BELMONT CRAGIN HOUSING STUDY

Transcription

1 BELMONT CRAGIN HOUSING STUDY June 2016 Draft for Review Nathalie P. Voorhees Center for Neighborhood and Community Improvement

2 CONTENTS BACKGROUND... 1 KEY FINDINGS... 2 ABOUT THE COMMUNITY... 3 CURRENT RESIDENTS... 5 HOUSING MARKET CONDITIONS... 9 Housing characteristics... 9 Housing Costs and Affordability Housing Activity NEIGHBORING COMMUNITIES Housing Market Indicators COMPARABLE COMMUNITY CONDITIONS Housing Market Indicators RESPONDING TO HOUSING DEMAND AND NEED Young Families Empty Nesters (or soon to be) Senior Citizens Potential External Demand: Nearby Renter Households (Age 25-44) APPENDIX... 45

3 BACKGROUND The North West Side Housing Center (NWSHC) asked the Nathalie P. Voorhees Center for Neighborhood and Community Improvement (Voorhees Center) to conduct a housing study for Belmont Cragin (Community Area 19 in Chicago). This study will inform the development of a Quality of Life Plan that is underway for the area with support from the Local Initiative Support Corporation (LISC). The Northwest Side Housing Center is a community-based, nonprofit organization that engages, educates and empowers the community through housing counseling, financial education, community organizing, outreach, advocacy and supportive services. NWSHC is working in collaboration with community stakeholders and LISC to complete the Quality of Life plan. LISC is a national organization that works with key local players to take on pressing challenges and to equip struggling communities with the capital, strategy and know-how to become places where people can thrive. It has over 30 years experience investing in housing, health, education, public safety and employment. Its toolkit includes loans, grants, equity investments and on-the-ground experience in some of America s neediest neighborhoods. The Voorhees Center, a unit in the college of Urban Planning and Public Affairs at the University of Illinois at Chicago (UIC), is a dynamic resource center that engages residents, leaders, and policymakers seeking effective strategies for advancing community livability and vitality. Since its founding in 1978, the Center has worked collaboratively with a diverse set of partners to provide technical assistance, conduct research, and generate new knowledge in comprehensive community development and neighborhood quality-of-life issues. Grounded in the idea that all individuals have a right to such amenities as quality housing, education, jobs, transportation and safety to lead decent and productive lives, the Center strives to empower community residents and stakeholders and provides them with tools to pursue equitable futures. Key Voorhees Center staff (Co-Directors Janet smith and Yittayih Zelalem, Economic Development Planner Lauren Nolan, Research Associate Zafer Sönmez and Research Assistant Christophe Valcourt) participated in this project. A broad range of data covering area demographics, housing market conditions and housing demand and supply has been compiled for Belmont Cragin as well as neighboring and comparable communities. NWSHC interns have also conducted visual assessment of area housing conditions. Information gathered by the Voorhees Center has been shared and discussed with NWSHC staff and the Housing Committee for the Quality of Life Plan during four meetings held between January and May Feedback received at these meetings was used to refine the study. This report is a synthesis of comprehensive data and information gathered on Belmont Cragin, and substantially informed by feedback and comments received from key community stakeholders in this interactive process. This is a significant compilation of housing and related information for Belmont Cragin, and we are hopeful that what is contained in this report and the information shared during the study process provides valuable insight to the Quality of Life Plan as it is implemented. 1

4 KEY FINDINGS Population and Demographic Trends Growth in population (+1.2%; 79,069 people) from but not the number of households (-345; 21,506 households) in the same period Large proportion of family households (78% compared to 55% in Chicago) Large proportion of children under age of 18 (29% compared to 22% in Chicago) Growth in household size (from 3.56 in 2000 to 3.65 persons in 2014; Chicago decreased to 2.58 in 2014) Income erosion (real decline from $61,343 in 2000 to $43,104 in 2014, 29.7% decrease) Tenure is evenly split (49.1% owners, 50.9% renters) Housing Market Supply Larger share of single family, both rental and owned (43% compared to 27% in Chicago) Greater share of units with 3 or more bedrooms (26% rental and 67% owned compared to 24% and 60% respectively in Chicago) Belmont Cragin represents a middle market for home buyers (median home value is $206,828 compared to $229,461 in Chicago) Rents have increased modestly (median rent rose 8% since 2000 to $924 compared to 16% increase in Chicago to $979) Housing prices have not yet recovered (median sales prices currently are $30,000-50,000 below city median; in 2005, median prices had been $50,000-75,000 above the city median) Housing cost burden is widespread among both owners (59%; Chicago is 50%)and renters (58%; Chicago is 50%) and it has worsened (34% of renters and 45% of owners burdened in 2000) Market Activity Mortgage originations are beginning to pick up (tracking with Chicago at 7-8 loans per 100 parcels; still well below 2005 peak of 40 loans per 100 parcels) Sales volumes also increasing since 2008 (averaging single family homes and unit buildings annually; about 3% of total units per year) Prices still lag (11% below city median in 2014 compared to 10% above city median in 2000) Business buyer activity uptick post-housing crash (17% in 2014 compared to 3% in 2005) Market Distress and Recovery Recovery from the foreclosure crisis is underway (foreclosure filings down to pre-recession levels), yet properties remain in the pipeline (nearly 200 homes sold at auction in 2014 compared to less than 10 in 2005) Properties are moving, but share of distressed sales remains high (32% compared to 20% in Chicago; less than 10% in 2005) Abandoned properties have decreased to fewer than 100, but still evident in the community Building and demolition permits are much lower (about 10 each in ) than in neighboring communities; new construction is heaviest in Logan Square West Town 2

