multiple intertwined social forces created the American suburbs as we know them today. One factor involves raising children in the suburbs. The suburbs are perceived by many to be the best places to raise children due to their houses, yards, quieter environments compared to the city, good schools, and other amenities. And since Americans often want or expect their children to do better than themselves, the suburbs are the place in which they believe this happens.

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What happens if fewer children are born in the United States? This will not necessarily stop people from living in or wanting to live in the suburbs. But it could change their calculations about where to live or how to live in the suburbs. Some quick examples of how this might play out:

  1. Suburbs are built on the idea of growth: new subdivisions, new activity. If growth slows, communities have a different identity and have to draw on different revenue sources. With less growth, communities shift to maintenance or building in different ways (see #2).
  2. Suburbs have historically prioritized single-family homes as they provide space for nuclear families. But if fewer people need the space and yards of single-family homes (plus the issue of current prices), communities and developers will go for more townhouses and condos.
  3. There is a reduced need for schools. Education is often viewed in the United States as the tool for social advancement. Many suburbs take pride in their schools. Growing suburbs equaled more schools. But fewer kids in the community means fewer enrolled students.
  4. A suburban lifestyle built around kids’ activities and driving them around. The suburbs often require driving kids to school, sports, religious congregations, and more. The driving will not necessarily cease but the era of “Walmart moms” and “soccer moms” might diminish.

Many have complained that the streets of the suburbs are quieter than they used to be because kids are now inside or in organized activities. What if the suburban streets of the future (and schools and playgrounds and park districts and so on) are quiet because there are no kids living in suburbia?

Two quotes illustrating negative suburban responses to the idea of the state overriding local zoning

Some suburban officials expressed concern regarding Illinois Governor J.B. Pritzker’s suggestion that the State of Illinois should be able to override local zoning. Two quotes from a news story provide some of the justification for the suburban argument. Here is the first quote:

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“Zoning is one of the great protectors we have for investment,” he said. “Zoning is not (there) to exclude. Zoning is to protect.”

Suburbanites have invested money into their homes and zoning helps ensure property values increase/do not drop. Suburban residents like single-family homes, in part because of they view them as sources of wealth. They then can see many other land uses near these homes as threats to those values.

The second quote:

“Our local leaders are best positioned to craft solutions tailored to their residents’ needs,” he said.

Suburbanites also like local control. They can create zoning to prompt development that is consistent with what already exists in the community. They can spend local monies on what residents want. They have more control of local spending, rather than letting others further away spend their monies.

At the same time, do the efforts to protect and retain local control mean that suburban communities limit who might live in their community? Zoning for larger lots will tend to drive up housing values. Keeping zoning (and other matters) under local control means local officials can shape local options. If lots of suburban communities follow these logics, this can limit opportunities.

NFL teams leave cities for suburbs in search of more revenue and tax dollars

NFL teams keep their city names and go to the suburbs for more money:

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The Arlington Cowboys. East Rutherford Giants and Jets. Inglewood Rams and Chargers. And maybe the Hammond Bears.

Ten NFL teams don’t play in their namesake cities but in their suburbs. If the Chicago Bears go through with one of their proposals for a new stadium — Illinois Gov. JB Pritzker acknowledged Friday that the team’s next home is unlikely to rise within Chicago’s city limits — they could wind up in northwest suburban Arlington Heights or just across the Indiana border in Hammond.

But like other NFL teams, they have trademarked their name and would retain their city identity — along with their Chicago “C” and Bears head logos…

The move outside cities, analysts say, is driven largely by the desire for more money from new stadium revenues on larger, cheaper tracts of land, often closer to many season ticket holders, where teams can build surrounding entertainment districts with restaurants, hotels, retail and housing.

This is a classic suburban story: land outside the city is cheaper so a buyer can get more bang for their buck. This is the story often told about single-family homes: take the same home and lot and see the price to build it and buy it drop as you move out from the city through closer suburbs to outer suburbs.

With so much activity in the suburbs already, it is not like a new stadium is isolated. There are plenty of fans and businesses nearby. Americans are used to suburb-to-suburb commutes. The land that is cheaper in the suburbs can then appreciate in value and provide a big return for the football team.

And if suburban communities are willing to offer big tax breaks, this can generate even more revenue for the football teams. There can be a local or national bidding war where suburbs provide extra incentives beyond having cheaper land compared to cities.

Is there a strong counterargument for a football team to stay in a big city? Should they be loyal to the city? Can there land be even more valuable in the long run because of the demand for land in cities? At the moment, the primary thing cities might offer are big tax breaks.

People might get extra interested in these cases as football teams operate in the public eye and can bring together people across a region. But aren’t the teams just acting like all the other businesses that move locations, including going to the suburbs, so they can make more money?

Religion and a California suburb that is a “blue zone”

Loma Linda, California was designated as a “blue zone,” a place where people tend to live longer. This designation is connected to the religious history of some of the residents:

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In 2008, Loma Linda rocketed to the national stage when it was dubbed a “Blue Zone,” the term coined by author Dan Buettner to describe a place where people not only live longer but also live healthier lives. Nearly 20 years later, the California town of around 25,000 people still stands out rather oddly in its peer group, which includes beautiful international destinations like Okinawa, Japan; Sardinia, Italy; Nicoya Peninsula, Costa Rica; and Ikaria, Greece. All of them are set against mountains or sea, with residents who live a more traditional lifestyle…

The Blue Zone designation actually makes him a bit nervous, he said, and he doesn’t tout it often, since the data that the designation was based on is now rather old and was based solely on the Seventh-day Adventist part of the community. He said it’s been brought up among city officials as a way to promote the city, but members are often divided. 

