Category: Chicago

Alternatives for spending the LaSalle Central TIF money

Currently, the Lightfoot administration has proposed spending about $188 million to support the construction of 318 affordable dwelling units in three office and hotel buildings that would accomplish a couple of goals. The housing would reduce the segregation of downtown living, and it would increase the population of downtown which could use more people to support all of the businesses and infrastructure that already exist.

The building at 111 W. Monroe St. From Block Club Chicago: “This proposal by Prime/Capri Interests, LLC, will create 349 apartments, 30 percent affordable, plus a hotel on the lower floors and 130 spots of underground parking. The hotel would be created without city funding, developers said.”

How should that money be spent

Let’s see how much money the LaSalle Central TIF district has.

  • $196 million (at the end of 2021) – read the annual report
  • it generated $151 million in 2021
  • the city projects it will generate $120 million in in 2022 (source)
  • the city spent $76 million in 2021 ($63 million was surplused and the rest was spent on plans, studies, and “Costs of construction of public works or improvements”)

That’s a lot of money that the mayor’s office gets to choose how to spend!

It’s unlikely that the Lightfoot administration can rally the necessary approvals to dedicate the money before Brandon Johnson and a new city council is sworn in on Wednesday, May 15.

If the Johnson administration wanted to review the alternatives to that proposal, what would those be?

The alternatives

  1. Spend $188 million to support the construction of 318 affordable units 
  2. Surplus the money; if the city did this, it would receive $44.81 million into the general budget. 
  3. Spend the same or less money on…something else. This could include beautifying the street or attracting residential development through another strategy that doesn’t spend the money on buildings construction (according to suggestions in a Crain’s article).
  4. Do nothing. The money would stay in the account, grow, and generate interest.

What are other ways to spend the money?

With the cash flow shown in the “how much money” list above, it seems that the city could accomplish alternatives 1 and 2.

Two-flat journal 8: Adding a third unit

Over the years I waffled once or twice about adding a third unit, in the basement. I hired a structural engineer to draw up plans for the replacement center beam in the basement’s ceiling. To “future proof” the plans, I also asked him to draw a plan and create specifications for a floor excavation in order to achieve a code-compliant ceiling height in the potential basement unit.

The basement, looking towards the front entry. Notice how smooth the floor is.

The waffling was based on the cost of the necessary digging down. Excavation will add about $25,000 to the cost of the project. (That’s based on one bid, the only bid that called it out specifically. I asked all three bidders to separate the costs of the basement unit so that I would know exactly how much the basement unit – excavation, walls, finishes, etc. – would cost as an “add on”.)

I think my architect also helped convince me to design and get bids for a third unit because of the flexibility it could provide for me and my tenants (which may include one or more family members), as well as the possibility of additional rental income.

I’ve settled on adding the third unit, and I’m excited to do it, in part because of my well-known enthusiasm for accessory dwelling units. (A note about Chicago’s ADU ordinance: this property is outside the ADU pilot area but it has unused zoning capacity per both the FAR and minimum lot area per unit standards so the additional unit is allowed without the ADU ordinance.)

Excavation

The Chicago Building Code requires that the ceiling height be a minimum of 7′-6″ in most of any dwelling unit (that’s measured from the finished floor to the finished ceiling). A limited amount of area is allowed to be lower to get around existing or newly installed pipes and ducts in the ceiling.

To achieve that, crews will demolish and remove the existing floor slab (which I’ll be a little sad about because the previous owner did a nice job pouring it) and excavating earth 10″ down. They’ll also underpin the foundation walls in an alternating pattern of rectangles around the perimeter. I hope I can explain underpinning well (otherwise watch Darren Voros’s video): This means they’ll dig under half of the foundation dispersed around the perimeter (the A sections), leaving unexcavated space between each to hold up the other half of the foundation (the B sections); then they’ll switch and repeat the process for the B sections.

A foundation wall detail showing the 10″ of excavation and the addition of a perimeter drain tile.

Water

After every rain storm I go and check the house. The basement has been dry every time. I’m surprised, and thankful, that it seems that water doesn’t seep into the basement.

