Why is Chicago so affordable?

[The Urban Politician]

In the midst of all this discussion, lets not forget that Chicago's cheaper prices can have its advantages, in a Fortune 500 sort of way:

Dover Chief Wants U.S. to Make Health-Care Decision

By Will Daley

Notable excerpt:

Dover’s relocation of its corporate offices to Downers Grove, a suburb of Chicago, from Manhattan should be complete by August. In addition to being closer to Dover factories, benefits include lower rent.

“The real-estate costs in the western suburbs of Chicago are rather significantly less than 280 Park Avenue or other locations around the U.S.,” Livingston said.

[Urbanight]

^ Yes. Chicago wears affordablility very well. I like that fact that across the street of my $1000 one-bedroom are million dollar townhouses. Every Chicago neighborhood may not be this way, and it is not solely unique to Chicago, but I'm really pleased by the fact that if I wanted to (and able to) I could spend my entire life on this one block. I can start with the cheap one-bedroom for a student, buy my first condo in the building next door as a young professional, and then retire in a million dollar townhouse across the street.

[simulcra]

Originally Posted by The Urban Politician

In the midst of all this discussion, lets not forget that Chicago's cheaper prices can have its advantages, in a Fortune 500 sort of way:

Dover Chief Wants U.S. to Make Health-Care Decision

By Will Daley

Notable excerpt:

Dover’s relocation of its corporate offices to Downers Grove, a suburb of Chicago, from Manhattan should be complete by August. In addition to being closer to Dover factories, benefits include lower rent.

“The real-estate costs in the western suburbs of Chicago are rather significantly less than 280 Park Avenue or other locations around the U.S.,” Livingston said.

I agree (I never said that high housing cost is an uncategorical plus), and second Urbanight. If I ever manage to find my way back to Chicago, I'll be ecstatic that I can get a decent home in a place like Roger's Park or Lincoln Park at half the cost for a smaller place in a worse neighborhood in Seattle.

[skyduster]

Originally Posted by Urbanight

^ Yes. Chicago wears affordablility very well. I like that fact that across the street of my $1000 one-bedroom are million dollar townhouses. Every Chicago neighborhood may not be this way, and it is not solely unique to Chicago, but I'm really pleased by the fact that if I wanted to (and able to) I could spend my entire life on this one block. I can start with the cheap one-bedroom for a student, buy my first condo in the building next door as a young professional, and then retire in a million dollar townhouse across the street.

While we still have a long way to go, Chicago has been pretty successful in pulling off this type of economically-diverse neighborhood in certain parts of the city. The first gentrification efforts in Chicago were failures in this aspect, because they completely pushed out the poor and created unaffordable neighborhoods (think Lincoln Park), and this type of urban renewal appears to have persisted through the 1990s. But the during the past decade, the city appears to have been more successful in urban renewal that results in economically-diverse districts. It's a very promising sign. My only qualm is that the process is too slow, as there are many areas that still need investment and attention, and this is not entirely the city's fault. But, yes, I'm in total agreement with you that a city should be able to provide expensive and affordable housing within the same district...aside from the huge economic and social benefits when different socioeconomic classes all live together, instead of being segregated.

Originally Posted by orulz

Hi,

I'm wondering. Why is Chicago so affordable compared to basically every other first-tier urban city in the US? New York, Boston, Washington, Los Angeles, Seattle, and San Francisco are examples of the cities that I would place as roughly in the same tier as Chicago as far as urbanity, size, and influence.

Interesting thread you've started here. I've read most of the posts, and there's a lot of really good guesses. Not that I know the answer, but I agree with the supply-demand argument, in combination with geographical factors. AmericanDirt also makes a very interesting argument [on page 1 of this thread] which falls within the supply-demand school of thought.

I do have to say that I wouldn't really include Seattle in the so-called "first-tier" category of American cities. I will include a couple big cities that you left out: Dallas-Ft Worth and Philadelphia. Dallas may not be the 3rd largest metro, but it's still a very large (and economically significant) metro -one of the top ten- that, like Chicago, doesn't really get much attention because of the "flyover" perception. Philly lives in NYC's shadow but is still a far larger metro than most people tend to think. New York is its own category of American cities, maybe like a first-tier plus. And then Los Angeles, Chicago, Washington, Dallas, Philadelphia, Boston, San Francisco.