5 ABOUT THE COMMUNITY Located on Chicago s northwest side, Belmont Cragin is one of Chicago s largest community areas that offers a mix of housing, retail, industry and active manufacturing. Overall, it is well resourced with many amenities especially for families including several high performing schools that, based on the high enrollments in some, are in high demand. Transit options include several CTA bus lines and the Metra, which can be advantageous if traveling to some suburban locations but can make transit usage time consuming or costly if traveling downtown for work. Retail and Groceries Belmont Cragin is served by 28 food stores and markets which consist of 3 national chains, 4 local or regional chains, and 21 independent stores (several of these being ethnic markets serving the local Hispanic/Latino population). The neighborhood is additionally served by a number of convenience and liquor stores. Brickyard Mall is one of the main shopping centers on the western edge of the neighborhood, with 41 anchor tenants meeting residents and visitors needs for dining, clothing, grooming, and health care. Hall Plaza is a smaller shopping center on the neighborhood s eastern edge, with 16 anchor tenants. Additionally, the main commercial corridors of Fullerton, Diversey, Belmont, Grand, Cicero, and Central Avenue offer a variety of chain and independent restaurants, bakeries, auto parts and auto repair shops, banks, and clothing stores. Transportation Belmont Cragin is served by multiple CTA bus lines along its main corridors. It is served by the 54 Cicero bus, the 65 Grand bus, the 74 Fullerton bus, the 76 Diversey bus, the 77 Belmont bus, the 85 Central bus, the 86 Narragansett bus, and the 91 Austin bus. The neighborhood also has access to the Milwaukee District-West Metra rail line on its southern border. The rail line has stations at Galewood, Hanson Park, and Grand/Cicero. Libraries and Schools Belmont Cragin is served by 1 public library, the Chicago West Belmont Library, in the neighborhood s northwest corner. Belmont Cragin has 16 schools within its borders. It has 12 elementary schools, 1 middle school, and 3 high schools. Ten schools are Level 1 schools (with 4 of them being Level 1+). Five schools are Level 2 schools (with 3 of them being Level 2+). A level 1 school is a school in Excellent Standing, a Level 2 school is a school in Good Standing, and a Level 3 school is a school on Probation. 1 One school did not receive a rating. Twelve schools in Belmont Cragin are overcrowded, or have a population greater than 600 students, and 6 of the elementary schools have more than 1,000 students. Two schools (1 elementary, 1 high school) offer city-wide admission, 4 of the schools are charter schools (3 elementary, 1 high school), and the remaining are neighborhood schools. (Figure 1) 1 3

6 Health Care Belmont Cragin is served by 1 City of Chicago Primary Care Community Health Center (PCC Salud Family Health Center). It is also served by a number of smaller health clinics that offer a range of services, from promoting general health to addressing more specialized needs. The neighborhood is served by 15 dental clinics, 9 general care/primary care clinics, 2 skin care clinics, 4 eye-care clinics, and 4 clinics addressing bone health and foot health. The neighborhood is also served by 14 pharmacies, the majority of them run by national chains such as Walgreens and CVS. No major hospitals exist within the neighborhood s borders (see Figure 1). Recreation Belmont Cragin is served by 4 parks. Riis Park is the largest one at 56 acres and provides a field house, pool, tennis courts, soccer fields, and an ice rink. Cragin Park offers a playground, tennis courts, a basketball and volleyball court, and a soccer-football field. Blackhawk Park provides a field house, soccer-football field, tennis courts, baseball and softball fields, and a basketball-volleyball court. Aiella Playlot Park is the neighborhood s smallest park and only offers a playground (see Figure 1). Figure 1 Location of Amenities in Belmont Cragin Source: CA_BELMONT_CRAGIN.pdf 4

7 CURRENT RESIDENTS Belmont Cragin is a diverse community with young families with children, empty nesters and aging households. While primarily Latino, the history as a home to different ethnic and immigrant groups is evident in the storefronts, which cater to many outside the community as well as within. Population and Age Distribution While the city of Chicago experienced a nearly 7 percent drop in its population between 2000 and 2014, Belmont Cragin s population rose slightly (1.2%) to 79,069 in As one of the larger community areas in the city, 29.4 percent of its population is under the age of 18 while about 8 percent of the population is over the age of 65. These rates have not really changed since Compared to the city, the age distribution makes this community younger overall (see Figure 2). Figure 2 Age Distribution, % 20.0% 15.0% 10.0% 5.0% Age Distribution 0.0% Under 5 5 to 9 10 to to to to to to to to to and older Belmont Cragin Chicago Source: American Community Survey (2014) Race and Ethnicity In 2014, nearly half (48.7%) of the population identified as some other race while 42.5 percent identified as white. Of the remaining, 4 percent were black, 1.7 percent Asian, 0.2 percent American Indian/Alaska Native, and 2.9 percent were two or more races. Four out of five people in Belmont Cragin (79.4%) identified their ethnicity as Hispanic or Latino -- a 14.1 percent increase since In addition to an increasing share of Hispanic/Latino residents, the number of African American residents and residents who identified as some other race also increased. 5

8 Household Type and Size Despite the increase in population, Belmont Cragin saw a slight decline in the number of households, dropping from 21,851 in 2000 to 21,506 in The neighborhood appears to have followed a citywide trend in the declining number of households (the number of households in Chicago fell by 3%), albeit not as steep. The decline was particularly marked in the number of family households, which fell from 17,159 in 2000 to 16,738 in (Figure 3) The neighborhood saw a 9.1 percent decline in the number of married-couple families, but saw increases in the percentage of singlefemale-headed families and single-male-headed families by 4 percent and 4.5 percent respectively. Still, the average family size grew from 3.56 to 3.66 persons per household, which was not the case in Chicago, where it dropped from 2.67 to Figure 3 Family and Non-Family Households, 2014 Belmont Cragin Chicago 22% 45% 55% 78% Family Households Non-Family Households Family Households Non-Family Households Source: American Community Survey (2014) The number of nonfamily households increased between 2000 and 2014, from 4,692 to 4,768. The proportion of households that were headed by single females increased by 1.4 percent during that time period while the proportion headed by single males fell by 0.7 percent. The city of Chicago similarly saw decreases in the number of family households and increases in the number of nonfamily households between 2000 and And Belmont Cragin s concurrent increase in population and decrease in family households has led to an 11.8 percent increase in single person non-family households, up from 3,575 in 2000 to 4,012 in