One time I noticed that there was water pooling on the basement floor – when a rain storm had not occurred. It turned out that when I closed the water service line I didn’t close it well enough and water was very slowly leaking out. Tightening the valve handle was a simple resolution.

During the excavation there will be a perimeter drain tile system installed under the floor slab to steer water toward an ejector pit. An ejector pit is different than a sump pump in that it has a mechanism to grind the house’s sewage before pumping it to the city’s sewer main. I believe an ejector pit is a requirement when the lowest dwelling unit’s plumbing (i.e. the toilet) will be below the city sewer main.

Bob Vila’s website describes interior drains like this:

Similar to exterior drain tile, an interior French drain features a perforated pipe that carries water to a collection pit where it can be pumped to the surface. This type of drain is located along the interior perimeter of the basement and lies below floor level.

All You Need to Know About Basement Drains, Glenda Taylor and Bob Vila

Apartment

The new dwelling unit is drawn as a 1-bedroom apartment with a small bedroom that has two short windows and a closet. It has a large, combined living room, dining room, and kitchen.

The entryway is partially separated from the big room using a hall closet, creating a sort of mud hall. The bathroom is of a typical size for small apartments in Chicago and there’s a considerably sized utility room for laundry and storage. Overall, the apartment has an area of about 720 s.f.

I believe in-unit storage to be an important amenity. My current apartment is a studio and I selected it in part because it had good layout with a lot of scattered storage (there’s a walk-in closet, a large nook between the living area and the bathroom, a small closet, and a linen closet in the bathroom).

When I was looking for a new place to live in 2022 I didn’t want to have to move any of my stuff into a storage locker in the building or a storage unit in another building.

Other space in the basement

The rest of the basement, about 100 s.f., will have two hybrid heat pump water heaters, the ejector pit, electrical panels, and a little bit of room for storage. There’s also a rear entryway and the basement apartment will have a rear exit through here.

How an 18-unit building on a Chicago boulevard disappeared and was re-zoned to allow 7 units

Several things happened in November that has inspired me to finally document the story about a building whose history I had previously researched but never shared. It’s the story of a rear-courtyard-style building two blocks from the Garfield Park Conservatory that had 18 dwelling units, was demolished in the 1990s due to unpaid water bills, and rezoned – along with many other buildings nearby and across the city – to allow the next owner to build only seven dwelling units.

Those three things, for the curious: A question was posed to the speaker at a recent real estate group luncheon about the prevalence of downzoning in Chicago and the impact that might have on limiting some redevelopment of vacant lots; the city’s launch of ChiBlockBuilder, a program that replaces and expands upon the former $1 Large Lots program; and a meetup I attended with other urban planners to discuss, among other topics, zoning, transit, and cannabis dispensaries.

I make a few contentions in this blog post about zoning in Chicago. Among them:

  • Downzoning is a municipal practice that reduces how densely a property can be developed; in this context, the number of dwelling units allowed.
  • The zoning text and maps have progressively downzoned the city between the first zoning code and today’s zoning code; this blog post reviews the zoning text changes using a case study of a single building.
  • The zoning text and map at the time allowed an 18-unit building to be built on a particular property in East Garfield Park but the current zoning text and map allows only a seven-unit building to be built.

Introducing the vacant lot at 3454 W Fulton Blvd

There is a vacant lot owned by the City of Chicago at the northeast corner of Fulton Boulevard and St. Louis Avenue in East Garfield Park, in view of the renowned Garfield Park Conservatory. The lot has an area of 7,500 square feet.

The property’s PIN is 16-11-404-025-0000 (open its Address Snapshot on Chicago Cityscape).

The group of six three-flats is at the northeast corner of Fulton & St. Louis, or at the top-left corner of the image. The image is a screenshot of a Sanborn map, volume 11, sheet 84, last revised in 1950. Access to the HIG – Fire Insurance Maps online database is via the Chicago Public Library (a library card is required).