Also, as Miracle Mile Man pointed out [on page 2 of this thread], there's also a number of smallish metropolitan areas with high housing prices, such as Manchester, NH, and Trenton, NJ, and Santa Barbara, CA [see here] and also mid-size metro areas such as San Diego and Seattle. All of these rank as more expensive than metro NYC according to Forbes. (Of course, the list also mentions Oxnard, CA, which I wouldn't really consider separate from Los Angeles, and San Jose which I wouldn't consider separate from San Francisco). I would hardly consider the San Diego, Trenton, and even Seattle metro areas as "first tier" American cities, yet for some reason, they have more expensive real estate.

[simulcra]

Dallas may not be the 3rd largest metro, but it's still a very large (and economically significant) metro -one of the top ten- that, like Chicago, doesn't really get much attention because of the "flyover" perception.

+1. As I briefly alluded to in one of my posts, even though it seems like a lot of Chicagoans fret about Houston eventually surpassing Chicago in terms of population, what's probably more likely and more significant is the fact that DFW will eventually surpass Chicagoland. Dallas itself may "only" have a million people, but the DFW metroplex has 6.3 million people, which places it at 4th in the US, with a much higher growth rate than Chicagoland's. So while Houston may eventually surpass Chicago in size, it's not going to be a significant as an economic shift as DFW surpassing Chicagoland. Chicago ignores DFW at its peril.

I do have to say that I wouldn't really include Seattle in the so-called "first-tier" category of American cities. I will include a couple big cities that you left out: Dallas-Ft Worth and Philadelphia.

+1 as well. We already have a better way of talking about 'first-tier' cities and that would be to include all Beta and higher rankings for "global cities". According to the wiki list, this includes NYC (which really is in a class of its own, along with London), Chicago (Alpha City-), LA, Atlanta, DC, SF (Beta Cities+), Dallas, Boston, Miami (Beta Cities), and Houston (Beta Cities-).

Given that list, it's probably actually not that surprising Chicago's relative affordability. Of those ten US cities, three are dirt-cheap affordable (Atlanta, Dallas, Houston), one is still cheaper than Chicago (Miami), another is allegedly on par (Boston), and the rest are more expensive (NYC is a huge upper tail for that). That actually puts Chicago fairly middle of the road when it comes to 'tier 1' cities - not exceptionally cheap, not exceptionally expensive.

EDIT - cost of living includes more than just housing prices. Chicago's housing prices are probably still way cheaper than a city like Boston's, but probably makes up for it through other costs, like transportation.

[Urbanight]

http://www.fivethirtyeight.com/2010/...eys-worth.html

Do Manhattanites Get Their Money's Worth?
by Nate Silver @ 6:30 AM

"Housing costs in New York appear to increase somewhat exponentially with increasing neighborhood desirability, whereas in the other city I've lived in as an adult (Chicago), they're fairly linear. In New York, the five most expensive neighborhoods are about 5x as expensive as the median neighborhood on a price-per-square-foot basis; in Chicago, the ratio is just 2:1. There might be any number of reasons for this, but I suspect that a lot of it has to do with the fact that in cities like Chicago that are even slightly less dense, if you want to pour more money into your home you can usually do so by getting a bigger home. In New York, the constrains on space are such that to a large extent, the only real variable you can permute is where you live, and the most desirable neighborhoods may be priced in at a super-premium."
_____________________________________________________________________

This is one of the reasons I thought Chicago is so affordable. When I think of the supply and demand argument I don't think of the entire city, I'm thinking about the most desirable neighborhoods. Unaffordableness (i'm making up words) starts in these neighborhoods and spread out.

Students can afford to live in the Gold Coast. The demand isn't there yet to price them out. There is still plenty of supply in the Gold Coast. I pointed out before, in the Gold Coast practically on the same corner three luxury highrise are under construction, or just finished (10 East Delaware, Elysian, and Walton on the Park).

The least affordable area in Chicagoland is probably the Northshore. There supply is an issue because everyone wants a house close or on the lake.

Chicago's afforability won't be in danger until the most desirable neighbors are exclusively for the wealthy.

[JBrisco]

Dude Chicago is waaaaay cheaper than Tampa.
Check this... A condo in Downtown Tampa was going for on average 300k.

Here's a fun fact about Downtown Tampa... There is no grocery store, or no clothing sores there. And the stores like CVS close up at 5. So all your left with is bars and restaurants.