9 Households by age of householder Compared to Chicago, Belmont Cragin s households are somewhat similarly distributed when grouped by age of householder (person at least 15 years old and in whose name the housing unit is rented or owned), with a smaller cohort of very young and older households (Table 1). The largest share of households in Belmont Cragin are younger, headed by someone who is between 25 and 44 years of age followed by those who are between frequently referred to as empty nesters since often their own children are no longer living with them in the family home. Table 1 Distribution of Households by Age of Householder, 2014 Householder Age Number Percent (City) Less than 25 years % (4.3%) years 9, % (43.3%) years 8, % (34.3%) 65 years and above 3, % (18.1%) Source: American Community Survey (2014) Income Belmont Cragin saw a significant decline in its median household income, from $61,343 in 2000 to $43,104 in 2014, a 29.7 percent decrease. In comparison, at the city level the median household income fell by 14.8 percent from $54,899 to $47,831. Notably, Belmont Cragin s median household income was higher than the city median in 2000 and ended up lower than the city median in 2014 (see Figure 4). Broken down along racial-ethnic groups in the community, all households except Asians experienced a decline in median household income between 2000 and The largest declines in dollar amounts were for African American households (-$29,213), those households identifying as some other race (-$28,662), and those households identifying as Hispanic or Latino (-$23,081). In addition to the decline in median household income, the proportion of families whose income was less than $40,000 increased from 23.9 percent in 2000 to 42.7 percent in (Figure 4) The neighborhood also saw a significant increase in the proportion of households with incomes below the poverty level, from 9.4 percent to 19.2 percent. At the city level, the percentage of families with incomes below $40,000 increased from 32.4 percent in 2000 to 38.5 percent in 2014 while the poverty rate for families increased from 16.6 percent to 18.7 percent. As with median household income, Belmont Cragin originally had a lower poverty rate and lower share of low-to-moderate income residents than the city in 2000, but saw higher figures than the city in

10 Figure 4 Income Distribution, % 20% 15% 10% 5% 0% Income Distribution Belmont Cragin Chicago Source: American Community Survey (2014) One notable finding was that the neighborhood saw its largest decline in the number of households who earned more than $75,000 and less than $100,000, from 3,597 in 2000 to 2,069 in 2014, a drop of 73.9 percent. The city of Chicago only dropped 21 percent. Employment Belmont Cragin saw an increase between 2000 and 2014 in the number of individuals over 16 who were in the labor market, from 34,697 to 39,705, a 7.2 percent increase. The percentage of residents who were employed increased 2 percent between 2000 and During that same time period, the number of unemployed residents more than doubled from 2,527 to 5,652. These figures follow citywide trends, although the proportion of citywide unemployed residents grew at a slower rate than in Belmont Cragin (37.6% versus 123.7%). In 2014, the four industries in which the highest proportion of residents was employed were manufacturing (21.7%), educational services, health care, and social assistance (14.1%), retail trade (12.9%), and arts/entertainment/accommodation/food services (12.4%). Between 2000 and 2014, manufacturing saw its share of employed residents decline by 5.7 percent while the other three industries saw their shares of employed residents increased by 2.2 percent, 2.2 percent, and 4.6 percent respectively. Educational attainment In 2014, 38.8 percent of the population had less than a high school education, a decrease from 41.4 percent back in The percentages of residents increased slightly for those attaining a high school degree or higher. In 2014, 29.9 percent of Belmont Cragin residents had only completed high school. Of the remaining, 15.3 percent have some college education, 7.7. percent have obtained a bachelor s, and 2.7 percent hold a master s degree. Citywide trends show the share of Chicago residents with less than a high school degree had decreased while the share of those with a high school degree and higher had increased. 8

11 HOUSING MARKET CONDITIONS Housing characteristics Tenure mix Approximately half of Belmont Cragin households rent (49.1%) and half own their homes (50.9%), which was higher than in 2000 (44.7%) for the community but lower than the City in 2014(55.3%). The largest concentration of owners are located in census tracts on the east and west end of the community area while renters are generally central with the highest concentration in 3 southern tracts (see Figure 5). Figure 5 Distribution of Owner Occupied Units by Census Tract, 2014 Source: American Community Survey (2014) Number of units The number of rental units increased by nearly 1,000 since 2000 to 10,564, which was an 11 percent increase compared to the city where it dropped 4 percent. This is probably less due to new construction and more to conversions of owner occupied homes to rental properties. This is corroborated by the 12 percent reduction in owner occupied units, from 12,064 in 2000 to 10,564 in 2014, which was much higher than the modest 1 percent loss in Chicago. 9

12 Types of buildings Housing options are concentrated in small multifamily buildings (2-4 units; 43%) and single family homes (36%). (Figure 6) When compared to the city, Belmont Cragin has a greater share of both types and a much smaller share of large multifamily rental buildings and condominiums. Figure 6 Type of Housing Structure, 2014 Belmont Cragin City of Chicago 18% 36% 27% 26% 43% 3% 27% 20% Single Family Condo 2-4 Units 5+ Units Single Family Condo 2-4 Units 5+ Units Source: American Community Survey (2014) Unit Sizes Belmont Cragin has a greater share of larger units 2 bedrooms or more when compared to the city for both renter and owner occupied units. In 2014, 52 percent of rental units were 2 bedrooms and 22 percent were 3 bedrooms (the city is 36% and 19% respectively) (see Figure 7). In owner occupied units, the distribution for 2 and 3 bedroom units is similar to Chicago; however, Belmont Cragin has proportionally more 4 bedrooms (17%) and 5+ bedrooms (13%) units than the city (14% and 7% respectively) (see Figure 8). Across both tenure types, Belmont Cragin housing is more accommodating to families with children than the city. In general, there is little evidence of overcrowding among renters or owners, with about 1 percent of each living in a unit with more than 1.5 persons per room (US Census definition of overcrowding). 10

13 Figure 7 Rental Units by Bedroom Size, 2014 Belmont Cragin 2% 2% 4% 22% 19% No bedroom 1 bedroom 19% Chicago 4% 1% 10% 2 bedrooms 3 bedrooms 30% 4 bedrooms 52% 5 or more bedrooms 36% Source: American Community Survey (2014) Figure 8 Owned units by Bedroom Size, 2014 Belmont Cragin 0% 2% Chicago 1% 13% No bedroom 14% 7% 8% 17% 30% 1 bedroom 2 bedrooms 31% 3 bedrooms 37% 4 bedrooms Source: American Community Survey (2014) 39% 11