For what it’s worth, the southeast corner lot had 15 units, the southwest corner lot had 18 units. Then there’s the northwest corner lot that had a rear-courtyard-style building with interior corridors with 45 units (that’s 250 percent more units on a lot that’s 150 percent larger). (See Sanborn map volume 11, sheet 83, to visualize the corners on the west side of St. Louis Ave.)

The timeline of construction to demolition to city ownership to resale

The flats were built between 1922 and 1949, according to Sanborn maps (link to 1922 map, volume 11, sheet 83, hosted by the Library of Congress, which shows a vacant lot, while the 1949 version above shows the building).

In February 1992, the City of Chicago’s water department filed a statutory lien on the property to claim and to notify the owner that there was unpaid water service balance of $2,593.89.

If the building was dilapidated and had been cited, I did not find evidence in the documents available at online Cook County and City of Chicago sources. There is evidence, however, that the property was sold in 1988 a five-year delinquent tax sale.

The lot had six adjoining three-flats for a total of 18 units until its demolition, by the City of Chicago, on February 12, 1992 (read the lien the city filed against Exchange National Bank, in the amount of $14,754, to cover the cost of demolition).

Seven years later, on March 1999, the City of Chicago acquired the lot after succeeding in its lawsuit against Exchange National Bank in the Cook County Circuit Court’s Chancery Division (case number 95 CH 3958).

I’m going to repeat this part: Available evidence shows that the City of Chicago demolished the building due to unpaid water bills. I believe that political and planning circumstances – and policies – have changed such that if the situation were repeated in 2022 the building would not be demolished. For example, there is a coalition program called the Troubled Buildings Initiative that the city helped found in the mid-2000s to place buildings in this and similar situations into “receivership”, to ensure that the building does not get demolished and can actually be stabilized and improved (renovated). This is a better way of handling the problem!


Fast forward twenty-three years from the acquisition in 1999 to now. The lot is for sale to eligible neighbors – for the second time this decade – for use as a landscaped space (side yard, garden, plaza) or redeveloped (anything allowed by zoning, but you may need assistance learning to decode the zoning code).

The lot was first for sale in the Large Lots program during one or more of the tranches promoted between 2015 and 2018. The lot is now for sale since the ChiBlockBuilder program launched on November 17, 2022.

The property shown on the ChiBlockBuilder website. The property is highlighted in green on the map.

The rules are different between the former Large Lots program and ChiBlockBuilder. In the past, anyone who owned property on the same block or across the alley could apply to acquire the lot. All lots were sold for $1.

Now, through ChiBlockBuilder, interested buyers who want a low-cost acquisition must own and live in a property adjacent to the lot. This lot has only one eligible neighbor; I don’t know if the owner lives there. If they do, they can acquire the property for 10 percent of its market value.

That’s another difference between Large Lots and ChiBlockBuilder: All properties for sale (which is a subset of all properties that will eventually be for sale) have already had their market value appraised.

The market value for 3454 W Fulton Blvd is $29,953 or $2,995 for eligible applicants. There’s one other group of potential buyers that can obtain lots for 10 percent of market value and that’s non-profit organizations who have a proposal for a landscaped-based project.

The other day the City of Chicago added a wood fence around part of the vacant lot. The RV is parked on another city-owned lot, and the semi-trailer belongs to the water department because of underground work being conducted in the neighborhood.

What does zoning allow?

Successful neighboring owner-occupant buyers are able to do anything with the vacant lot that zoning allows. Although, without an expertise in reading the Chicago zoning code or a tool like Chicago Cityscape, it will be hard to know what that is.

A screenshot of ChiBlockBuilder showing the FAQs that provide links to identify a property’s zoning district and to the Chicago zoning code documentation.

My real estate information company, Chicago Cityscape, automatically generates a “Zoning Assessment” for every parcel in Chicago.

At 3454 W Fulton Blvd, the Zoning Assessment estimates that, currently, seven dwelling units are permissible, 11 fewer than what were extant there back in 1992.