[hellospank25]

Originally Posted by orulz

image hosted on flickr

That is outrageous (in a good way) I am so jealous
With that much money here you are lucky if you get a shoebox
the same size of a prison cell

Well now I know where to move if I am successful in the green card lottery

[Storm9]

Mind you the condo the OP linked is not located in an established neighborhood like Lakeview/Gold Coast. Yes its very close to the CBD but i think it would be boring to live there. Those are great prices which you wont see in the rest of Chicago where prices of similar size condos are 2x-3x more.

[hellospank25]

Originally Posted by Storm9

Mind you the condo the OP linked is not located in an established neighborhood like Lakeview/Gold Coast. Yes its very close to the CBD but i think it would be boring to live there. Those are great prices which you wont see in the rest of Chicago where prices of similar size condos are 2x-3x more.

look how gorgeous the inside is

[Aaron W]

^ Looks pretty sweet. Love those views. While the area doesn't offer the neighborhood feel that I enjoyed while living in East Lakeview and Lincoln Square, it does offer incredible transit access to get you easily wherever you'd like to go.

[hellospank25]

Originally Posted by Aaron W

^ Looks pretty sweet. Love those views. While the area doesn't offer the neighborhood feel that I enjoyed while living in East Lakeview and Lincoln Square, it does offer incredible transit access to get you easily wherever you'd like to go.

I am so in love with this apartment tower, i even dream about it at night

and what is the job situation like in Chicago? do they pay well for regular admin

jobs? and is it true that waiters in the USA make pretty good wages thanks

to tips?

[Northsider]

and is it true that waiters in the USA make pretty good wages thanks

to tips?

It definitely depends on location, restaurant, hours, etc. I would NOT bank on this for serious income. My sister waitressed at numerous places for over 10 years and made little more than minimum wage.

[simulcra]

Originally Posted by Northsider

It definitely depends on location, restaurant, hours, etc. I would NOT bank on this for serious income. My sister waitressed at numerous places for over 10 years and made little more than minimum wage.

If you're a career waiter, you can make a decent wage (like if you're waitstaffing at a place with a good wine selection and expensive entrees, think steakhouses), but you need a lot of good experience and due-paying to get that kind of gig. Otherwise, you might get stuck with a job that even teenagers shun for summer high school jobs and barely scrap together enough to make subsistence.

[Skyrazer]

Originally Posted by Storm9

Mind you the condo the OP linked is not located in an established neighborhood like Lakeview/Gold Coast. Yes its very close to the CBD but i think it would be boring to live there. Those are great prices which you wont see in the rest of Chicago where prices of similar size condos are 2x-3x more.

Still though, that's a brand new apartment in a location near the centre. I'm from Australia (and I think HelloSpank is as well?), and do you know how much you would pay for something equivalent in one of our cities? We're talking US500k+ for a 1 bedroom or even the 1mil mark for a 2-bedder.

Looking at Chicago condo prices on Trulia, I can almost afford to buy a decent one-bedroom outright, while here in small town Canberra, it gets me a 50% deposit on a dog-box built in the 80s. Go figure...

[Larry Siegel]

Originally Posted by tubeman85

is it possible to find a nice sized studio apartment in a decent neighborhood for less than $375k?

Ha...you can buy two of them. In a good neighborhood. Actually, there are not many studios for sale because most people can afford a one-bedroom.

Welcome to Chicago, where regular folks live rather well.

[bnk]

Originally Posted by Larry Siegel

Ha...you can buy two of them. In a good neighborhood. Actually, there are not many studios for sale because most people can afford a one-bedroom.

Welcome to Chicago, where regular folks live rather well.

I second this post and due to the down economy you should do well getting an apartment under 275k in a good area. BTW fight for free parking and you just might get it...


Best of luck..



bnk

[Skyrazer]

Chicago is about the only big world city anywhere that I know of that is still affordable. It's quite amazing how the city has managed it.

[TheKorean]

To rent a room in Chicago= 500 to 700 dollars per month, 300, 400 if looking hard enough

New York= 500, 600 is the minimum.

wow.

[urbanlife78]

Originally Posted by TheKorean

To rent a room in Chicago= 500 to 700 dollars per month, 300, 400 if looking hard enough

New York= 500, 600 is the minimum.

wow.

And that 500-700 gets you a room in a sweet apartment in a great neighborhood cause 700 can get you a good studio or possibly a 1 bedroom in a good neighborhood with a commute time that isn't that bad.