Applied Real Estate Analysis, Inc. Camiros, Ltd

RESIDENTIAL MARKET ANALYSIS FOR MORGAN PARK, BEVERLY AND MOUNT GREENWOOD CHICAGO, ILLINOIS

PREPARED FOR: THE CITY OF CHICAGO, DEPARTMENT OF PLANNING AND DEVELOPMENT

AUGUST, 2006

Submitted by: Applied Real Estate Analysis, Inc. Camiros, Ltd.

File # 1094-02

TABLE OF CONTENTS

Page

TRANSMITTAL LETTER

TABLE OF CONTENTS

INTRODUCTION ...... 1

NEIGHBORHOOD DESCRIPTION ...... 2

SETTING ...... 2

DEMOGRAPHICS ...... 2

HOUSING CHARACTERISTICS ...... 7

GENERAL HOUSING CHARACTERISTICS ...... 7

HOUSING MARKET TRENDS...... 11

RENTAL MARKET ...... 11

FOR-SALE MARKET ...... 12

DEVELOPMENT POTENTIAL ...... 14

CONCLUSIONS ...... 16

POLICY RECOMMENDATIONS ...... 17

INTRODUCTION ...... 17

EXISTING HOUSING CHARACTERISTICS AND DEVELOPMENT PATTERNS ...... 17

POTENTIAL DEMAND FOR RESIDENTIAL DEVELOPMENT ...... 24

RESIDENTIAL DEVELOPMENT POLICY RECOMMENDATIONS ...... 25

SUMMARY ...... 32

APPLIED REAL ESTATE ANALYSIS, INC. CHAPTER I INTRODUCTION

The Chicago Department of Planning and Development retained Applied Real Estate Analysis (AREA), Inc., and Camiros to analyze housing market conditions in three Chicago community areas: Beverly, Mount Greenwood, and parts of Morgan Park. For the purposes of this study, the market area includes these communities with the exception of census tracts 7501 and 7506 in Morgan Park.

In preparing this analysis, AREA and Camiros met with City of Chicago staff, toured the study area, documented sales trends and surveyed rents, analyzed area demographics and housing data, and interviewed brokers and representatives of local community organizations.

AREA has focused on analyzing the market potential for new housing in the study area and Camiros has prepared a physical assessment of the neighborhoods to ascertain areas with physical development potential. Staff from the two firms compared their findings and developed recommendations for City policies that will satisfy market demands without impairing the special character that makes this area appealing to prospective current residents and home buyers.

AREA analysts found a steady market for a mix of new housing that encompasses single- family units, townhouses, and strategically located condominium flats. The team’s general recommendations emphasize maintaining the commercial character of 95th Street and Western Avenue and focusing new development in transit-oriented nodes around train stations, on scattered infill sites, and on sites that will support the area’s strengthening secondary commercial areas—especially around 111th and Kedzie.

Developing new townhouses and condominiums to accommodate the changing lifestyles of the study area’s aging population will also ensure the availability of single-family houses for the young families who find the area’s neighborhoods a desirable place to live.

1 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. CHAPTER II NEIGHBORHOOD DESCRIPTION

NEIGHBORHOOD SETTING

The study area, consisting of the Beverly and Mount Greenwood community areas and parts of Morgan Park, is located on the southwest side of Chicago. The study area is generally bounded by a railroad right-of-way (from 87th and Damen to 103rd and Malta) and Vincennes on the east, 87st Street on the north, and the city limits on the west and south. The Beverly (north of 107th) and Morgan Park community areas are in the eastern portion of the study area and Mount Greenwood is to the west of Morgan Park.

On the west the city limits are basically at Western north of 99th Street, at Pulaski from 99th to 111th, and at Cicero from 111th to 115th. The southern boundary is basically 115th Street but it extends to 117th Street, roughly between Central Park and Homan and to 119th Street between Vincennes and Rockwell. I-57 can be easily accessed from Morgan Park via 111th and 119th and from Beverly via 99th Street. Public transportation is also convenient, with eight Metra stations located between 91st Street and 119th Street. In addition to the two stops at the extremities of the study area, there are stops at 95th, 99th, 103rd 107th, 111th, and 115th streets. (The 119th Station is outside of the city limits but still serves some city residents.)

