96,000 Multifamily Housing Buildings in Chicago Area are Underwater ; 42 Percent of Small Rental Buildings at Risk of Default
by ilene - April 11th, 2010 11:58 am
96,000 Multifamily Housing Buildings in Chicago Area are Underwater ; 42 Percent of Small Rental Buildings at Risk of Default
Courtesy of Mish
Citing a DePaul University study, the Chicago Tribune reports More than 42 percent of small rental buildings in Cook County are ‘underwater’
Owners of 96,000 two- to six-unit rental buildings in Cook County are upside-down on $12.6 billion of mortgage debt, potentially putting 42 percent of small rental buildings in the county at risk of default, new data show.
A study by DePaul University’s Institute for Housing Studies, released Wednesday, also found that $3 billion in multifamily building mortgages already are in foreclosure, affecting more than 32,000 rental units in Cook County, or 6.8 percent of multifamily mortgages. That compares with about 38,000 single-family homes in foreclosure in Cook County.
Researchers analyzed 25,822 sales of existing small rental buildings and 591 sales of buildings with seven or more units in Cook County.
Multi-family foreclosure rate spikes in Cook County
Here are some additional facts in a Chicago Sun Times article Multi-family foreclosure rate spikes in Cook County
The foreclosure rate on multi-family rental properties in Cook County has spiked, and falling property values have put 30 percent, or more than $13 billion in Cook County’s multi-family mortgages at default risk, according to a study released today by DePaul University’s Institute for Housing Studies.
The report found that there are more than 32,000 rental units in Cook County impacted by foreclosures. The percent of loans in foreclosure on small two- to six-unit properties jumped to 8.75 percent in the fourth quarter of 2009 from 1.67 percent five years ago. On large seven-plus unit rental properties foreclosure rates jumped from 0.3 percent in 2004 to 3 percent in the fourth quarter of 2009.
For one in eight rental apartment units, revenues are falling below operating costs for owners. Owners of about 74,000 rental units in Chicago or 13 percent of the market, are currently spending more to operate buildings than they are collecting in revenues, placing them at significant risk of decreased or discontinued maintenance.
“The multi-family foreclosure crisis has not received as much attention as the crisis in the single-family housing market, but the trends outlined in this report demonstrate that it should,” study author James Shilling, chair of Real Estate Studies, said in a statement.
He added the problem
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Chicago Cannibalization: Mayor Daley’s Budget Eats 75% of a 75 Year rainy Day fund in One Year
by ilene - December 5th, 2009 12:57 pm
Chicago Cannibalization: Mayor Daley’s Budget Eats 75% of a 75 Year rainy Day fund in One Year
Courtesy of Mish
A year ago Mayor Daley rammed though a parking meter deal that was supposed to provide a "rainy day" fund for Chicago for the next 75 years.
In September, snags appeared prompting the Chicago Sun Times to write Daley losing confidence in parking meter company.
Mayor Daley demanded today that Chicago’s embattled parking meter operator synchronize the time on its pay-and-display boxes and void parking tickets tied to time discrepancies. “That’s unacceptable. They have to void those tickets,” he said.
Daley said the latest in a string of operational problems that have marred the transition to private control has prompted him to lose confidence in Chicago Parking Meters LLC.
“Slowly but sure, yes,” he said.
But, the mayor said he is not about to cancel the 75-year, $1.15 billion lease tied to a steep schedule of rate hikes that helped plug a gaping hole in the city’s 2009 budget.
“See that home over there? Go over there and ask them if they want their real estate taxes increased,” the mayor said after a ribbon-cutting at the new Jorge Prieto Math & Science Academy, 2231 N. Central.
“We have a rainy day fund. If it wasn’t for that, our financial crisis would be worse. … That was sold at the highest time. You can’t even sell a public asset today. You can’t sell anything today.”
The Chicago Sun-Times and NBC5 reported this week that pay-and-display boxes touted as the high-tech solution to over-stuffed and improperly calibrated parking meters have a problem of their own: they’re out of synch.
A spot check of about 50 newly-installed boxes found the time they show varies from machine-to-machine — leaving motorists confused about when to return to their vehicles to avoid getting a ticket.
Times displayed by boxes along Lincoln, Fullerton and Armitage didn’t match, even though they’re on the same computer server.
Political fall-out from the parking meter fiasco is at least partly to blame for a precipitous drop in Daley’s approval rating — to 35 percent, the lowest of his 20-year reign, according to a Chicago Tribune poll.
Chicago’s parking deal revisited
In November, Felix Salmon posted an interesting chart showing just how flawed the lease deal is in Chicago’s…
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Conventions Say Good Riddance to Chicago Over Costs and Union Work Rules
by ilene - November 13th, 2009 1:53 pm
Conventions Say Good Riddance to Chicago Over Costs and Union Work Rules
Courtesy of Mish
Major conventions are ditching Chicago over outrageous costs for McCormick Place electricians. Please consider High costs drive major trade show out of Chicago.
Chicago ditched. Tens of thousands of outsiders say it’s too expensive to spend their money here; $52 million would have been pumped into our economy by some 28,000 visitors. Instead, a major trade show says it’s leaving Chicago behind for good.
