Why is Chicago so affordable?

[urbanpln]

Originally Posted by WI_1982

Chicago has the fifth largest economy in the U.S. (behind, in order, NYC, LA, DC, and SF).

There's no way it has the third largest economy in the world. It's probably Top 15 globally, which would, by most measures, make it an "alpha" city.

Actually, you are both wrong. It has the 3rd largest economy in the U.S.. Its GRP is approximately $500 billion placing it behind NYC and L.A.. If it were a region it would have the 20th largest economy in the world.

[iloveclassicrock7]

Actually you guys are both wrong. Read this - http://www.theatlanticcities.com/job...ies-world/109/

If you look at economic output it has a higher output then London, but is 4th on the list

[prelude91]

Originally Posted by iloveclassicrock7

Actually you guys are both wrong. Read this - http://www.theatlanticcities.com/job...ies-world/109/

If you look at economic output it has a higher output then London, but is 4th on the list

Quoting some website doesn't make you 100% right. There are different ways of measuring economic output.

This from the BEA, economic output by CSA:

http://bea.gov/newsreleases/regional...dpma_0211b.png


1. New York-Newark-Bridgeport, NY-NJ-CT-PA CSA $1.460 Trillion
Bridgeport-Stamford-Norwalk, CT Metro Area $84,882
Kingston, NY Metro Area $4,755
New Haven-Milford, CT Metro Area $40,844
New York-Northern New Jersey-Long Island, NY-NJ-PA Metro Area $1,280,517
Poughkeepsie-Newburgh-Middletown, NY Metro Area $22,440
Torrington, CT Micro Area
Trenton-Ewing, NJ Metro Area $26.680

2. Los Angeles-Long Beach-Riverside, CA CSA $881.297 Billion
Los Angeles-Long Beach-Santa Ana, CA Metro Area $735,743
Oxnard-Thousand Oaks-Ventura, CA Metro Area $35,736
Riverside-San Bernardino-Ontario, CA Metro Area $109,818

3. Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA $575.025 Billion
Baltimore-Towson, MD Metro Area
Lexington Park, MD Micro Area $144,789
Washington-Arlington-Alexandria, DC-VA-MD-WV Metro Area $425,167
Winchester, VA-WV Metro Area $5,069

4. San Jose-San Francisco-Oakland, CA CSA $544.969 Billion
Napa, CA Metro Area $7,015
San Francisco-Oakland-Fremont, CA Metro Area $325,927
San Jose-Sunnyvale-Santa Clara, CA Metro Area $168,517
Santa Cruz-Watsonville, CA Metro Area $9,697
Santa Rosa-Petaluma, CA Metro Area $19,888
Vallejo-Fairfield, CA Metro Area $13,925

5. Chicago-Naperville-Michigan City, IL-IN-WI CSA $539.046 Billion
Chicago-Naperville-Joliet, IL-IN-WI Metro Area $532,331
Kankakee-Bradley, IL Metro Area $3,150
Michigan City-La Porte, IN Metro Area $3,565

6. Boston-Worcester-Manchester, MA-RI-NH CSA $430.245 Billion
Boston-Cambridge-Quincy, MA-NH Metro Area $313,690
Concord, NH Micro Area
Manchester-Nashua, NH Metro Area $20,988
Providence-New Bedford-Fall River, RI-MA Metro Area $66,334
Worcester, MA Metro Area $29,233

7. Houston-Baytown-Huntsville, TX CSA $384.603 Billion
Houston-Sugar Land-Baytown, TX Metro Area $384,603

8. Dallas-Fort Worth, TX CSA $377.546 Billion
Athens, TX Micro Area
Dallas-Fort Worth-Arlington, TX Metro Area $374,081
Sherman-Denison, TX Metro Area $3,465

9. Philadelphia-Camden-Vineland, PA-NJ-DE-MD CSA $366.792 Billion
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area $346,932
Reading, PA Metro Area $14,876
Vineland-Millville-Bridgeton, NJ Metro Area $4,984

10. Atlanta-Sandy Springs-Gainesville, GA-AL $278.805 Billion
Atlanta-Sandy Springs-Marietta, GA Metro Area $272,362
Gainesville, GA Metro Area $6,443