In the Morgan Park (southeastern) section of the study area, a ridge produces significant changes in elevation that provide a dramatic setting for several blocks of very large houses set on comparably large lots. Streets that curve slightly or run at angles, as dictated by the terrain, make this late 19th and early 20th century section of the study area unique in Chicago. Almost half of the housing stock in Beverly was built prior to 1940, while most of Mount Greenwood was developed after World War II.

DEMOGRAPHICS

Population and Households. After several decades of decline, the city of Chicago’s population experienced an increase of 4% during the 1990s, reaching 2,896,016 in 2000. Based on birth and death records plus estimates of migration patterns, the U.S. Census Bureau estimates that Chicago's population has declined since 2000. AREA’s estimates indicate that while the population may not have grown substantially since 2000, it is unlikely that it has declined. The city has has added between 24,000 and 25,000 net new housing units since 2000 (built almost 42,000 but demolished more than 17,000). By our estimates, the number of new households living in the city is only about 10,000. The addition of these new households since 2000, however, may not have translated into much

2 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. of an increase in population. A large percentage of the new units have been occupied by one- or two-person households, while many of the households moving out of the city were families with three to five persons in the household. Thus, although it is possible that the city has lost population, it is more likely that population has increased by about 10,000 persons rather than the 20,000 to 25,000 that would could have been anticipated by an increase of 10,000 new households of average household size.

The production of 14,000 or 15,000 more housing units than were needed to meet demand based on household growth and replacements for units demolished is explained in part by another component of the housing market; the second home buyer. Over the first five years of the decade, thousands of suburbanites and persons living elsewhere in the country have purchased a second home in Chicago; generally in the Central Area. This trend, while contributing to the housing boom in and around downtown, has little direct impact on the demand for housing in the neighborhoods.

Table 1 Population and Household Trends, 1990–2005 Market Area 1990 2000 % Change 2005 (est) Population Beverly 22,385 21,992 -1.8% 20,374 Mount Greenwood 19,179 18,820 -1.9% 17,435 Morgan Park 16,491 15,771 -4.4% 14,611 Total 58,055 56,583 -2.5% 52,420 Number of Households Beverly 7,743 8,030 3.7% 8,063 Mount Greenwood 6,881 6,903 .32% 6,917 Morgan Park 5,497 5,463 -.62 5,484 Total 20,121 20,394 1.4% 20,464 City of Chicago Population 2,783,726 2,896,016 3.9% 2,906,250 Number of Households 1,025,174 1,061,928 3.5% 1,063,800 Sources: U.S. Census; Claritas; Applied Real Estate Analysis, Inc.

Following the trend in the rest of the city, the Beverly, Mount Greenwood, and Morgan Park area began losing population in the 1970s. It still had a population of 68,290 in 1970, but during the next decade it lost 11% of its population; the decline continued through the 1990s. In 2000 its population stood at 56,583. In spite of this population loss the number of households in the market area increased. During the 1990s, average household size

3 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. shrank due to a growing population of older persons living in one- and two-person households. Table 3 shows that as of 2000, 21.1% of the study area was 55 years and older—slightly higher than the citywide percentage of 17.8%.

Table 2 Racial Demographics, 1990–2000

1990 2000

White Black Hispanic White Black Hispanic

Market Area %% % %% %

Beverly 73.5 24.0 1.8 62.8 31.9 3.0

Mount Greenwood 96.3 1.3 1.9 91.0 3.6 3.8

Morgan Park 54.6 43.2 1.7 47.2 48.3 2.7

Total 75.7 21.9 1.8 67.9 27.0 3.2

Chicago 37.9 38.6 19.6 31.3 36.6 26.0

Sources: U.S. Census; Claritas; Applied Real Estate Analysis, Inc.

