Rogers Park is one of the largest of Chicago’s seventy-seven community areas. Unlike the ever-changing city ward maps, the City’s community areas have had the same boundaries for years, making the community areas a favorite study subject for realtors and community activists alike. Most of the statistics used in this article are either from the invaluable Fact Book put out by the Chicago Rehab Network, or from the unique housing trends available from the Chicago Association of Realtors’ Fast Stat data base.
The increased value of Rogers Park homes was perhaps the most notable economic development that has happened in the area in the past decade. As the accompanying graphs illustrate, the ‘typical’ owner of a detached home has experienced a doubling of home value. By 2005, Rogers Park home prices were substantially higher than the median for the City.
Rogers Park condo prices rose substantially as well, going from $75,000 in 1996 to an average price approaching nearly $200,000. The typical Rogers Park condo price, however, was still much closer to the City-wide number. For the seventeen percent of Rogers Park households that managed to own a home during the past decade, household net worth has been substantially improved.
Even though homeowners comprise only a minority of Rogers Park households, the increase in owner value adds significant strength to the community’s standing. Rising home prices are a vote of confidence in the stability and viability of the entire community. There is definitely a positive side to the Rogers Park housing profile.
However, Rogers Park, and the City of Chicago for that matter, have a long way to go when it comes to improving the homeownership rate. Unlike the 70% U.S. home ownership rate, a majority of Chicago resident are renters, not homeowners. In Rogers Park, fewer than one out of five households own their own residence!
Part of the local problem is low household incomes. In the year 2000, median household income in Rogers Park stood at $31,602, equal to only 82% of the City number. Even more significantly, the community’s household income was less than half of the Chicago region’s $68,000 median income. The loss of City manufacturing jobs has severely impacted local incomes, especially when you compare our incomes to the region’s affluent suburban region.
With the area income level this low, it is no wonder that Rogers Park has one of the lowest owner-occupancy rates in the entire City. In fact, the Rogers Park home ownership rate, that is, the percent of households who own their own homes, is comparable to the rate for the very low income Woodlawn neighborhood. Like Woodlawn, Rogers Park has a very high percent of large apartment buildings. Sixty-five percent of all housing units in Rogers Park are in buildings with ten or more units, more than double the City average of 30%.
With such low household incomes, and with a housing stock that is concentrated in large buildings, it is really a wonder that Rogers Park showed as much housing progress as it has. Part of the neighborhood’s success is its north side, lakefront location. Since other north side neighborhoods have had so much more expensive prices and rents than Rogers Park, homebuyers and condo investors have come north. As a result, Rogers Park gained population in the past decade, and the number of owner units went up 20% during the same period
So even though Rogers Park has income and housing characteristics very similar to other working class neighborhoods, which are located on the south and west sides, our north side location has added some housing investment energy to the local equation. It should be noted that in those west and south side areas which have not had significant housing re-investment, many large rental buildings are in disrepair, and significant population losses have been the result. The Oakland area lost 26% of its population in the past decade, Grand Boulevard lost 22%. Washington Park lost 27%.
Another major characteristic of the Rogers Park profile that resembles a city-wide trend, is the rapid increase in the number of Hispanic residents. While the area’s white population dropped by a quarter in the 1990’s, the local Hispanic population increase was over 17,000, a 40% gain. Other neighborhoods that showed even larger Hispanic increases were Belmont-Cragin (+34,000,) Brighton Park (+22,000,) and Gage Park (+20,000.)
Rogers Park is a microcosm of the City in so many ways. Its housing stock is dense and predominantly rental. Its incomes are low and there is a substantial rent burden here. The population is almost evenly divided among white, African-American, and Hispanic residents. One way Rogers Park is markedly different, is that its ownership rate is way below the City-wide ownership rate of 44%.
That part of the Rogers Park community which already owns its own home or condo has benefited tremendously from the current federal tax laws that encourage home ownership. The conversion of rental buildings to condo ownership has made a unique contribution to Roger Park’s wealth and stability. Condo ownership in general has done a lot for Chicago and other big cities, where land for new homes is either scarce or too expensive.
A couple of weeks ago, I attended a homeownership workshop sponsored by the Rogers Park Community Council. There were thirty five north side residents at the workshop, all of them wanting to qualify to own their own home. These homeownership workshops are popular up here in Rogers Park. Homeownership is a popular subject in general. Although the City and numerous developers participate in a program which makes new, affordable units available to such interested local residents, only ten percent of the applicants for this affordable housing program will win the local lottery which makes units available.
In the face of such demand, it appears that a new federal program, one that uses tax credits, rather a mortgage interest deduction, might well be in order. Tax credits are worth more to lower income taxpayers than the mortgage interest deduction. The budgetary expense of a new credit program wouldn’t even approach the eighty billion in annual tax costs of the mortgage interest deduction and favorable capital gains rules.
With a new baby boom on the horizon, and with record immigration, the demand for affordable housing is as high as it has been since the late 1970’s. Chicago communities from South Chicago to Ashburn, from Pullman to Rogers Park need to keep the momentum of housing investment going. Chicago and other urban center are being shortchanged by national housing policies which (increasingly) benefit second and investment ownership, at the expense of younger and working households. Those states which already have high rates of homeownership benefit from the current tax code subsidy to their local homeowners. Illinois and other big urban states need a housing program that fosters ownership in the most expensive rental markets.
Home ownership is a great social benefit. This country has come a long way in using private capital, the US tax code, and household creditworthiness, to bring about the boom in housing values. But we have to be realistic now, there is far more demand for home ownership than the current national policies can accommodate. We all need to think long and hard about how we can extend the housing success to more Americans. In a community like Rogers Park, increasing homeownership is a good way to improve the quality of life for many more community residents
Of course, Rogers Park, like many other City communities will continue to have a major challenge in preserving its rental housing inventory as well. Our rental housing inventory is the key to this community’s stability. What we can do about this knotty issue is a fit subject for future discussion. I wouldn’t be ashamed to say that there is a need for some new thinking on this subject as well. But it would be a real waste to think of new housing programs as a partisan or ideological exercise. This is America, we are used to getting things done in an efficient private sector. It is just that public policy and economic reality have to stay in touch. There is a whole new generation of citizens waiting to participate in the American dream.
PJFugiel, PhD.
Realtor, Property Consultants
April 4, 2006