11. Miami-Ft Lauderdale-Pompano Beach, FL Metro Area $257.560 Billion

12. Seattle-Tacoma-Olympia, WA CSA $254.393 Billion
Bremerton-Silverdale, WA Metro Area $8,860
Mount Vernon-Anacortes, WA Metro Area $5,469
Oak Harbor, WA Micro Area
Olympia, WA Metro Area $8,843
Seattle-Tacoma-Bellevue, WA Metro Area $231,221

13. Detroit-Warren-Flint, MI CSA $231.571 Billion
Ann Arbor, MI Metro Area $18,566
Detroit-Warren-Livonia, MI Metro Area $197,773
Flint, MI Metro Area $11,511
Monroe, MI Metro Area $3,721

14. Minneapolis-St Paul-St Cloud, MN-WI CSA $207.052 Billion
Minneapolis-St Paul-Bloomington, MN-WI Metro Area $199,596
St Cloud, MN Metro Area $7,456

15. Phoenix-Mesa-Scottsdale, AZ Metro Area $190.601 Billion

16. Denver-Aurora-Boulder, CO CSA $183.206 Billion
Boulder, CO Metro Area $18,298
Denver-Aurora, CO Metro Area $157,567
Greeley, CO Metro Area $7,341

17. San Diego-Carlsbad-San Marcos, CA Metro Area $171.568 Billion


News Release: GDP by Metropolitan Area, Advance 2010, and Revised 2007–2009

There are also revisions for 2009 which show lower GDPs than previously released, the economy was just worse than thought.

[tpe]

Originally Posted by prelude91

There are different ways of measuring economic output.

Which makes the current digression from the main topic a rather tiresome exercise: one sees what one likes to believe.

[iloveclassicrock7]

Originally Posted by prelude91

Quoting some website doesn't make you 100% right. There are different ways of measuring economic output.

This from the BEA, economic output by CSA:

http://bea.gov/newsreleases/regional...dpma_0211b.png


1. New York-Newark-Bridgeport, NY-NJ-CT-PA CSA $1.460 Trillion
Bridgeport-Stamford-Norwalk, CT Metro Area $84,882
Kingston, NY Metro Area $4,755
New Haven-Milford, CT Metro Area $40,844
New York-Northern New Jersey-Long Island, NY-NJ-PA Metro Area $1,280,517
Poughkeepsie-Newburgh-Middletown, NY Metro Area $22,440
Torrington, CT Micro Area
Trenton-Ewing, NJ Metro Area $26.680

2. Los Angeles-Long Beach-Riverside, CA CSA $881.297 Billion
Los Angeles-Long Beach-Santa Ana, CA Metro Area $735,743
Oxnard-Thousand Oaks-Ventura, CA Metro Area $35,736
Riverside-San Bernardino-Ontario, CA Metro Area $109,818

3. Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA $575.025 Billion
Baltimore-Towson, MD Metro Area
Lexington Park, MD Micro Area $144,789
Washington-Arlington-Alexandria, DC-VA-MD-WV Metro Area $425,167
Winchester, VA-WV Metro Area $5,069

4. San Jose-San Francisco-Oakland, CA CSA $544.969 Billion
Napa, CA Metro Area $7,015
San Francisco-Oakland-Fremont, CA Metro Area $325,927
San Jose-Sunnyvale-Santa Clara, CA Metro Area $168,517
Santa Cruz-Watsonville, CA Metro Area $9,697
Santa Rosa-Petaluma, CA Metro Area $19,888
Vallejo-Fairfield, CA Metro Area $13,925

5. Chicago-Naperville-Michigan City, IL-IN-WI CSA $539.046 Billion
Chicago-Naperville-Joliet, IL-IN-WI Metro Area $532,331
Kankakee-Bradley, IL Metro Area $3,150
Michigan City-La Porte, IN Metro Area $3,565

6. Boston-Worcester-Manchester, MA-RI-NH CSA $430.245 Billion
Boston-Cambridge-Quincy, MA-NH Metro Area $313,690
Concord, NH Micro Area
Manchester-Nashua, NH Metro Area $20,988
Providence-New Bedford-Fall River, RI-MA Metro Area $66,334
Worcester, MA Metro Area $29,233

