CHA needs to re-calibrate their plans for public housing... (Chicago: real estate, rentals)

[chet everett]

The stalled multi-family development market means efforts to mix subsidized , discounted and market rate units will scraped and replaced with a strategy that will vary "building by building" -- Chicago Real Estate Collapse Cripples CHA Plans

The accommpanying charts really highlight how little demand there is from buyers, the traditionally "tough sell" areas face tremendous headwinds...

[rparz]

You definitely don't want pure public housing complexes as that has been evidenced to do little more than breed problems and not really benefit the tenants with any form of upward mobility.

I like the idea of the market rate rentals as that works two-ways. One, the purchase market in Chicago is soft to begin with. And two, even if I was in the market to buy a condo in Chicago, I wouldn't buy one in a CHA property. Main reason: They're not being 'sold' as you think. They're being sold with a 99-year lease. I would only buy if I were to get a deep discount relative to privately developed units because that transforms a home purchase (traditionally a solid investment) into a depreciating asset which loses value every year closer to the expiration of the 99 years.

[urbanlife78]

Originally Posted by rparz

You definitely don't want pure public housing complexes as that has been evidenced to do little more than breed problems and not really benefit the tenants with any form of upward mobility.

I like the idea of the market rate rentals as that works two-ways. One, the purchase market in Chicago is soft to begin with. And two, even if I was in the market to buy a condo in Chicago, I wouldn't buy one in a CHA property. Main reason: They're not being 'sold' as you think. They're being sold with a 99-year lease. I would only buy if I were to get a deep discount relative to privately developed units because that transforms a home purchase (traditionally a solid investment) into a depreciating asset which loses value every year closer to the expiration of the 99 years.

99 year leases are just legal terms because they can't say infinitely. Basically if it is a 99 year lease, you are paying for the unit and not the land it sits on. It is a way to greatly reduce the cost of a house and make it more affordable to buy. Often times these places come with clauses on how long you must live there before deciding to sell and how much you are allowed to sell if for and how much of a percentage the land owner receives to help continue upkeep of the land as well as building more units.

[rparz]

Originally Posted by urbanlife78

99 year leases are just legal terms because they can't say infinitely. Basically if it is a 99 year lease, you are paying for the unit and not the land it sits on. It is a way to greatly reduce the cost of a house and make it more affordable to buy.

They're charging (or attempting to) market rate! Unless it's some killer location at a discount to the neighboring areas, it doesn't seem worth it.

Often times these places come with clauses on how long you must live there before deciding to sell and how much you are allowed to sell if for and how much of a percentage the land owner receives to help continue upkeep of the land as well as building more units.

Yeah, forget that. I'd think real hard before I signed on that dotted line. Restrictions and hassles.

Now, if the private development is charging 350k for a unit, and you can get a comparable one as noted above for 200, okay, now you're talking. If they want 325, I'd keep walking.

[urbanlife78]

Originally Posted by rparz

They're charging (or attempting to) market rate! Unless it's some killer location at a discount to the neighboring areas, it doesn't seem worth it.



Yeah, forget that. I'd think real hard before I signed on that dotted line. Restrictions and hassles.

Now, if the private development is charging 350k for a unit, and you can get a comparable one as noted above for 200, okay, now you're talking. If they want 325, I'd keep walking.

Maybe so, I don't know how this is working, but the times I have dealt with this type of thing, that is how it works. Now if it does in this case, I don't know.

[rparz]

It's been over a year, but I was poking around the listings over at the Westhaven Park, and I didn't think there were any fantastic deals to be had in light of the restrictions mentioned above.

[SeventhFloor]

Has tearing down CHA helped any?

NYCHA has only demolished 2 developments, Markham Gardens in Staten Island and Prospect Plaza in Brooklyn. Markham Gardens has been replaced with new townhouses, while Prospect Plaza remains vacant shells.

[rparz]

Probably depends on how you measure 'success.'

On one hand, the residents are currently displaced, but on the other, I could only imagine what the murder rate would look like if Cabrini, Robert Taylor and ABLA were still at peak occupancy.