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Like I said before, I think Chicago’s “affordability” is a bit illusory. Good luck finding a SFH for under 1mil in most of the desirable areas, and in some neighborhoods it goes way up from that. You almost need to go up to Andersonville/Edgewater before you start seeing decent homes in the 7-800k range. Boston has a lot more desirability in its city limits vis a vis Chicago, doesn’t mean that Chicago doesn’t have a lot of very desirable and pricey areas itself, particularly when it comes to SFHs. Chicago also has a lot of extremely undesirable areas with houses for sale for pennies on the dollar which bring the overall median home value down. But those neighborhoods are very unsafe, or more far flung, residential etc. It’s a very bifurcated city. That’s why I said if you can pinpoint a good transitional area that has good bones, housing stock and connection to public transit, it may pay off very well. Logan Square for example would have been an extremely good investment 10 years ago.
Yeah, in it's core (the more desirable neighborhoods), Chicago is probably closer to the higher end of cities and not necessarily affordable for everyone. But even in the nice neighborhoods, while more expensive than many cities, they still aren't nearly as expensive as SF, Boston, or New York.
The problem is, Chicago's tech development is more "potential" than anything else at this point. And Chicago while it may be aggressively recruiting, is nowhere near a top destination for tech talent. Chicago is middle of the pack when it comes to tech. If you are a top tech talent, you are looking at Boston, the Bay Area, Seattle, Austin, and other cities way before you consider Chicago.
"If" some of these tech initiatives come to fruition, Chicago's relative affordability (which this thread was started on) could be a draw for top tech talent. But that is mostly visionary talk at this point (which could take decades to come to fruition, if successful). Chicago currently is not a "tech draw." It has some decent tech initiatives and is making some inroads, but it's not in the discussion of top "tech" cities at this point.
Chicago's Medical District has always been strong and solid. I guess there's potential there around health and life sciences. Abbott Laboratories is a powerhouse, but you need a lot of those to really be a major player in biotech.
I understand Chicago is trailing other markets and was late to the game so to speak. However, it is undeniable that investments around tech infrastructure is being made at significant levels to produce
the numbers that I gave previously. Chicago was #1 in rate on ROI for VC funding for some consecutive years. Again, year-after-year it is setting new records for VC dollars and producing more unicorns than much more established markets. This is from a city that didn't even have a tech/start-up economy to speak of a decade ago.
As far as Boston having a pipeline of talent with Harvard, MIT, BU etc. Chicago is the city second to Boston with amount of urban schools and second highest percentage of college students within the city while UChicago and Northwestern are both elite schools. Most of the universities are working collaboratively to establish Chicago's quantum/tech foundations and talent pool.
As for becoming a life-science hub that is competitive with the coasts, Chicago can either build a ton of new laboratory space and make the necessary investments for future growth or remain stagnant. This is not "visionary." The Bronzeville East mega-project is centered around bio-tech with commitments from bio-tech firms. Fulton Labs is almost complete, another 16 story Life-Science building proposed in Fulton Market a few blocks away goes before the plan commission next month. Lincoln Yards' first building, "Ally" has broken ground, a 7 story, 330,000 sq. ft. Life-Science building. The IMD has been completely rezoned to allow for more density/height and residential use to modernize and usher in expansion. Quite a few projects have been completed and are breaking ground.
No other market offers Chicago's assets to a potential workforce. New York-lite on the lake at half the price. The historic architecture, culinary scene, diversity, institutions, night-life, theater, miles of skyscrapers and world class parks fronting the lakefront is an easy sell for high-quality urban life at a mass scale not found outside NY. Rahm Emanuel was the best it gets at selling companies the Chicago dream and the results are obvious. This city is resilient and I believe we have awoken and found ourselves falling behind and we're trying to right the ship.
The fact is, it would take pages, and pages to highlight Boston's strengths and data to support its place in the Bio and tech world. Someone else can do the dirty work here. The fact that Boston is one of the VC capitals of the first world, as a city of 600k, tells you about all you need to know. More than NYC, in raw numbers.. SImply insane.