14 Housing Costs and Affordability Median rent and home value Overall, the cost of housing in Belmont Cragin is below the city median for home values and gross rent (see Table 2 and 3). In both cases, Belmont started above the median in The lower cost of housing is evident in the rent and housing value distributions shown in Figures 9 and 10, which are both skewed to the left where rents and values are lower. Table 2 Median Home Value (in 2014 inflation-adjusted dollars) Location % Change Belmont Cragin $217,697 $206,828-4% Chicago $198,448 $229,461 16% Source: U.S. Census (2000). American Community Survey (2014); monetary values are in 2014 dollars Table 3 Median Gross Rent (in 2014 inflation-adjusted dollars) Location % Change Belmont Cragin $854 $924 8% Chicago $847 $979 16% Source: U.S. Census (2000). American Community Survey (2014); monetary values are in 2014 dollars Figure 9 Renter Occupied Units by Gross Rent, 2014 Units by Gross Rent 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Less than $300 $300 - $599 $600 - $799 $800 - $999 $1,000 - $1,249 $1,250 - $1,499 $1,500 - $1,999 $2,000 or more Belmont Cragin Chicago Source: American Community Survey (2014) 12

15 Figure 10 Owner Occupied Units by Home Value, % 60% 50% 40% 30% 20% 10% Home Value 0% Less than $20k $20k - $50k $50k - $100k $100k - $150k $150k - $300k $300k - $500k $500k %750k $750k - $1M $1M or more Belmont Cragin Chicago Source: American Community Survey (2014) Housing Affordability Although housing costs are lower than the city, the proportion of renters and owners that are cost burdened is higher with 59 percent of renters and 58 percent of renters paying more than 30 percent of income for their housing, the standard used to determine housing cost burden (see Figure 11 and 12). In comparison, the rate for both renters and owners in Chicago is 50 percent, which is higher than the state of Illinois and the national averages for both. Figure 11 Gross Rent as a Percentage of Income, % 50% Gross Rent as a % of Household Income 53% 40% 30% 20% 35% 29% 30% 18% 17% 10% 0% 8% 2% Less than 10% 10% - 29% 30% ot 49% 50% or more Source: American Community Survey (2014) 13

16 Figure 12 Owner Costs as a Percentage of Income, % 56% Owner Costs as a % of Household Income (with a mortgage) 50% 40% 30% 41% 29% 31% 28% 20% 10% 0% 14% Less than 30% 30% - 50% More than 50% Source: American Community Survey (2014) Mortgage debt The proportion of homeowners with mortgages in Belmont Cragin rose from 72 percent in 2000 to 78 percent in 2014, a rate that is above the city (71%). Of these mortgage holders, half have a home loan value to income ratio of 3.0 or higher, with most at 4.0 (35%), which is above the city average, and higher than the national average of 3.3 (and which is higher than the pre-recession 50 year average of 2.2). 2 This means that at least half of the owners in Belmont Cragin may not be able to afford their mortgage. In addition to families having mortgages they may not be able to afford, an estimated 1,173 homeowners have homes that are valued above $250,000 and income below $50,000, which could cause hardship should property taxes increase. 2 See 14

17 Figure 13 Loan Value to Income Ratio, 2014 Loan Value to Income Ratio (with a mortgage) 40% 35% 30% 25% 20% 15% 10% 5% 0% Less than to to or more Belmont Cragin City of Chicago Source: American Community Survey (2014) Housing Activity Sales Prices As the city of Chicago recovers in the wake of the housing and foreclosure crisis, so does Belmont Cragin, though not as quickly, as will be discussed in the next two sections. Still, Belmont Cragin is a middle market from a housing market standpoint, representing many rental and for-sale options for middle-income families. Pre-recession, the community was on a trajectory that might have moved it into higher income brackets based on median sales prices, which in 2006 were $50,000-75,000 above the city median. However, that has shifted, and median sales prices are now $30,000-50,000 lower than the city median at the start of 2016 (see Figure 14) Based on annual sales in Belmont Cragin, the volume (number of sales) is increasing toward prerecession levels but is still half the volume at the 2005 peak (see Figure 15) Looking at this volume relative to the city, Belmont Cragin mortgage originations were actually higher than Chicago in 2005 based on a per 100 parcel rate, but then dropped and have tracked about the same as the city postrecession (see Figure 16). Looking at sales per 100 parcels, Belmont Cragin was about the same as the city in 2005, but then dropped below the city rate during the recession. While the rate of sales has picked up again, the drop in 2013 may indicate some stalling out in Belmont Cragin s recovery (see Figure 17). Most sales have been of single-family homes (see Figure 18). Interestingly, since the recession, there has been a steady disposition of 2-4 unit buildings averaging nearly 200 buildings a year. Unlike other parts of the city, condominiums have not been a significant portion of the market activity (with the exception of 2006). 15

18 Figure 14 Sales price for Belmont Cragin Source: Trulia.com 3 Trulia divides Belmont Cragin down Central Avenue into Belmont Central and Cragin. 16

19 Figure 15 Total units sold annually, ,500 3,000 2,500 Belmont Cragin - Units Sold Units 2,000 1,500 1, Year Source: Record Information Services Figure 16 Mortgage Originations per 100 Residential Parcels, Mortgage Originations per 100 Residential Parcels Chicago Belmont Cragin Source: IHS Calculations of Data from County Recorder of Deeds via Property Insight, County Assessor's Offices 17

20 Figure 17 Sales per parcel per 100 Residential Parcels, Sales per 100 Residential Parcels City of Chicago Total Belmont Cragin Source: IHS Calculations of Data from County Recorder of Deeds via Property Insight, County Assessor's Offices Figure 18 Sales by property type Sales by Property Type Single Condo 2 to 4 5 or more Source: IHS Calculations of Data from County Recorder of Deeds via Property Insight, County Assessor's Offices 18