7. Houston-Baytown-Huntsville, TX CSA $384.603 Billion
Houston-Sugar Land-Baytown, TX Metro Area $384,603

8. Dallas-Fort Worth, TX CSA $377.546 Billion
Athens, TX Micro Area
Dallas-Fort Worth-Arlington, TX Metro Area $374,081
Sherman-Denison, TX Metro Area $3,465

9. Philadelphia-Camden-Vineland, PA-NJ-DE-MD CSA $366.792 Billion
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area $346,932
Reading, PA Metro Area $14,876
Vineland-Millville-Bridgeton, NJ Metro Area $4,984

10. Atlanta-Sandy Springs-Gainesville, GA-AL $278.805 Billion
Atlanta-Sandy Springs-Marietta, GA Metro Area $272,362
Gainesville, GA Metro Area $6,443

11. Miami-Ft Lauderdale-Pompano Beach, FL Metro Area $257.560 Billion

12. Seattle-Tacoma-Olympia, WA CSA $254.393 Billion
Bremerton-Silverdale, WA Metro Area $8,860
Mount Vernon-Anacortes, WA Metro Area $5,469
Oak Harbor, WA Micro Area
Olympia, WA Metro Area $8,843
Seattle-Tacoma-Bellevue, WA Metro Area $231,221

13. Detroit-Warren-Flint, MI CSA $231.571 Billion
Ann Arbor, MI Metro Area $18,566
Detroit-Warren-Livonia, MI Metro Area $197,773
Flint, MI Metro Area $11,511
Monroe, MI Metro Area $3,721

14. Minneapolis-St Paul-St Cloud, MN-WI CSA $207.052 Billion
Minneapolis-St Paul-Bloomington, MN-WI Metro Area $199,596
St Cloud, MN Metro Area $7,456

15. Phoenix-Mesa-Scottsdale, AZ Metro Area $190.601 Billion

16. Denver-Aurora-Boulder, CO CSA $183.206 Billion
Boulder, CO Metro Area $18,298
Denver-Aurora, CO Metro Area $157,567
Greeley, CO Metro Area $7,341

17. San Diego-Carlsbad-San Marcos, CA Metro Area $171.568 Billion


News Release: GDP by Metropolitan Area, Advance 2010, and Revised 2007–2009

There are also revisions for 2009 which show lower GDPs than previously released, the economy was just worse than thought.

The link I posted is a known site that ranks cities by their economic power, so it is a great thing to go by. I know that their are different ways to rank the economy, but this one combines them all. So it is a great source.

[chicagogeorge]

I knew that Washington Baltimore passed Chicago up in GMP, but I didn't realize the Bay Area did as well

[Xusein]

Saw this on the front page. I remember when I visited Chicago last summer, I saw ads for 1BR, may have been studios, condos near the Sears (oh, I mean Willis) Tower selling for $160K. That is pretty cheap considering the location, you would never see this in NYC or Boston.

[iloveclassicrock7]

Originally Posted by chicagogeorge

I knew that Washington Baltimore passed Chicago up in GMP, but I didn't realize the Bay Area did as well

Yeah, what is that list exactly ? I am not trying to lie about anything here, just saying what I think the facts are.

After further research, Chicago actually has the 4th highest GDP in the world, but is considered the 4th most important city, ahead of LA

Here are some things that explain it

http://www.theatlanticcities.com/job...l-cities/1904/

http://www.theatlanticcities.com/job...ld/109/#slide4

http://www.foreignpolicy.com/node/373401

[The Urban Politician]

One reason Chicago is so affordable (rental-wise):

A lot of buildings, even in gentrified or gentrifying areas, are full of long term tenants paying lower rents from yesteryear.

And as long as they are paying and the landlord is making ends meet, why change anything?

Given this 'inertia', I think it can probably take a long time for rents to rise in a given existing neighborhood, even after gentrification has begun. Places like New York probably gentrified earlier (and to a greater degree) than Chicago, hence that would explain some of the difference.

Think about it, even if you are a new landlord who buys a building in a gentrifying area, and there are long term tenants. You can't simply walk in and hike up the rents right away. You have a mortgage and bills to pay, and if your tenants give you a hard time and you are forced to evict them, you could be in a world of hurt. You have to slowly increase the rent, and one by one tenants will either move out or play hard ball and make you evict them. Then you have to fix up the apartments to higher standards, and finally you can then rent them out at a higher rate.