Downzoning takes effect: Zoning codes of 1923, 1944, 1957, and 2004

Downzoning is a process – through either a change in the map (the zoning district assigned to a property) or a change in the text – that reduces the number of dwelling units permissible on a given lot.

1923

In the 1923 zoning code, Chicago’s first, the allowable density of building on this lot was controlled by the “2nd Volume District” which established very simple rules: a ground coverage limit of 75 percent, and a height limit of 66 feet. The building height could be higher with an upper floor setback.

A graphic from the 1923 zoning code shows how height limits varied based on upper floor setbacks and distance from the street.

Multiplying the lot size of 7,500 s.f. by 0.75 equals a maximum building footprint of 5,625 s.f. Multiply that by six floors and there’s a maximum floor area of approximately 33,750 s.f. This created an FAR of 4.5.

1944

In the 1944 zoning code, the allowable density of building on this lot was still controlled by the “2nd Volume District” but the maximum density had been reduced: a ground coverage limit of 45 percent, and a height limit of 45 feet (the current zoning code applies a height limit of 38 feet on the lot in question, while ground coverage is dictated by FAR and setbacks standards that the 1944 zoning code didn’t have).

Multiplying the lot size of 7,500 s.f. by 0.45 equals a maximum building footprint of 3,375 s.f. Multiply that by four floors and there’s a maximum floor area of approximately 13,500 s.f. This created an FAR of 1.8.

Yet neither the 1923 nor the 1944 zoning codes had a limit on the number of dwelling units. The number of dwelling units was thus limited by whatever building code standards there were and the unit sizes the builder wanted to market.

1957

The 1957 zoning code introduced a more stratified Use + Density schedule of districts more similar to the current zoning code than the two prior codes. The map was drawn to place 3454 W Fulton Blvd into an “R4” district.

1957 zoning code map sheet 1-J (which is the same grid index/sheet number as the current zoning code’s map). Image from the HathiTrust database, page number 171 of 348 (page 91 of the zoning code, though). 3454 W Fulton Blvd is outlined in a pink-colored box near the center of the image.

In 1957, the R4 zoning district applied a new density rule that there can only be one dwelling unit per 900 s.f. of lot area. This differs from the prior two codes which did not have a standard establishing a maximum number of units.

Since the lot has an area of 7,500 s.f., that equals eight dwelling units allowed.

The 1957 zoning code introduced the minimum lot area per unit standard. The standard in R4 zoning districts was that there had to be 900 s.f. of lot area per unit the owner desired to build. That number increased to 1,000 s.f. in the 2004 (current) zoning code, reducing the number of units allowed to be built on this vacant lot. Scan is from the HathiTrust (scanned page 24).

The 1957 zoning code also introduced a floor area ratio (FAR) of 1.2 to control building size, and front, side, and rear yard setbacks that controlled lot coverage. Remember that this lot had an effective allowable FAR of 4.5 in 1923 and 1.8 in 1944.

I think it needs to be pointed out that the most dense residential-only zoning district in the 1957 zoning code – R8 – allowed more than twice the number of units on a given lot than the most dense residential-only zoning district in the current zoning code – RM-6.5. It was a matter of requiring 135 s.f. of lot area per dwelling unit prior to 2004 and 300 s.f. of lot area per dwelling unit since 2004, respectively.

In practical terms, if the lot was zoned R8 in 1957-2003 then 55 units would be allowed; if it was zoned RM-6.5 in 2004-2022 then 25 units would be allowed.

2004

In the current zoning code, adopted in 2004, the lot’s “R4” zoning district designation was converted to “RT-4”. The code was updated to reduce the density rule from requiring 900 s.f. of lot area per dwelling unit to requiring 1,000 s.f. of lot area per dwelling unit. Since the lot has an area of 7,500 s.f., that means seven dwelling units are allowed here (also, the zoning code says the number must be rounded down in instances where there is a maximum standard). That’s a difference of one unit, so hardly an indictment of the downzoning of this lot that occurred between 1957 and 2004.

The current zoning code has a table in 17-1-1406-A that instructs readers how to convert from the 1957 zoning code districts to the current zoning code’s districts.