21 Figures tell a story of the housing crisis that began with huge sales volumes in coupled with rapidly rising prices, then a crash. Belmont Cragin sales rebounded more quickly, but that is less indicative of a strong market and more indicative of short sales, distressed sales, etc. As of 2013, the data suggests the Belmont Cragin market is getting back to normal. However, this is qualified when we look at the types of sales and in relation to foreclosures. Foreclosures A positive trend in foreclosure filings suggests that Belmont Cragin is moving in the right direction, nearing the same rate per 100 parcels as the city in 2014 after a difficult 7 years of more than double rates (see Figure 19). Overwhelmingly, the largest share of foreclosed homes in 2014 was single family (67%) followed by small rental buildings with 2-4 units (28%) (Table 4). Foreclosures sold at auction are another indicator of market stress, which has gone down in 2014 from its peak in 2010 and after a drop and another rise in While this trend suggests Belmont Cragin is moving toward recovery, this rate is still well above its 2005 rate, which was near zero. (Figure 20) Furthermore, the proportion of sales that are distressed (i.e., foreclosure filings and auctions) has continued to drop post-recession. The 2014 rate of 31 percent is still 10 percent higher than the city of Chicago and 3 times the pre-recession rate in (Figure 21) Figure 19 Foreclosure Filings Foreclosure Filings per 100 Parcels City of Chicago Total Belmont Cragin Source: IHS Calculations of Data from County Circuit Courts via Property Insight, Record Information Services, County Assessor's Offices Table 4 Distribution of Foreclosure Filings by Type of Structure, 2014 % of Housing Stock % of Foreclosure Filings Building Type: Belmont Cragin Chicago Belmont Cragin Chicago Single Family 36% 26% 67% 55% Condos 3% 20% 3% 18% 2-4 Units 43% 27% 28% 24% 5+ Units 18% 27% 2% 3% Source: IHS Calculations of Data from County Recorder of Deeds via Property Insight, County Assessor's Offices 19

22 Figure 20 Foreclosures Sold at Auction, Belmont Cragin Foreclosure Auctions Auctions Year Source: IHS Calculations of Data from County Recorder of Deeds via Property Insight, County Assessor's Offices Figure 21 Share of Distressed Sales, % Share of 'Distressed' Sales 70% 60% 50% 40% 30% 20% 10% 0% Chicago Blemont Cragin Source: IHS Calculations of Data from County Recorder of Deeds via Property Insight, County Assessor's Offices 20

23 Investment A trend to watch in Belmont Cragin is the rise of investors or business buyers of residential property, which has increased post-recession and was nearly 30 percent of single-family sales in 2013 (which also was a peak in foreclosure auctions) (see Figure 22). These units may have been bought either to re-sell for profit or to rent out to families, which is more likely given the drop in owner-occupied units since Figure 22 Percent of Sales to Business Buyers 30% Single Family Sales to Business Buyers 25% 20% 15% 10% 5% 0% Belmont Cragin Chicago Source: IHS Calculations of Data from County Recorder of Deeds via Property Insight, County Assessor's Offices Vacancy, Demolition and New Construction Another measure of market health is vacancy rates. Long term vacancy (a unit that is vacant for 24 months or more) is low in Belmont Cragin compared to Chicago (see Figure 23). However, figures have been creeping up, likely resulting from the foreclosure crisis and may include some investorbought housing that is being held off market waiting for higher sales price potential. A positive trend is the drop in 311 Vacancy/Abandonment calls after a spike during the foreclosure crisis. The trends in Belmont Cragin track that of the city average per community area (see Figure 24). Looking at the data mapped out, while not completely evenly distributed, vacancy and abandonment data based on these calls is not concentrated in any one area (see Figures 25-26). Finally, looking at permits for both demolition and new construction, while there is not much activity in Belmont Cragin, there is a lot of demolition to the south in Austin and Humboldt Park (see Figure27), and a lot of new construction to the east in Logan Square and West Town (see Figure 28). These data suggest there may be development pressures moving toward Belmont Cragin in the near future. 21

24 Figure 23 Long-term Vacancy 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Long Term Vacancy Rate (24+ months) 0.0% Chicago Belmont Cragin Source: IHS Calculations using data from US Housing and Urban Development and US Postal Services Figure 24 Number of 311 Vacancy/Abandonment Calls, Vacancy/Abandonment Calls Belmont Cragin Chicago Community Area Average Source: City of Chicago Data Portal, chicagobuildings.org 22

25 Figure 25 Vacancy and Abandonment, Open Boarded Unknown Source: City of Chicago Data Portal, chicagobuildings.org Figure 26 Vacancy and Abandonment, Open Boarded Unknown Source: City of Chicago Data Portal, chicagobuildings.org 23

26 Figure 27 Demolition Permits, Source: City of Chicago Data Portal, chicagobuildings.org Figure 28 New Construction Permits, Source: City of Chicago Data Portal, chicagobuildings.org 24

27 NEIGHBORING COMMUNITIES Belmont Cragin has seen a decline in median household income and a significant increase in poverty the last 10 to 15 years. These changes have important implications for housing affordability as evidenced by the increase in cost burdened renter households (up 23% from 2000). Although these changes are partially a reflection of city-wide trends, we also hypothesize that increased cost burden and declining median household income in Belmont Cragin could be driven, at least partially, by changes taking place in its surrounding communities. To explore this possibility, we examine economic and housing market conditions in 8 adjacent community areas (Austin, Avondale, Dunning, Hermosa, Humboldt Park, Irving Park, Montclare and Portage Park) and 2 nearby (Logan Square and West Town) because of their size and close proximity to Belmont Cragin (see Figure 29). Figure 29 Adjacent and Nearby Communities Economic conditions in most neighboring communities were marked by a decline in household income and an increase in the poverty rate from 2000 to 2014 with the exception of Logan Square and West Town (see Table 5). Only two communities experienced sharper decline in household income: Montclare and Austin. Hermosa shows a similar trend while other neighboring community areas experienced smaller changes. Although Dunning and Montclare experienced higher growth in poverty than Belmont Cragin, these communities poverty rates are not as high as that of Belmont Cragin in 2014 or in previous years. 25