One by one, building by building, I can easily see this process taking years.

[prelude91]

Originally Posted by The Urban Politician

One reason Chicago is so affordable (rental-wise):

A lot of buildings, even in gentrified or gentrifying areas, are full of long term tenants paying lower rents from yesteryear.

And as long as they are paying and the landlord is making ends meet, why change anything?

Given this 'inertia', I think it can probably take a long time for rents to rise in a given existing neighborhood, even after gentrification has begun. Places like New York probably gentrified earlier (and to a greater degree) than Chicago, hence that would explain some of the difference.

Think about it, even if you are a new landlord who buys a building in a gentrifying area, and there are long term tenants. You can't simply walk in and hike up the rents right away. You have a mortgage and bills to pay, and if your tenants give you a hard time and you are forced to evict them, you could be in a world of hurt. You have to slowly increase the rent, and one by one tenants will either move out or play hard ball and make you evict them. Then you have to fix up the apartments to higher standards, and finally you can then rent them out at a higher rate.

One by one, building by building, I can easily see this process taking years.

This doesn't really make sense, and in theory could make "on the market apartments" more expensive. Think about it, If there is an inventory shortage due to long time residents not moving, rental rates should increase. Until recently, I owned a 3 flat on Eddy and Racine (lakeview), and a recently updated 3 bed 1.5 bath unit would typically rent for $2,500 per month. I currently live in Bethesda, MD and my 800 sq ft 1 bedroom rents for $2450 per month. I can rent a 1 bed in river north for 1200-1400 per month.
I don't know why Chicago is so affordable compared to other top tier cities but its not because of long time residents paying less than market rate.

[The Urban Politician]

Originally Posted by prelude91

This doesn't really make sense, and in theory could make "on the market apartments" more expensive. Think about it, If there is an inventory shortage due to long time residents not moving, rental rates should increase. Until recently, I owned a 3 flat on Eddy and Racine (lakeview), and a recently updated 3 bed 1.5 bath unit would typically rent for $2,500 per month. I currently live in Bethesda, MD and my 800 sq ft 1 bedroom rents for $2450 per month. I can rent a 1 bed in river north for 1200-1400 per month.
I don't know why Chicago is so affordable compared to other top tier cities but its not because of long time residents paying less than market rate.

^ If you look at the inventory of rental properties throughout Chicago's neighborhoods that aren't quite as gentrified as Lakeview (bad example on your part, since Lakeview has been established for quite a while) you will find many buildings which house tenants who have been there for years, but have been paying below market value. This is because the landlords may not be interested or even capable of making the capital improvements to their units in order to attract the higher caliber tenant. I have seen many, many examples of this.

I agree this is not the sole (or even the top) reason why Chicago is affordable. I am simply saying that this is a source of inertia that "drags down" the process of gentrification, if you will, in older and more established neighborhoods.

[WI_1982]

There is no "inventory shortage". The opposite is true. Chicago has a huge glut of apartments.

You can rent apartments in prime Lakeview for around $1000. That's cheap by big city standards. Hell, you can rent in the Hancock tower for not much more. There's too much inventory.

[WI_1982]

Originally Posted by iloveclassicrock7

After further research, Chicago actually has the 4th highest GDP in the world, but is considered the 4th most important city, ahead of LA

No, and no.

Again, Chicago has the fifth largest economy in the U.S., per the annual Federal BEA counts.

How can it then have the fourth largest economy in the world? Four U.S. metros have bigger economies, plus there are some bigger foreign economies (Tokyo, certainly, probably Seoul, probably London, probably Sao Paulo, and a few others).

Maybe Chicago is Top 10 in the world, at best. I still think that would be unusually generous to the size of U.S. metros, but one could make a straight-faced argument. But if Chicago isn't bigger than 5th in the U.S., it can't be much bigger than 10th in the world.

[iloveclassicrock7]

Originally Posted by WI_1982

No, and no.

Again, Chicago has the fifth largest economy in the U.S., per the annual Federal BEA counts.

How can it then have the fourth largest economy in the world? Four U.S. metros have bigger economies, plus there are some bigger foreign economies (Tokyo, certainly, probably Seoul, probably London, probably Sao Paulo, and a few others).

