Chicago: wealthy from suburbs to the city? (Lincoln, Barrington: ski resorts, fit in)

[edsg25]

there was a thread on the NYC forum about how so many of the wealthy in high end suburban enclaves like westchester county and choosing to life in the city, basically the gated communities for the 1% in the heart of Manhattan.

this got me thinking. what about Chicago?

and my thinking became somewhat more expansive here, beyond just the 1%. When you drive through areas of the the city such as the Near North Side, it looks like a boomtown compared to any areas I see in suburbia. high rise buildings shoot up throughout the area.

do you think a trend exists here…..do you think there will be a real shift of wealth from the suburbs back into Chicago? and do you think many of the young couples who populate the lakefront neighborhoods and who once when they started having kids would settle in the suburbs will instead in increasing numbers more and more stay in Chicago instead?

are we headed more in the direction of the European model where the core (city) is the prime real estate and the periphery (suburbs) is less wealthy in comparison?

[williepotatoes]

I don't ever see the likes of Barrington, Oakbrook and the north shore suffering much from losses to Chicago. Upscale suburban living and upscale urban living are two very different things that appeal to two different mindsets.

What I do think you will see is more wealthy suburbanites buying second properties (condos etc.) located in the city to facilitate their entertainment and recreational excursions into Chicago.

[marothisu]

I'm not sure how to measure this at all other than anecdotal evidence. I know a wealthy family who is toying with moving from a wealthy western suburb to the city (downtown of course) though - at least buying a nice condo in one of the new very upscale developments under construction right now. Ultimately if they don't, it will have nothing to do with the city and more to do with where most of their friends reside.

Certainly this has happened, but to what extent? Who knows. If you look at the area of Lincoln Park just south of Armitage, you'll see a lot of new/new-ish mansions where people have torn down more than 1 home to put their mansion up as well and it's less dense now than it used to be.

Again though, this sort of thing is hard for someone with access to normal data to actually measure. I'd be surprised if the NYC example is anything other than anecdotal evidence.

[chet everett]

Originally Posted by williepotatoes

I don't ever see the likes of Barrington, Oak Brook and the north shore suffering much from losses to Chicago. Upscale suburban living and upscale urban living are two very different things that appeal to two different mindsets.

What I do think you will see is more wealthy suburbanites buying second properties (condos etc.) located in the city to facilitate their entertainment and recreational excursions into Chicago.

In New York City there are some regulatory policies in place that make this attractive. Illinois has no "millionaires' loop holes" and thus the advice that any sane financial planner gives their wealthy clients is simple: "DON'T DO IT!".

There is only a property tax break for primary owner occupied residences in Illinois and combined with unfavorable tax treatment for the rest of the costs associated with a second home in Illinois one needs to be a little nuts to go down this path. It is probably cheaper to have a 5 star hotel suite even 30 or more nights a year than try to justify a second home. Especially since one can get from some place like Oak Brook to the nicer spots downtown / near north in well under an hour off-peak there is really no benefit in this sort of arrangement...

[NOLA101]

No, this won't happen in our lifetime. The majority of U.S. wealthy prefer the suburbs.

It isn't happening in NYC either, really. Yes, the share of wealthy in NYC proper has grown, but the NYC suburbs are in no danger of becoming poor and undesirable. The prices in wealthy NYC suburbs have soared too, just at a somewhat lower rate than desirable parts of the city proper.

It's like saying "because Brooklyn RE prices have increased at a faster rate than Manhattan RE prices, is Manhattan in danger of becoming undesirable?" No, of course not.

[edsg25]

the suburban appeal is far less today than it once was. suburbia was never a natural place for people to live in the first place. it was a product of the car and it was highly subsidized to allow it to become what it is. the price of energy is going to take its toll on it.

i say this independent of the issue of the draw of the city to the very wealthy.

others will disagree, but I a definitely believe suburbia will be in decline as it is totally unsustainable.

[williepotatoes]

Originally Posted by chet everett

In New York City there are some regulatory policies in place that make this attractive. Illinois has no "millionaires' loop holes" and thus the advice that any sane financial planner gives their wealthy clients is simple: "DON'T DO IT!".

There is only a property tax break for primary owner occupied residences in Illinois and combined with unfavorable tax treatment for the rest of the costs associated with a second home in Illinois one needs to be a little nuts to go down this path. It is probably cheaper to have a 5 star hotel suite even 30 or more nights a year than try to justify a second home. Especially since one can get from some place like Oak Brook to the nicer spots downtown / near north in well under an hour off-peak there is really no benefit in this sort of arrangement...

We're talking about the wealthy here not people who have to be cheap or get the approval of a financial adviser to spend their mad money. I know of two emptynester couples who have done this very thing in the last five years. And I wouldn't even consider these folks to be truly wealthy. One in particular spends most of the summer and the entire Christmas season downtown.

[williepotatoes]

Originally Posted by edsg25

definitely believe suburbia will be in decline as it is totally unsustainable.

This is just so dead wrong. Chicagolands only significant population growth is coming from suburbia these days. It's the city that has to worry about shrinking further as it becomes more and more a metroplis of haves and have nots, with the gap getting wider all the time.

[chet everett]

Originally Posted by williepotatoes

We're talking about the wealthy here not people who have to be cheap or get the approval of a financial adviser to spend their mad money. I know of two emptynester couples who have done this very thing in the last five years. And I wouldn't even consider these folks to be truly wealthy. One in particular spends most of the summer and the entire Christmas season downtown.

The plural of "anecdote" is NOT data. Though I know many people that own vacation homes in all kinds of places from high end ski resorts in Europe or out west to luxurious parts of Florida, as well as nice spots nearer to Chicago like Michigan's 'Harbor Country' I also have worked with real estate and wealth advisory firms that cater to those with very substantial net worth and the strategy that such folks follow is often shaped by sophisticated tax strategies to enhance generational wealth. Spending money on recklessly is a great way to turn a large fortune into a small one -- Why Your Vacation Home May Not Be Your Retirement Home - US News

[Macgregorsailor51]

You honestly think someone who can afford a 2nd home doesnt or shouldnt do it because they wont have the homestead reduction ? Really? I know a couple Drs Who own Condos with Lake Views for "Vacation" / Weekend Homes.. Like owning a Yacht, if you have to ask the milage it gets, you cannot afford it.. Your 2nd Paragraph was hilarious..None of us who own vacation HOMES because its the cheapiest way to have a Room to visit hahahaha

Originally Posted by chet everett

In New York City there are some regulatory policies in place that make this attractive. Illinois has no "millionaires' loop holes" and thus the advice that any sane financial planner gives their wealthy clients is simple: "DON'T DO IT!".

There is only a property tax break for primary owner occupied residences in Illinois and combined with unfavorable tax treatment for the rest of the costs associated with a second home in Illinois one needs to be a little nuts to go down this path. It is probably cheaper to have a 5 star hotel suite even 30 or more nights a year than try to justify a second home. Especially since one can get from some place like Oak Brook to the nicer spots downtown / near north in well under an hour off-peak there is really no benefit in this sort of arrangement...