I'm sincerely happy that the Illinois Medical District is making strides. Chicago will continue to do good things, so long as they don't lose the companies once they "make it". But go to Seaport, Longwood, or Kendall, or Waltham-Burlington and compare those to Illinois Medical District. They are monsters, and it's only growing from here.
It doesn't mean Chicago doesn't do it, or doesn't do it well. It's simply not San Francisco or Boston in those verticals.
Chicago has other strengths, particular in large fiserv, law, and logistics.
I'm not knocking Boston's status, I'm only saying Chicago is in the process of reinventing itself. The claim made was Boston reinvented itself like no other city has. I'm only pointing out that Chicago has multitudes of investments at different levels of reality that will absolutely transform the economy and urban landscape. The post industrial scars of sprawling brownfields and blighted/shuttered manufacturing zones are beginning to be erased by mixed-use mega-projects with a concentration on life-science /tech. We are talking projects that total $40 billion which is extremely substantial by any measure.
Fulton Market for example has been the fastest growing office sub-market in the U.S. outside of NY for nearly 6-7 years in terms of new square footage. You don't get statistics like that and the others I've provided by a city that is stagnant. Fulton Market is in a state of perpetual expansion that was essentially unaffected by the pandemic. In another 5 years at this rate it will become a seamless extension of the Loop.
Chicago is definitely a powerhouse in law, logistics and fi-serv. It is trying to become an equal player in startups, bio-tech and quantum initiates.
Again, year-after-year it is setting new records for VC dollars and producing more unicorns than much more established markets. This is from a city that didn't even have a tech/start-up economy to speak of a decade ago.
Record? Illinois VC investment is tiny. California is the 800 pound gorilla. $84 billion. New York and Massachusetts are #2a and #2b far back at $17 to $18 billion. The next tier is Seattle, Austin, and RDU at $4 billion. Illinois is far back at $2 1/2 billion. If you look at Chicago on a per capita basis compared to Boston, it looks even worse. Boston is a knowledge economy. It's why the pay scales are so much higher than Chicago. Chicago is the dominant regional city for the middle third of the country so it's very diverse. Boston is very much a boutique economy. It's world class in a very limited number of things and otherwise dwarfed by NYC which is the dominant regional city for the east and the more significant global city.
Like I said before, I think Chicago’s “affordability” is a bit illusory. Good luck finding a SFH for under 1mil in most of the desirable areas, and in some neighborhoods it goes way up from that. You almost need to go up to Andersonville/Edgewater before you start seeing decent homes in the 7-800k range. Boston has a lot more desirability in its city limits vis a vis Chicago, doesn’t mean that Chicago doesn’t have a lot of very desirable and pricey areas itself, particularly when it comes to SFHs. Chicago also has a lot of extremely undesirable areas with houses for sale for pennies on the dollar which bring the overall median home value down. But those neighborhoods are very unsafe, or more far flung, residential etc. It’s a very bifurcated city. That’s why I said if you can pinpoint a good transitional area that has good bones, housing stock and connection to public transit, it may pay off very well. Logan Square for example would have been an extremely good investment 10 years ago.
Bronzeville is one of those transitional areas. SFH's pre-pandemic were selling for record prices in that $700-$800k range. The area's proximity to downtown and being lake-adjacent makes it prime real-estate. With the $8 billion 'Bronzeville East' mega-project and the Mercy property up for sale/redevelopment along with all the infill it will become a model south-side neighborhood. It has a rich history and culture with excellent bones. It currently lacks robust commercial corridors like its northside counterparts but in time it will probably become a southside combination of Lincoln Park and Old Town.
Logan Square is NIMBY paradise and is probably finished with any noticeable transformation like Wicker Park where it is next to impossible to build anything outside of the occasional 4-story/25 unit box so prices will always remain inflated.