28 Table 5 Income and Poverty Rate in Neighboring Communities Household Income Poverty Rate Community Change ( ) Change ( ) Belmont $59,056 $47,307 $43, % 11.2% 20.5% 21.1% 87.3% Cragin Portage Park $62,659 $56,558 $55, % 8.0% 14.6% 14.6% 82.6% Irving Park $58,407 $59,945 $50, % 11.3% 11.2% 13.9% 23.4% Dunning $67,943 $67,012 $60, % 5.2% 7.7% 11.0% 112.6% Montclare $65,177 $52,519 $41, % 5.6% 11.6% 14.7% 162.9% Hermosa $51,641 $46,271 $37, % 16.7% 19.9% 22.0% 31.8% Avondale $50,015 $51,210 $44, % 17.4% 15.7% 19.2% 10.2% Logan Square $50,983 $58,121 $61, % 19.7% 21.3% 19.4% -1.4% Humboldt Park $38,977 $32,657 $33, % 31.1% 32.7% 34.4% 10.5% West Town $55,190 $70,559 $73, % 20.9% 17.6% 15.8% -24.4% Austin $47,436 $37,243 $33, % 24.1% 27.7% 32.2% 33.4% City of Chicago $53,103 $55,209 $53, % 19.5% 20.8% 22.6% 16.1% Source: U.S. Census (2000). American Community Survey (2010 and 2014). Monetary values are in 2014 dollars. Except for Logan Square and West Town, median rents and increases in rent levels in neighboring communities appear to be very similar to the rates observed in Belmont Cragin (Table 6). In comparison, while Logan Square and West Town experienced the highest increase in rental rates, both had the smallest change in renter housing cost burden. These data suggest that either existing households in these communities started earning more income or existing renters were replaced by renters with higher incomes. Assuming the latter, households that left might have moved into Belmont Cragin and other neighboring communities, which may partially explain declining income and/or increased cost burden in those communities. Compared to the City as a whole, a slightly larger share of Belmont Cragin housing units is owneroccupied in 2014 (see Table 7). However, unlike the City, the community experienced decline in owner occupied housing units over time, from 55 percent to 49 percent over the decade. Similar to this trend, several neighboring communities also experienced decline in owner occupied units and an increase in renter households. The exceptions were Irving Park, Avondale, Logan Square and West Town. 26

29 Table 6 Rent and Renter Housing Cost Burden in Neighboring Communities Median Gross Rent Renter Housing Cost Burden Community Change ( ) Change ( ) Belmont $859 $962 $ % 34.0% 57.1% 58.6% 72.3% Cragin Portage Park $877 $975 $ % 32.7% 47.6% 44.3% 35.4% Irving Park $874 $998 $ % 31.6% 43.8% 46.8% 48.2% Dunning $966 $990 $ % 30.9% 45.0% 48.6% 57.1% Montclare $913 $942 $ % 30.9% 53.7% 53.4% 72.8% Hermosa $815 $971 $ % 38.9% 57.9% 65.6% 68.7% Avondale $833 $961 $ % 35.4% 45.8% 48.8% 37.8% Logan Square $894 $1,031 $1, % 37.8% 45.2% 45.0% 19.0% Humboldt Park $791 $983 $ % 46.4% 58.0% 55.3% 19.2% West Town $934 $1,155 $1, % 36.1% 40.9% 39.5% 9.5% Austin $806 $927 $ % 43.2% 61.0% 61.8% 43.1% City of Chicago $847 $997 $1, % 37.9% 50.2% 49.9% 31.8% Source: U.S. Census (2000). American Community Survey (2010 and 2014). Monetary values are in 2014 dollars. Table 7 Housing Tenure in Neighboring Communities Owner Occupied Community Change ( ) Renter Occupied Change ( ) Belmont 55.3% 50.5% 49.1% -11.1% 44.7% 49.5% 50.9% 13.7% Cragin Portage Park 57.0% 57.1% 55.8% -2.1% 43.0% 42.9% 44.2% 2.8% Irving Park 41.1% 51.4% 45.0% 9.4% 58.9% 48.6% 55.0% -6.6% Dunning 79.8% 78.6% 74.5% -6.7% 20.2% 21.4% 25.5% 26.6% Montclare 66.7% 62.4% 56.4% -15.4% 33.3% 37.6% 43.6% 30.9% Hermosa 44.9% 46.3% 39.6% -11.9% 55.1% 53.7% 60.4% 9.7% Avondale 37.4% 46.3% 38.4% 2.7% 62.6% 53.7% 61.6% -1.6% Logan Square 30.8% 38.0% 37.8% 22.9% 69.2% 62.0% 62.2% -10.2% Humboldt Park 37.6% 34.3% 35.3% -6.0% 62.4% 65.7% 64.7% 3.6% West Town 28.9% 40.4% 37.8% 30.8% 71.1% 59.6% 62.2% -12.6% Austin 42.9% 40.9% 39.1% -8.9% 57.1% 59.1% 60.9% 6.7% City of Chicago 43.8% 48.0% 44.9% 2.5% 56.2% 52.0% 55.1% -2.0% Source: U.S. Census (2000). American Community Survey (2010 and 2014). 27

30 From 2010 to 2015, in parallel with city-wide trends, home values declined in all neighboring communities (see Table 8) However, some communities experienced a greater drop in home values than others. Among the neighboring communities, only Hermosa experienced greater decline than Belmont Cragin. Similarly, the share of home owners that spend 30 percent or more of their household income on mortgage is comparable to neighboring communities (except for Logan Square and West Town). Although more than half of the owners are cost burdened in Belmont Cragin, the share of cost burdened owners did not increase as much as it did in some neighboring communities and the city as a whole. Table 8 Home Values and Owner Housing Cost Burden in Neighboring Communities Home Value Owner Housing Cost Burden Community Change ( ) Belmont Cragin Change ( ) 204, , , % 42.5% 67.9% 58.4% 37.4% Portage Park 219, , , % 34.7% 57.6% 53.1% 53.1% Irving Park 241, , , % 33.3% 52.6% 46.8% 40.7% Dunning 210, , , % 37.6% 52.4% 47.1% 25.2% Montclare 205, , , % 37.6% 61.7% 59.1% 57.2% Hermosa 189, , , % 37.5% 69.3% 62.0% 65.5% Avondale 227, , , % 39.1% 66.2% 59.7% 52.8% Logan Square 287, , , % 35.8% 49.2% 43.1% 20.3% Humboldt Park 148, , , % 48.9% 70.0% 63.3% 29.4% West Town 329, , , % 27.7% 45.1% 35.0% 26.3% Austin 153, , , % 39.8% 60.6% 57.6% 44.6% City of Chicago 207, , , % 27.8% 49.5% 44.0% 58.1% Source: U.S. Census (2000). American Community Survey (2010 and 2014). Monetary values are in 2014 dollars. Housing Market Indicators Two neighboring communities (Austin and Humboldt Park) show higher foreclosure rates than Belmont Cragin while two communities (Hermosa and Montclare) show a very similar foreclosure rate to Belmont Cragin (see Figure 30). However, looking at the ratio of current year foreclosure filings to previous year filings in neighboring communities shows that more recent conditions in Belmont Cragin are not that different from most neighboring communities (see Figure 31). 4 Overall, foreclosure filings are in decline in the last five years although there has been a slight increase in Note that 1 indicates that foreclosure filings or sales in the current year is the same as previous year. Figures greater than 1 indicate the current year is greater than the previous year. Figures smaller than 1 indicate that the current year is less than the previous year. This standardization was necessary for the purpose of comparison due to different sizes of local housing markets. 28