Even Dr. Gary Fraser, whose research was the base for much of the Blue Zone status designation, told SFGATE that “the Loma Linda experience is totally irrelevant.” The research done was important, and the designation is significant, he said, but the overall study of longer living is more complicated and technical than it’s often presented, and it has more to do with Adventists than Loma Linda.

He said that when he began his research more than 40 years ago, it was helpful to be able to study Adventists because it helped level the playing field. Since most don’t smoke or drink and participate in similar, healthier lifestyle activities, researchers could analyze their diets more effectively and understand how that affected longevity. Fraser said, if anything, it points to the importance of studying how people eat, something he’s continuing to do today.

Another possible way to frame this story: American suburbs are often assumed to be similar. They are based around single-family homes, driving, and a particular lifestyle.

But leaders and residents within a community can often describe what makes their suburb different from other suburbs. We have this particular trait. There is this historical event that shapes who we are today. We are different from neighboring suburbs because of this.

The particular difference here is having a designation as a “blue zone.” And this seems related to a particular religious group in the community, Seventh-day Adventists. There is a Seventh-day Adventist university in the community that describes itself as having an emphasis on “health, science, and faith.” Not every suburb would have a concentration of this particular group that is a smaller conservative Protestant denomination.

So what helps distinguish Loma Linda from other suburbs near Riverside and Los Angeles? A concentration of particular Christians that is linked to longer life expectancy.

More Chicago suburbs now have majority-minority populations

Analysis from WBEZ shows more Chicago suburbs have a majority of nonwhite residents:

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Skokie is one of more than thirty Chicago-area suburbs that have shifted from majority-white communities to majority non-white ones in the past two decades, according to a WBEZ analysis of demographic data for nearly 300 suburbs in Cook County and the five collar counties from 2005 to 2024…

Between 2015 and 2024, 18 suburbs flipped from majority-white to majority non-white, up from 12 during the prior 10-year period spanning 2005 through 2014.

Many suburbs today are no longer the white, middle-class enclaves of the mid-20th century, said Willow Lung, an associate professor of urban studies and planning and director of the Small Business Anti-Displacement Network at the University of Maryland…

Overall, an increase of more than 600,000 nonwhite suburban residents over the last two decades completely offset the region’s loss of white suburban residents.

This is part of a nationwide trend where suburbs are increasingly diverse by race, ethnicity, and social class.

At the same time, the final paragraph cited above hints at another change; white suburbanites in the Chicago region leaving for elsewhere. What happens then in these suburbs as populations change? The article describes broad patterns but there are likely also interesting stories of what communities have become as their residents change. This could affect how a community sees itself, amid other possible reactions.

Will these patterns continue in the coming years in the Chicago region with more suburbs becoming majority non-white? And will white residents continue to leave for other suburbs or move out of the region all together? If both continue, how long until the image of “white, middle-class enclaves” of suburbia is no longer common?

Former suburban college campus to large youth sports facility

Add another redevelopment option for suburban communities: large parcels of land, like former college campuses – Trinity International in Bannockburn, Illinois in this example, can become youth sports sites:

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Now he has pivoted from that proposal to a larger one on the Trinity campus, which already includes about 60 acres of sports fields and facilities. Donato said he will run indoor youth sports leagues immediately at an existing Trinity athletic center, but will ultimately raze the building and replace it with an indoor sports complex as large as 400,000 square feet. That building would combine with adjacent outdoor athletic fields to create what he envisions as a destination for area youth sports leagues and camps.

The project — which is subject to approval from the Village of Bannockburn — stands to breathe new life into a large suburban property that has been underutilized since Trinity closed in-person undergraduate programs there in 2023. The religious school announced in April that it would vacate the property entirely after the 2025-26 school year, adding it to the list of sprawling suburban properties in need of revitalization following the COVID-19 pandemic.

Donato said his planned indoor complex would include a professional-size soccer field, a gym with eight basketball courts and a portion of the building with “kids-oriented” activities such as bowling, miniature golf, an arcade, a restaurant and other attractions that could host as many as 5,000 kids on a given weekend. A portion of the existing grass field area would be converted into artificial turf fields.

As the college was shutting down there was one other redevelopment option that fell through:

Trinity had been working on a deal in 2024 to sell its campus to Dallas-based developer Hillwood, which publicly shared plans at the time to turn the site into a biotechnology and pharmaceutical research and technology park. A unit of Takeda Pharmaceuticals operates out of a building next to the campus along Lakeside Drive.

The option in the last paragraph is one that many suburbs would like: research and technology jobs in suburban offices. These are good jobs with high status companies.

Youth sports facilities are something else. They are part of a growing industry. (College and universities may be going the other way.) Suburban families and kids can have a lot of interest in sports. Such a facility can provide options for year-round activity.

And perhaps key to this: the youth sports facilities can generate revenue. Tax monies. Companies will be interested. Training kids in sports and providing sports entertainment can involve a lot of money.

A change in property status could bring out objections from neighbors. People get used to being near a college, now that property could become something else. But suburbanites like the idea that their kids are going to get ahead, suburban communities do not like vacant properties, and Americans like sports. And there is money to be made…