High Income zips in Illinois losing population.

[Chicago76]

Originally Posted by nikitakolata

Well, $1200 a week is a lot more than $2200 a month. Just sayin'.

It would be, but that childcare center doesn't charge $1200/week. That's monthly. I know this because I have a buddy w/ three in that place, we've talked about costs, and he would have slit his throat by now if he was dropping 15 grand a month for three kids to go three days a week.

I just figured that you meant $1200/mo for three days a week, because $400/day is not anywhere close to reality

[divakat]

Yeah I guess I forgot not everyone in their 30's has children. When you are shelling out 2400 per month in daycare, it takes longer to save that 20%. But that is the choice you make---we wanted to have children so we are compromising by either 1) renting until we can save for a down payment or 2) buying a less expensive but still nice house in the area we like. I am kind of leaning towards 2 right now.

[vikm23]

Property taxes play a huge part here as does the fact that Illinois has to nickel and dime resdents as much as possible (tolls, sales tax etc.) because this state is broke. Affluent individuals who want to maximize their salary and have some flexibility with respect to work location are moving out. I wouldn't super affluent but my wife and I are doing to same thing.

[Lookout Kid]

Originally Posted by chet everett

I remember back in the paleolithic days of daycare I felt the same way. I think it sorta works for a very brief time and then the "child enriching experiences" kick in. Sometimes it is stuff that the schools offer that is "optional". Other times it is sports and other extracurriculars.Then it is "real clothes" as opposed to hand-me-downs / tag sale finds. Then it becomes "if we don't take a trip with the kids they'll be too old". Then the college costs kick in...

Don't get me wrong, I would not do it any differently but the "free school dividend" is even more fleeting than the "peace dividend"...

Childcare costs have gone WAY up, though. At least on the North Side and desirable suburbs. My $3,000 a month for two kids is on the low end for infant care. We had a nanny for a while at about that price, and "budget nannies" have issues of their own.

If I'm spending thousands of dollars a month on traveling soccer teams, text book fees, and the latest teenager blue jeans, something is very wrong.

[cubssoxfan]

Originally Posted by Lookout Kid

Childcare costs have gone WAY up, though. At least on the North Side and desirable suburbs. My $3,000 a month for two kids is on the low end for infant care. We had a nanny for a while at about that price, and "budget nannies" have issues of their own.

If I'm spending thousands of dollars a month on traveling soccer teams, text book fees, and the latest teenager blue jeans, something is very wrong.

Infant care has always been more $$ than childcare for kids over 3-4 years old. The licensing requirements require many more caregivers per child than with older kids who can be placed in a pre-school setting.

[Lookout Kid]

Originally Posted by cubssoxfan

Infant care has always been more $$ than childcare for kids over 3-4 years old. The licensing requirements require many more caregivers per child than with older kids who can be placed in a pre-school setting.

Yeah, the big price drop metro-wide seems to be at age 2. Not only are fewer teachers required, but there is also a greater supply of pre-schoools because profit margins are higher at that age range. We're closer to $2,000/month these days for the two kids, but we see a lot of schools that cost more.

Either way, we are lucky enough to have work schedules that will allow us to avoid "after care" once the kids are both first grade and over, so we expect a pretty huge savings when the kids start school. We will not spend $2,000 a month on sports, clothes, and food.

[chet everett]

Originally Posted by Lookout Kid

... We will not spend $2,000 a month on sports, clothes, and food.

You will get a bit of an uptick in the month-to-month and you are correct, the various "kid expenses" generally are far less than the constant budget drain of childcare, but there were months were outflows on things that were if not 100% "child related" were often motivated by the needs of kids would see several thousand in non-essential spending. No kid has ever died from not getting a new bicycle or going to summer camp or getting their room repainted and "grown up" furniture, but it still turns that "dividend" into empty spot in the old checking account

[Guineas]

Originally Posted by Chicago76

I did some more digging as I've become curious about this too, and the best I can come up with is that the author has overstated and/or misunderstood the issue. Or maybe he realizes that it really isn't much of an issue, which is why he glosses over it briefly.

1-The biggest single determinant of population growth in a given well off suburban area (zip code, neighborhood, etc) seems to be change in the number of households. Think about well off areas in Tampa full of gated communities, golf courses, etc. These zips often contain a lot of undeveloped land. So from 2000-10, that land could be used to build out areas and support more inhabitants. Barrington in Chicago is wealthy and like this. Now think of wealthy zips in places like suburban MD. They tend to have urban centers that contain mid-rise condos. If there is sufficient demand, the built environment already in place would accept the construction of additional mid rises, which means more households, which means more people. They are kind of like Evanston or to a lesser extent Oak Park in this respect. Now compare that to many of Chicago's wealthiest areas (Lake Forest, Hinsdale, Winnetka, etc.). These areas are older, inner suburbs without much (if any) urban component. They can't build up or out, so the number of households are essentially capped.