31 While Belmont Cragin has a proportionally larger number of distressed property sales than most neighboring communities and the city as a whole, distressed sales are higher in Austin and Humboldt Park (see Figure 32). As noted earlier, a declining share of distressed property sales can be interpreted as an indicator of local housing market recovery, and relative to most neighboring communities, the pace of recovery in Belmont Cragin appears similar. With few exceptions, there has been little change in the amount of property sales in Belmont Cragin and in comparable communities over the last five years (see Figure 33; see footnote 4). In 2012 and 2013, Portage Park, Logan Square, and West Town experienced more sales activity compared to the previous years. In 2014 there has been a decline in property sales in Belmont Cragin and in all neighboring communities. Figure 30 Foreclosure Rates in Neighboring Communities 14.0% Foreclosure Rates in Neighboring Communities 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Source: Institute for Housing Studies at DePaul University. U.S. Census (2000). American Community Survey (2010 and 2014). The foreclosure rate represents the share of residential foreclosure filings in total housing units with a mortgage, contract to purchase, or similar debt. 29

32 Figure 31 Ratio of Current Year Foreclosure Filings to Previous Year Filings in Neighboring Communities, Ratio of current year foreclosure filings to previous year filings in Neighboring Communities, Source: Institute for Housing Studies at DePaul University. Figure 32 Share of Distressed Properties in Comparable Communities, % 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Share of Distressed Properties in Comparable Communities, Source: Institute for Housing Studies at DePaul University

33 Figure 33 Ratio of Current Year Property Sales to Previous Year Sales in Neighboring Communities, Ratio of current year property sales to previous year sales in Neighboring Communities, Source: Institute for Housing Studies at DePaul University Portage Park and Irving Park have vacancy rates very similar to that of Belmont Cragin (see Figure 34). All three have lower long-term vacancy rates than the City. Lower vacancy rates in Dunning and Montclare may be due to the fact that a greater share of housing units in these communities is owner occupied. 31

34 Figure 34 Long Term Vacancy in Neighboring Communities, % Long Term Vacancy in Neighboring Communities, % 4.0% 3.0% 2.0% 1.0% 0.0% 2013_Q1 2013_Q2 2013_Q3 2013_Q4 2014_Q1 2014_Q2 2014_Q3 2014_Q4 Source: Institute for Housing Studies at DePaul University. Analysis of economic indicators and housing market conditions in neighboring communities show that while some display a trend similar to Belmont Cragin, others do not. What distinguishes Belmont Cragin from neighboring communities is that it experienced the biggest increase in renter housing cost burden (along with Montclare) and a sharper decline in median household income (after Austin and Montclare). We next look at comparable communities for a different angle on Belmont Cragin. 32

35 COMPARABLE COMMUNITY CONDITIONS In this section we identify Chicago communities that are comparable to Belmont Cragin based on socio-economic status and demographic composition, and then examine whether or not these communities experienced similar changes as Belmont Cragin in the recent past using three points in time: 2000, 2010, and Identification of comparable communities can help community leaders better prepare for the future by monitoring trends in those similar communities, learn about novel practices or programs, and potentially engage in collaborative partnerships. We took a three-step approach to identifying comparable communities. First, we ranked all 77 communities in the city of Chicago using an index composed of 12 key socio-economic and housing indicators. These indicators include per capita income, unemployment rate, poverty rate, estimated home value, residential foreclosure rate, vacancy rate, crime incidents per thousand residents, educational attainment rate, professional workforce, share of female headed families, owner housing cost burden, and renter housing cost burden (see Appendix for the methodology and definitions of indicators). Although not exhaustive, these indicators are informed by relevant urban theory and community development practice and are believed to capture essential dimensions of residential well-being and neighborhood conditions. Figure 35 Comparable Communities Using the community ranking, we identified 4 communities that rank very close to Belmont Cragin: Archers Heights, Brighton Park, East Side, and Hermosa (see Figure 35). We then investigated whether or not they share other important common characteristics with Belmont Cragin that are not accounted for by our index variables. Namely, we looked at whether or not they have a similar (1) median household income, (2) median rent, (3) home value, (4) rate of owneroccupied housing units, (5) proportion of Latino population, and finally (6) distance from the city s central business district and cultural center (Loop). Brighton Park, East Side, and Hermosa are consistently similar to Belmont Cragin in three time periods while Archer Heights appears to be similar to Belmont Cragin in the last two periods (see 33