The FAR stayed the same between the 1957 and 2004 zoning codes, at 1.2 (far below 4.5 in 1923 and less than 1.8 in 1944).

Allowed zoning summary

I contend that there was a severe decline in the number of dwelling units allowed between Chicago’s first and fourth (current) zoning codes, manifested through a reduction in reduced height limits and lot coverage between 1923 and 1944 and the introduction of the maximum number of units standard (called “minimum lot area per unit”) in 1957. The zoning code in 2004, as it pertains to this lot, looks very much like the zoning code in 1957.

chart of four zoning codes and how they regulate, or would have regulated, density and parking at the location in this blog post
Chart that compares the zoning standards of height, lot coverage or FAR, and units allowed, amongst the four iterations of Chicago’s zoning code. Thank you to Daniel for compiling the different zoning codes’ standards.

Miscellanea

  • Another big change between the 1957 and 2004 zoning codes was the amount of parking required: in the equivalent zoning districts, the 1957 zoning code required 0.75 spaces per dwelling unit while the 2004 zoning code requires 1 space per dwelling unit, which is still the case as proximity to transit has no bearing on RT-4 zoning districts.
  • The 1923 had a cap on the number of garage parking spaces of one space per dwelling unit. This cap went away at some point, and has been reinstated in a limited basis in the “Connected Communities” ordinance adopted in 2022.
  • The 1923 zoning code allows more “auxiliary” uses in “apartment districts”, such as the one governing the vacant lot in question, compared to the current RT-4 zoning district, including: a boarding or lodging house, and an apartment hotel with a restaurant or dining room that is entered from within the lobby. (I don’t think apartment hotels exist anymore in Chicago.)
  • In 2022, the Chicago City Council adopted a zoning code amendment called “Connected Communities” which would allow the next owner of this vacant lot to build housing without any car parking – like it was in the 1920s – if they were to also obtain an upzone (that is, a zoning map amendment to a higher-density zoning district) to RM-5 or higher. This is because the lot is near enough to an eligible transit service.

P.S. The other type of downzoning (or upzoning) is to change the map. This means to reassign certain parcels to a different zoning district. Chicago city council members do this constantly, often for unknown or unexplained reasons. When it is explained, it’s often to ensure that a property owner must proposed a project to the alderperson and then obtain their permission to (usually) upzone.

When the zoning is changed one parcel at a time, or several parcels for a single property owner, this process of downzoning – or upzoning – gets an additional name: spot zoning. This is generally bad urban planning and development policy and has been part of political corruption. Chicago used to have a department policy that rezonings (changes to the zoning map) had to cover at least 10,000 s.f. of contiguous parcel area at a time (just a little bit larger than three standard size lots).

Several examples of alderperson-initiated downzoning in the 2010s include (from memory):

  • Former alderperson, and chairperson of the City Council’s zoning committee, Danny Solis, downzoned a large residential property in Pilsen to “M” (industrial); the property owner, PMG, sued Solis and the City of Chicago. The settlement was that the city would buy the land from PMG at market rate. This is now the 18th & Peoria development site, and the city is conducting public meetings to determine how to develop it.
  • Alderperson Roberto Maldonado submitted dozens of downzoning ordinances to City Council in ~2020, to change vacant lots in Humboldt Park and Logan Square from RT-4 (which would allow a three-flat) to RS-3 (which would allow a single-detached house, and in rare locations, a two-flat). The planning department staff had to limit his submissions to a few per month because they could not handle all of his ordinances amongst their other work processing real zoning change applications.
  • Alderperson Carlos Ramirez-Rosa downzoned a commercial district along Milwaukee Avenue north of Diversey Avenue to allow a lower density and lower height. Any developer that proposed more than allowed has to go through the 35th Ward Community Zoning Process (I have not personally experienced this process but I appreciate that it’s well-documented and seems to be applied consistently). The scope of the downzoning was reduced after some pushback.

Two-flat journal 7: Plans are issued for bid

My architect has issued architectural plans for bidding!