Maybe Chicago is Top 10 in the world, at best. I still think that would be unusually generous to the size of U.S. metros, but one could make a straight-faced argument. But if Chicago isn't bigger than 5th in the U.S., it can't be much bigger than 10th in the world.

I gave you a link to a known site that listed Chicago as 4th in the world, and if you looked at that link, you would see that it has a higher GDP then everything but Tokyo, NYC, and LA. Here are two links proving this

http://www.theatlanticcities.com/job...ld/109/#slide4

http://en.wikipedia.org/wiki/List_of_cities_by_GDP

There are a lot of ways to measure an economy, but the first link proves that Chicago is top 5 in the world

[prelude91]

Originally Posted by iloveclassicrock7

I gave you a link to a known site that listed Chicago as 4th in the world, and if you looked at that link, you would see that it has a higher GDP then everything but Tokyo, NYC, and LA. Here are two links proving this

http://www.theatlanticcities.com/job...ld/109/#slide4

http://en.wikipedia.org/wiki/List_of_cities_by_GDP

There are a lot of ways to measure an economy, but the first link proves that Chicago is top 5 in the world

That same "credible" list also suggests Boston has a larger economy than Hong Kong.

[iloveclassicrock7]

Originally Posted by prelude91

That same "credible" list also suggests Boston has a larger economy than Hong Kong.

Both sources suggest that, because it is correct. Here is another one I found, that proves this, http://www.citymayors.com/statistics...ties-2020.html

I realize it is 2020, but some easy math or even estimation will show you current day GDP

http://www.citymayors.com/statistics...ties-2020.html


Another one
http://www.telegraph.co.uk/finance/e...Citigroup.html


So I am just wondering how many times do I have to prove this ? Do I need to post 18 more sources, do I need to bring a person that studies this for a living to your house ?

[Dimethyltryptamine]

As of 2011. Granted it doesn't factor in Purchasing Power Parity as it's about the city, not the people.


http://www.city-data.com/forum/world...tions-gdp.html

[Chicago103]

Originally Posted by WI_1982

You can rent apartments in prime Lakeview for around $1000. That's cheap by big city standards. Hell, you can rent in the Hancock tower for not much more.

Yes, and I should know because In 2006-2007 I rented a condo on the 91st floor (facing straight east at Lake Michigan) of the John Hancock Center for $1250 a month. It was about 750 square feet and it was a studio/convertible, it had 14 foot ceilings, nearly twice as high as normal floors in the buildings and thus it had an open sleeping loft of about 100 square feet (included in the 750 sq feet) that more or less could be considered like a bedroom. The drawback was that it was not updated from 1970, it had the original kitchen and whitewashed walls and the bathroom was just ordinary.

In 2007-2008 I moved to a 48th floor studio apartment that faced straight north at Oak Street Beach and the entire north side lakefront for $1150 a month. It was slightly smaller at about 550 square feet but it was an updated apartment that had an updated marble kitchen and bathroom and a walk in closet space, it was as fashionable looking inside as any newer apartment/condo built downtown. I heard of a case about that time of a non updated studio (and the smallest studios in the Hancock are 550 square feet) on the 45th floor renting for $950 circa 2007.

[iloveclassicrock7]

I don't even know why we are debating this, the list you posted is compiled by one user, and there is no way that SF beats Chicago, here is the real information

http://www.theatlanticcities.com/job...ld/109/#slide4

http://en.wikipedia.org/wiki/List_of_cities_by_GDP

http://www.citymayors.com/statistics...ties-2020.html

http://www.telegraph.co.uk/finance/e...Citigroup.html


I mean seriously, just type in cities by GDP, and you get the answer.

Here is a very credible source that proves what I am saying

http://www.forbes.com/2008/07/15/eco...peed=undefined

Also, make sure you read the full story to understand their ranking....

[prelude91]

Originally Posted by iloveclassicrock7

I don't even know why we are debating this, the list you posted is compiled by one user, and there is no way that SF beats Chicago, here is the real information

Well obviously SF proper doesn't have a higher GDP than Chicago proper, but the Bay Area CSA has a higher GDP than Chicago CSA.

Again, I'm not sure what metric is being used with your source, but there isn't a source listed by the US Government that would place Chicago as the fourth largest economy in the World.