2-As Chet mentioned, it appears he may have not accounted for changes in zip code boundaries. Hinsdale is the big one. Take a look at their household numbers here: ZIP Code 60521, HINSDALE IL, U.S. ZIP Codes, Database - HINSDALE Illinois IL Map

There have been teardowns of smaller homes to build larger homes on consolidated lots, but there is no way that the number of households in this area is less than half of what it was 10 years earlier. The zip code boundaries have changed.

3-The stock market/housing price issue I touched on earlier. From 2000 to 2010, professionally I climbed in corporate ladder at a Big 4 accounting firm. My wife is a physician. We also started having kids in this decade. We are the exact demographic the Winnetkas, Hinsdales, and Lake Forests of the region formerly attracted. My wife even grew up in Hinsdale. These aren't the only types living in these areas, but they do represent a really big proportion of them. I can compare the partners who are 10-15 years older than the Directors a rung below them at law firms and accounting firms and see huge cultural and economic differences in how the two came up professionally. What a $1 investment in the market would yield over a ten year period beginning in:

1980: $4.95
1990: $5.26
2000: $0.91

So if you're someone in your mid to late 30s, you've suffered through a market that has been a losing or break even proposition, which makes it more difficult to accumulate wealth to live in an expensive area. Even with the housing crash, home appreciation in the 00s fared better than the stock market, which is really unusual. I can also tell you that professionals in these types of jobs are working longer hours (with 24/7 internet and Blackberries, 80 hrs/week is not uncommon for these types), so employees are cutting corners, not saving as much, and paying someone else to do things that employees in the 80s and 90s had time to do themselves (cook, laundry, day to day errands, etc.). It may not seem like much, but it does add up. Wages haven't really increased for the non-equity employees in professional svcs either. A second year accounting Mgr or 2 year law associate in 2007 made maybe 10% more than their counterparts did in 1998.

Where I'm going with all of this is that if I look at the accounting and law partners I know who came up the ranks in the 80s and 90s, they all live in one of two places: (a) most expensive parts of the city (Gold Coast, Streeterville, LP) of b) in the most expensive suburbs (mainly Winnetka, Lake Forest, Highland Park, Kenilworth). All of them I know (10 or so) moved out there by 35 when they were right at the cusp of making partner. They could afford it thanks to stock market wealth accumulation and a relatively cheaper housing market. None of the guys I have worked with who have either just made partner or are knocking on the door in their mid to late 30s have moved to these area, because they can't afford it. They have stayed in the city (which is my preference) or they have substituted a slightly "downmarket" suburb: Glenview or Northbrook for Winnetka/Wilmette/Kenilworth. Naperville or LaGrange for the nicest parts of Hinsdale, etc.

If you want to see what this looks like demographically, look at the under 10, people age 30-44 and their respective population changes from 00-10 here:

ZIP Code 60045, LAKE FOREST IL, U.S. ZIP Codes, Database - LAKE FOREST Illinois IL Map
ZIP Code 60093, Database - WINNETKA Illinois IL Map, U.S. ZIP Codes, WINNETKA IL

Note the population hasn't changed much, but the older crowd who accumulated wealth can't find people in the 30-44 crowd with younger kids to sell their houses to. I do suspect this has changed some with the decline in housing prices, but it came too late to be picked up in the 2010 census. Note also that the pops really haven't changed positively or negatively in aggregate.

Chicago offers reasonable substitutes that allows this to occur. I can move to Glenview/Northbrook or the Western edge of Wilmette a little off the lake (not that I could afford to live directly on the Lake anyway).

Good post. It's not just accountants and lawyers. My wife and I are both physicians (I'm a surgeon and she's a pediatrician) and we can't and won't be able to afford it in next 10 years either. Physician salaries have stagnated in the past 20 years, while debt and training time have increased. It's only going to get uglier in the future.

The responsible thing to do would have been just to pop the housing bubble for good, instead of constantly keeping it on life support with QE-infinity and near 0% interest rates.

Places like Texas look better and better for Gen X professionals. I can get a nicely renovated 2000 sq ft single family home for $300k in a tree-lined neighborhood with good schools in Dallas burbs 15 minutes from the hospital. There are just more choices in DFW, unlike the false choices of painful commutes and ghetto schools we're dealt with in Chicagoland. Plus there's malpractice reform in Texas.