This week, CBS 2 reported on outrage over the hundred dollar case of Pepsi. Exhibitors feeling ripped off. Threatening not to come back.
Now, it’s happened. McCormick Place electricians were the straw that broke the camel’s back for one Chicagoan who says he reluctantly said "no" to bringing his convention back home.
The Tribune reports the Healthcare Information and Management Systems Society, which held its annual meeting at McCormick Place for the first time in April, is taking its 2012 show to Las Vegas instead.
Healthcare Information and Management Systems CEO Steve Lieber told CBS2 it’s all because of the electricians.
"Our costs were about $200,000 more," said Lieber. "So it went from $40,000 to $240,000 for the electrical work alone."
The city got the word Wednesday that the huge medical convention wouldn’t return. They’re also sweating out a decision by an even bigger show.
The International Plastics Showcase has been in Chicago since 1971, but now a spokesman says: "We are looking at other options."
Like Orlando. Though the medical trade group says it’s deeper than union versus non-union towns.
"It was the number of hours and the number of people it took to do the identical job," Lieber said.
Two months ago, McCormick Place quietly fired two-thirds of its electricians, promising to bring back only the best, and only when they’re needed; trying to change the work rules and work ethic that’s already cost Chicago tens of millions of dollars.
The article says the issue is not unions but rather "work rules".
Excuse me but who sets those work rules? Mickey Mouse?
If it takes 3 times as many workers to get the job done in Chicago then union rules are more than likely the culprit.
Not to fear, I have the perfect solution: raise property taxes and sales taxes to paper over falling revenues. That may sound…
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Chicago National Youth Summit and Grant Project
by phil - October 1st, 2009 4:53 pm
Democracy 2.0: Exploring the Millennial Generation's ROI
November 18-20
Chicago, IL
A National Youth Summit Presented By
The Peter G. Peterson Foundation and Mobilize.org
Apply for a Summit Invitation or Compete for a Democracy 2.0 Grant Award
by Submitting Your Ideas to Improve the Financial Health of America's Youth
The Peter G. Peterson Foundation (PGPF) and Mobilize.org are partnering to host the Foundation's first national Youth Summit in Chicago, IL from November 18-20 – just over one year after Chicago's Barack Obama was elected as our nation's President.
The three day Youth Summit, entitled Democracy 2.0: Exploring the Millennial Generation's ROI, standing for "return on investment," will focus on (1) exploring the barriers preventing today's younger generation from achieving financial health and (2) developing the action plans necessary to begin setting an agenda for millennial-led economic reform in the United States.
To that end, PGPF and Mobilize.org are inviting Americans between the ages of 18 and 34 with solutions for improving the economic health of the Millennial generation and a desire to participate in this exciting and forward-thinking dialogue to submit their ideas online at www.Mobilize.org. Through the use of interactive keypad voting technology, PGPF and Mobilize.org will award grants totaling up to $25,000 for selected ideas, projects and proposals that rise to the top during the Summit. Additionally, funded ideas will receive 12 months of support from Mobilize.org, whose partner network and funders are committed to further building their success. Submissions will be accepted until October 17, 2009.
Those who wish to attend the Summit as a participant only may apply for an invitation online. All selected participants who are invited to attend the three day Summit will have their airfare and accommodations paid for by funding provided by PGPF.
Summit Resources
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We Regret To Inform You That The City Of Chicago Will Be Closed Monday
by ilene - August 16th, 2009 4:30 pm
We Regret To Inform You That The City Of Chicago Will Be Closed Monday
Courtesy of John Carney at Clusterstock
The Chicago Sun Times reports that budget woes will mean many city services just won’t open tomorrow:
If you planned to check out a library book, visit a city clinic or have your garbage picked up on Monday, you’re out of luck.
The City of Chicago will basically be closed for business on Aug. 17, a reduced-service day in which most city employees are off without pay, according to a release from the Office of Budget and Management. City Hall, public libraries, health clinics and most city offices will be closed.
Emergency service providers including police, firefighters and paramedics will be working at full strength, but most services not directly related to public safety, including street sweeping, will not be provided, the release said.
That also includes garbage pickup. Residents who receive regular collection on Mondays should expect trash to be picked up the following day, the release said. Some other customers may experience a one-day delay as collectors catch up.
As part of the 2009 budget, three reduced-service days were planned for 2009, days which are unpaid for all affected employees — the Friday after Thanksgiving; Christmas Eve; and New Year’s Eve. The City Council recently approved moving the reduced-service day planned for New Year’s Eve to Monday.
The 2009 budget anticipates saving $8.3 million due to the reduced-service days.
While lots of people wonder if the recession may spur more financial responsibility in household spending habits, there’s not enough talk about the possibility of more government financial responsibility. Lots of things we don’t need--like free public libraries stuffed with books people could buy for themselves or don’t want to read anyway--may have to be cut back. The ability to shut down services for a day--and deprive city workers of pay--shows that we may have the political will to actually make the cuts.
See Also:
California’s Still Riskier Than Russia
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.