36 Tables 9-11). Two communities, McKinley Park and Avondale, show similar characteristics as Belmont Cragin in 2000, but positive changes in their index score in 2010 make them no longer comparable with Belmont Cragin. Table 9 Comparable Communities in 2000 Community Population Median HH Income ($) Belmont Cragin Median Rent ($) Home Value ($) Owner Occupied (%) Latino Pop. (%) 78,144 $59,056 $859 $222, % 79.5% East Side 23,653 $53,871 $708 $126, % 76.4% McKinley Park 15,962 $50,349 $751 $157, % 63.3% Avondale 43,083 $50,015 $833 $247, % 58.7% Hermosa 26,908 $51,641 $815 $205, % 81.2% Brighton Park 44,912 $49,996 $752 $175, % 86.2% City of Chicago 2,919,052 $53,103 $847 $207, % 26.0% Source: U.S. Census. Monetary values are in 2014 dollars. Table 10 Comparable Communities in 2010 Community Population Median HH Income ($) Belmont Cragin Median Rent ($) Home Value ($) Owner Occupied (%) Latino Pop. (%) 80,206 $47,307 $962 $328, % 78.9% Archer Heights 12,959 $48,294 $1,003 $281, % 76.0% East Side 25,216 $45,763 $833 $169, % 78.4% Brighton Park 44,160 $43,081 $848 $240, % 85.3% Hermosa 24,583 $46,271 $971 $340, % 87.4% City of Chicago 2,726,410 $55,209 $997 $325, % 28.9% Source: American Community Survey ( annual averages). Monetary values are in 2014 dollars. Table 11 Comparable Communities in 2014 Community Population Median HH Income ($) Belmont Cragin Median Rent ($) Home Value ($) Owner Occupied (%) Latino Pop. (%) 79,069 $47,049 $1,014 $223, % 79.4% Archer Heights 13,998 $47,177 $934 $206, % 75.6% East Side 23,739 $50,332 $866 $135, % 80.7% Hermosa 24,836 $41,040 $977 $223, % 89.3% Brighton Park 44,130 $38,781 $869 $182, % 85.0% City of Chicago 2,735,500 $57,724 $1,105 $277, % 28.9% Source: American Community Survey ( annual averages). Monetary values are in 2014 dollars. 34

37 Moving from these broad indicators, we then looked at housing market conditions in these comparable communities to see how similar they are to what we have observed in Belmont Cragin. Housing Market Indicators Relative to the city and comparable communities, the national housing market crash in 2008 appears to have had a more severe impact on Belmont Cragin (see Figure 36). Prior to the crisis, the foreclosure rate in Belmont Cragin, which is measured as the share of residential foreclosure filings in total housing units with a mortgage, was similar to rates observed in comparable communities and lower than the rate observed for the city. However, in 2010 and 2014 Belmont Cragin had the highest foreclosure rate among the comparable communities with only Hermosa displaying a similar trend. Figure 36 Foreclosures Rates in Comparable Communities Foreclosures Rates in Comparable Communities 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Belmont Cragin Hermosa East Side Archer Heights Brighton Park City of Chicago Source: Institute for Housing Studies at DePaul University. U.S. Census (2000). American Community Survey (2010 and 2014). Foreclosure rate represents the share of residential foreclosure filings in total housing units with a mortgage, contract to purchase, or similar debt. Examining the ratio of current year foreclosure filings to previous year filings in comparable communities shows that more recent conditions in Belmont Cragin are not considerably different from the comparable communities (see Figure 37). 5 Overall, foreclosure filings are in decline in the last five years, although there has been a slight increase in Note that 1 indicates that foreclosure filings or sales in the current year is the same as previous year. Figures greater than 1 indicate the current year is greater than the previous year. Figures smaller than 1 indicate that the current year is less than the previous year. This standardization was necessary for the purpose of comparison due to different sizes of local housing markets. 35

38 Figure 37 Ratio of Current Year Foreclosure Filings to Previous Year Filings in Comparable Communities, Ratio of current year foreclosure filings to previous year filings in Comparable Communities, Belmont Cragin Brighton Park East Side Hermosa City of Chicago Source: Institute for Housing Studies at DePaul University An increase in the volume of property sales is generally interpreted as a positive sign. With few exceptions, there has been little change in the amount of property sales in Belmont Cragin and comparable communities (see Figure 38). In 2014 there has been a decline in property sales in Belmont Crain and Hermosa. This should be monitored to determine if this decline was temporary (specific to 2014) or has continued into 2015 and The decline in the share of property sales that are (financially) distressed can be interpreted as an indication that the local housing market is recovering from the crisis. Relative to two of the comparable communities and the city, recovery appears to be slower in Belmont Cragin (see Figure 39). In the last four years, the community has a greater proportion of distressed property sales than Archer Heights, East Side, and the city as a whole. 36

39 Figure 38 Ratio of Current Year Property Sales to Previous Year Sales in Comparable Communities, Ratio of current year property sales to previous year sales in comparable communities, Belmont Cragin Brighton Park East Side Hermosa City of Chicago Source: Institute for Housing Studies at DePaul University Figure 39 Share of Sales of Distressed Properties in Comparable Communities, % Share of Sales of Distressed Properties in Comparable Communities, % 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Belmont Cragin Archer Heights Brighton Park East Side Hermosa City of Chicago Source: Institute for Housing Studies at DePaul University

40 Historically, the residential vacancy rate has been lower in Belmont Cragin relative to the city of Chicago (see Figure 40). Examination of long term vacancy rates in the last two years at a quarterly basis shows that this has been the case most recently as well. Two comparable communities, Archer Heights and Brighton Park, also display a relatively low vacancy rate. Figure 40 Long Term Vacancy in Comparable Communities, % Long Term Vacancy in Comparable Communities, % 3% 3% 2% 2% 1% 1% 0% Belmont Cragin Archer Heights Brighton Park East Side Hermosa City of Chicago 2013_Q1 2013_Q2 2013_Q3 2013_Q4 2014_Q1 2014_Q2 2014_Q3 2014_Q4 Source: Institute for Housing Studies at DePaul University. In sum, examining five basic housing market indicators in comparable communities shows that some market conditions in Belmont Cragin are not significantly different from comparable communities. However, as emphasized by the Housing Planning Committee and as evident in the data, the housing crisis affected Belmont Cragin more than the city and housing market recovery seems to be relatively slower in the community. 38

41 RESPONDING TO HOUSING DEMAND AND NEED Belmont Cragin is a truly diverse community with people and households at all stages of life. It is possible to retain this diversity with the current housing options through targeted strategies. To this end, we looked at housing opportunity in the community through the lens of the household lifecycle (see Figure 41) in order to identify potential needs of young families, empty nesters, and aging householders that the Quality of Life Plan might address. We also include renters outside the community since their future demand may impact Belmont Cragin s housing options. Figure 41 Housing and Household Lifecycle Source: 39