Tag: news

Chicago

55,000 – Fifty-five thousand would be the number of non-performing residential structures in the city of Chicago five years ago…in 2019.

32,000 – Thirty-two thousand would be the number of vacant lots in the city of Chicago five years ago…in 2019.

In order to increase Chicago’s property tax base, vacant, abandoned and distressed residential structures will need to be renovated, in scale. Thus, transitioning now non-performing “black holes” on Chicago’s balance sheet to investors. And to owner-occupying homebuyers. Intended outcome? The undergoing of substantial numbers of inner city renovation projects of non-performing residential structures. The transformation of what can now be categorized as city liabilities, into city assets.

How about vacant Chicago lots?

Non-performing lots in Chicago need to be conveyed – in scale – to new property owners. Property owners who pursue the building of new homes on the vacant lots.

As new homes are built on what are now vacant city lots, a new revenue source for the city – coming by way of property taxes paid to the city…property tax amounts which are based upon assessment values for properties which have newly-constructed homes on them – is established.

While Chicago is saddled with substantive numbers of non-performing residential structures, the establishment of processes which reduce the number of vacant lots has been a priority for the city.

For example…


Between the years 2015 and 2019, Chicago proceeded to sell in excess of 1,000 (out of approximately 11,500) vacant lots. Five years. Over 1,000 lots sold. On average, over 200 vacant lots sold per year. For five years. Pretty good!

The Chicago Large Lots Program…

Through a program Chicago established to address challenges linked to the high number of vacant city-owned lots – this program being, the Large Lots Program – neighborhood property owners were able to purchase up to two vacant lots from the city. One condition of the lot acquisitions being, the lots purchased needed to be properties on streets on which buyers already owned real estate.

The sale prices of those lots sold through the Large Lots Program? $1 each.

Circumstances, Timing, and Policy. Or a lack thereof?


It can credibly be argued that opportunities for Americans to build wealth through the acquisition of real estate has usually been based upon, 1) circumstances, and 2) timing.

Minus, 1) favorable circumstances, and 2) good timing, is (or was) an American just outta luck in regard to real estate? Due to different reasons, for many – long, long ago, and still today – that answer, unfortunately, was and is, “YES.”

So what role can, should or will government take on with regard to creating more opportunities for generational wealth building through the ownership of real estate? Remember, as a “game-changer,” HUD was created 59 years ago…in 1965. A long time ago.

Going back…hundreds of years before the formation of HUD, what role did our government play when real estate was sought out? In the earliest stages of our American set-up.

During the 1600’s, a select portion of those residing in what would go on to become the American colonies – those who aspired to “own” land for themselves, that is – ventured out, and found themselves a piece of land. They claimed that land. They then “owned” that land. And there you have it. Notwithstanding, this was land “ownership” – for some – without a deed being recorded. Notwithstanding, this was land “ownership” without the issuance of title insurance. Notwithstanding, this was land “ownership” which went into effect without the use of a mortgage.

During the 17th Century, in what would go on to become the United States, when one wanted land, one could often just travel a few miles north. Or south. Or east. Or west. Outside of a settled area, that is. Find some barren land. Land that had not yet been claimed. Then, proceed to claim that unsettled land. Circumstances permitted.

So a notable portion of our early “eligible” American settlers didn’t see value in buying land from someone else. Nor was there a need to.

Circumstances. Timing.

When the United States is short millions of new homes – as we are today – and when there is no substantive national policy being spoken of which can work towards addressing our very real housing problem (in an election year, for that matter) do we just leave this all to “Mr. Market,” and say, “Well…it’s just, 1) circumstances, and 2) timing.”

That’s kinda what we’re doing…

Wholesale Prices – Retail Prices

In the U.S. economy, there is a “balancing act” found within projected, planned and/or implemented wholesale-retail price increases. Just as there is a “balancing act” in managing tariffs.

Wholesale price increases, retail price increases and tariffs. Each being a conversation piece relevant to how price changes could/will affect consumer behavior. And demand.

As prices increase, consumer demand could in turn decrease. Companies opting to reduce the prices that consumers ultimately pay at the retail level, with an eye on jumpstarting demand – if demand had been deemed to have stalled out – can prove to be challenging when companies absorb higher-than-planned-for wholesale price increases. As is reflected through an increasing – or a stubbornly consistent higher-than-planned-for – Producer Price Index.

And those wholesale prices paid by corporations – prior to consumers purchasing products at the retail level? Those wholesale prices – paid by U.S. corporations – are driven up by tariffs.

“You can’t tax business. Business doesn’t pay taxes. It collects taxes.” – a quote by Ronald Reagan

Trenton

Go to New Jersey’s capital, and we’ll find that upwards of 60% of City residents rent their homes (or their apartments). Whereas, in Mercer County – Trenton is located in Mercer County – as well as in the State of New Jersey, overall, between 30% to 40% of residents rent.

Trenton has thousands of vacant lots, non-performing buildings and vacant homes. How come?

One contributing factor had been the hollowing out of Trenton’s industrial base. Leading to a reduction in property tax receipts for the City – I.e.: less property tax revenue. Culminating in a deterioration of Trenton’s center city housing stock.

This former American industrial manufacturing hub – like many other legacy cities which have been adversely affected by de-industrialization policies – has its share of housing-related challenges. Yet, with thousands of vacant lots, non-performing buildings and vacant homes located within its borders, this former Mid-Atlantic industrial heavyweight also possesses the ingredients – serving as a foundational starting point – to establish processes to transition now non-performing Trenton properties to high-quality affordable community assets. Available, then, to those who call Trenton “home.”

The New Jersey State House along the Delaware River is located in Trenton and is the house of government for the U.S. state of New Jersey.

Redevelopment

In a designated Redevelopment Area, a municipality’s goals could be focused upon transitioning now non-performing residential, commercial and industrial properties to vibrant community assets. The pursuit of which could take on a community-centric theme. Renovations. Repurposing properties. And reconstruction too. Each of these being potential goals pursuant to redeveloping non-performing properties in designated Redevelopment Areas.

Steps taken by a municipality in their progression towards neighborhood revitalization in Redevelopment Areas – progression, coupled to a redevelopment plan emanating from city hall – often starts off with a city council passing a resolution. Following the resolution, the planning board then might construct a Redevelopment map. With a Redevelopment map formulated – and upon notification to the public of a scheduled hearing – a planning board could then potentially adopt a Redevelopment resolution.

A Redevelopment resolution could recommend the establishment of a Redevelopment Area within a municipality. There is quite a bit more technical minutiae to this process, needless to say. Yet, in summarily-simplified terms, this is one we can thus arrive at the designation of a Redevelopment Area within a municipality.