(This happened a month ago, and I don’t dedicate enough time weekly to send the bidding instructions to general contractors and to follow up with them asking if they’re still planning to send a bid.)

If you’re an interested GC, look at the “bid package” where you’ll find…

  • links to the architectural plans
  • structural plans (for the basement)
  • photos of the interior and exterior
  • schedule book

What’s happening in the neighborhood

The house is one block away from the Kedzie Green Line station, which offers a 20-minute ride to downtown or to Oak Park. Behind the station is The Hatchery, a major shared commercial kitchen and food business incubator.

The Cook County Land Bank Authority owns several properties on the block and is marketing these to developers for new housing.

Starting in 2022, the City of Chicago began the process to redevelop land it owns adjacent to the Kedzie station into mixed-use buildings.

How I’ve found general contractors

I’ve already had a few GCs walk through the house and tell me they’re going to submit a bid. I found them either by asking architects I know, and by scouring the Building Permits Browser on Chicago Cityscape.

I filtered the permits, looking for “renovation/alteration”, set the estimated project cost from $100,000 to $400,000, and then skimmed the project descriptions for words like “two-flat” and “rehab”.

I made a list of those contractors and found their phone numbers and emails elsewhere (the city used to include their phone numbers in the building permits dataset, and took it out in 2019 or 2020).

This photo gives you a glimpse of some of the exterior issues (look at the cornice, especially at the far left corner). All of the windows and doors are proposed to be replaced. The awning will be removed eventually (it helps keep the snow off the front porch).

Where Chicago’s community colleges could build housing

The Illinois General Assembly and Governor Pritzker just gave community college districts in Illinois the authority to work with local housing authorities to develop affordable housing. The bill, HB0374, takes effect January 1, 2022. The text is very short (see the screenshot below or read the bill).

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What does this mean for community college districts? It probably means that they can lease their land to the local housing authority for that local housing authority to develop affordable housing for the community college’s students and their families.

The land is essentially free, since it’s already owned by the community college districts and it’s not taxed. Plus, community college districts have their own taxing authority (subject to caps) that can be used to pay for bond-based debt.

Three opportunities in Chicago

I’m going to point out three community college locations in Chicago that could be great places for new and affordable student housing to be built.

Malcolm X College

Across from the New Malcolm X college was the original Malcolm X college, and now it’s a huge vacant lot. The Community Colleges of Chicago sold it in 2016 to the City of Chicago, which sold it in 2017 to Rush University Hospital System (which is across the Eisenhower Expressway to the south).

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The land across from the New Malcolm X college has been vacant for half a decade.

Welp, Rush also wants to build housing – for unhoused people who use emergency rooms as a way to live and be housed. (People’s health dramatically improves when they have permanent housing and hospitals spend less money on treating them in expensive-to-operate ERs.) Rush and the Chicago Housing Authority could develop housing for both populations – the chronically sick and students – using funds combined with the Chicago community college district.

Additionally, the Jackson bus takes people to and from downtown, and the Blue Line has a station at Illinois Medical District a block away.

Humboldt Park

The Humboldt Park Vocational Education Center, which is operated by the Wilbur Wright community college, is another prime location for student housing. The center has a huge parking lot and lies along the California Avenue and North Avenue bus routes.

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Humboldt Park Vocational Education Center and its parking lot, which takes up more area than the building.

Parking lots love to be turned into homes, especially in gentrifying areas. That’s free land in a high-demand area where rent is north of $1,200 for a 1-bedroom apartment (I’m using HUD’s Fair Market Rent for the 60647 ZIP code).

Dawson Technical Institute

Then there’s Dawson Technical Institute in Bronzeville, which is about 2 blocks from the Indiana Green Line station and several east-west and north-south bus routes.

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Dawson also has a massive parking lot, on the opposite side of the Green Line tracks from the building on State Street.

Dawson teaches construction trades, which is perfect because the Green Line can take students to internships and jobs at all of the new construction in Fulton Market that’s ongoing and going to continue for the next three years (at a minimum).

What other good affordable student housing construction opportunities do community colleges in Illinois have?