Record? Illinois VC investment is tiny. California is the 800 pound gorilla. $84 billion. New York and Massachusetts are #2a and #2b far back at $17 to $18 billion. The next tier is Seattle, Austin, and RDU at $4 billion. Illinois is far back at $2 1/2 billion. If you look at Chicago on a per capita basis compared to Boston, it looks even worse. Boston is a knowledge economy. It's why the pay scales are so much higher than Chicago. Chicago is the dominant regional city for the middle third of the country so it's very diverse. Boston is very much a boutique economy. It's world class in a very limited number of things and otherwise dwarfed by NYC which is the dominant regional city for the east and the more significant global city.
Yes, Chicago is setting Chicago records. I'm not sure know how you misconstrued that, I thought I was clear. 2020 was a record year for VC funding in Chicago with 2021 surpassing it not even midway through the year. Chicago leads all cities in rate of returns.
In August, Chicago had 9 unicorns in 2021 compared to 5 for L.A., Seattle & Boston. All this is impressive for a city that has to compete with the coasts and wasn't even a player in the tech sector a decade ago. I would imagine the only way from here is up. Especially considering the collaborative effort between so many entities, from state and federal government, to universities, national laboratories, private business leaders to private developers and local leaders all working together to raise Chicago's profile in the tech industry. Chicago is only now really introducing itself on the scene as a player and aggressively recruiting top talent and those who left home for opportunity that wasn't available to them previously. Again, it cannot be overstated what it means for UChicago to be developing its first engineering school devoted to molecular studies and a new branch of science that crosses so many disciplines. That places the city at the helm of a new frontier with potential exponential growth and a new Silicon Valley.
I'm only saying Chicago is in the process of reinventing itself. The claim made was Boston reinvented itself like no other city has. I'm only pointing out that.
Whatever the reason, gentification and lack of land makes Boston expensive. You can go back and forth on the reasons for the strong Boston economy, but areas such as Dorchester and Roxbury have gentrified to the point that there is a momentum that areas of Chicago's south and west sides do not have. My late grandmother owned a two family in Codman Square, in Dorchester (Boston), where my mother grew up and saw the neighborhood go from Jewish to Irish to black, and drug deals and murders not uncommon. She did not believe in white flight, and doubled down and bought the two family three doors down for $16,000 in the late 80s. As a college freshman, she had me peel layer after layer of wall paper off walls at that property; she had a plasterer come in who told me, off to the side, that she was crazy and he could not understand what she was doing in such a dangerous neighborhood. When she died my mom and my uncles sold that property for $250k, it is now worth $800k. She is having the last laugh.
Scarcity of land and high demand has made the Boston area go from cheap to expensive. This dynamic will eventually hurt Boston IMO, and make places like Chicago with homes in all price ranges more in demand.
Scarcity of land and high demand has made the Boston area go from cheap to expensive. This dynamic will eventually hurt Boston IMO, and make places like Chicago with homes in all price ranges more in demand.
A lot of people refer to this "scarcity of land," and relative to more post-industrial Chicago, that's true.
But it's moreso related to much stricter zoning/regulatory requirements. The Boston area is notoriously onerous for new development, even in the most suburban of towns. The huge amount of environmentally "off limits" land for development alone puts a huge upward pressure on prices.
Whatever the reason, gentification and lack of land makes Boston expensive. You can go back and forth on the reasons for the strong Boston economy, but areas such as Dorchester and Roxbury have gentrified to the point that there is a momentum that areas of Chicago's south and west sides do not have. My late grandmother owned a two family in Codman Square, in Dorchester (Boston), where my mother grew up and saw the neighborhood go from Jewish to Irish to black, and drug deals and murders not uncommon. She did not believe in white flight, and doubled down and bought the two family three doors down for $16,000 in the late 80s. As a college freshman, she had me peel layer after layer of wall paper off walls at that property; she had a plasterer come in who told me, off to the side, that she was crazy and he could not understand what she was doing in such a dangerous neighborhood. When she died my mom and my uncles sold that property for $250k, it is now worth $800k. She is having the last laugh.
Scarcity of land and high demand has made the Boston area go from cheap to expensive. This dynamic will eventually hurt Boston IMO, and make places like Chicago with homes in all price ranges more in demand.
Probably not in our lifetime, but yes.
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