As has been the case throughout Chicago at various times, the racial composition of the study area is changing. While citywide both the non-Hispanic White and Black populations have declined while the Hispanic population has grown, in the study area, the Black population has increased as growing numbers of middle-class African-American households have widened their search for alternatives to the traditional racially segregated neighborhoods in which they have lived. At the same time, many younger persons of Western European descent who grew up in the neighborhood are choosing areas of the city with more nightlife and excitement, while their parents are retiring to sunbelt locations or moving into age-restricted properties outside of the study area. Table 2 shows the trends in racial composition of the study area.

Age Distribution. The population of the study area is slightly older than that of the city as a whole. Median age for the study area in 2000 was 36.4, in contrast to a citywide median age of 31.5. Similarly, in 2000, 53.0% of the population was 35 years or older, while in Chicago only 44.2% of the population fit into this age range. The comparisons are shown in Table 3.

4 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. Table 3 Age Distribution, 1990-2000

Age Group City of Chicago

1990 2000 2000

Number % Number % %

0-17 15,152 26.1% 15,165 26.8% 26.2%

18-24 5,283 9.1% 4,449 7.9% 11.2%

25-34 9,405 16.2% 6,941 12.3% 18.4%

35-54 14,630 25.2% 18,061 31.9% 26.4%

55-64 5,051 8.7% 4,758 8.4% 7.5%

65+ 8,534 14.7% 7,209 12.7% 10.3%

Total 58,055 56,583

Median Age 36.4 31.5

Sources: U.S. Census; Applied Real Estate Analysis, Inc.

Table 4 Income Distribution, 2000–2005

2000 2005 (est)

Income H’holds % of Total H’holds % of Total

Less than $15,000 1,663 8.2% 1,464 7.2%

$15,000 to 24,999 1,638 8.0% 1,466 7.2%

$25,000 to $34,999 1,588 7.8% 1,423 7.0%

$35,000 to $49,999 2,830 13.9% 2,373 11.6%

$50,000 to $74,999 4,930 24.2% 4,168 20.4%

$75,000 to $99,000 3,369 16.5% 3,405 16.6%

$100,000 to $149,999 3,089 15.1% 4,065 19.9%

$150,000+ 1,287 6.3% 2,100 10.3%

20,394 20,464

Sources: U.S. Census; Claritas; Applied Real Estate Analysis, Inc.

5 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. Table 4a Income Distribution, 2005 By Community Area

Beverly Mount Greenwood Morgan Park City of Chicago

Income % of Total % of Total % of Total % of Total

Less than $15,000 14.6% 13.2% 17.5% 18.4%

$15,000 to 24,999 8.6% 10.3% 10.8% 11.2%

$25,000 to $34,999 9.2% 13.5% 13.8% 11.1%

$35,000 to $49,999 10.7% 12.8% 15.1% 15.6%

$50,000 to $74,999 13.1% 11.6% 12.0% 17.8%

$75,000 to $99,999 14.6% 10.3% 10.4% 10.1%

$100,000 to $149,999 15.9% 13.5% 10.5% 9.6%

$150,000+ 13.3% 14.7% 9.9% 6.2%

Sources: U.S. Census; Claritas; Applied Real Estate Analysis, Inc.

Income Distribution. Although the study area contains households with a range of incomes, middle-income households form the largest concentration. As of 2000, 62.1% of the market area’s households had incomes of $50,000 or more. It is estimated that in 2005 this percentage increased to 67.2%. More surprisingly, the percentage increase of households making $100,000 and more is significantly high, rising 40.9% from 2000 to 2005. This increase is indicative of the high incomes of many of the households moving into the study area.

6 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. CHAPTER III HOUSING CHARACTERISTICS

GENERAL HOUSING CHARACTERISTICS

Housing stock in the market area is largely dominated by single-family homes, with 79.3% of the units in single-family detached structures. A concentration of single-family homes is directly linked to a high home ownership rate, 82.7%. The rest of the housing stock, as shown in Table 5, is largely in 2- to 10-unit structures, though a few larger buildings can also be found in the area.

Table 5 Housing Stock: Number of Units in Structure (2000)

1 1 No. of units 2 3–4 5–9 10–19 20–49 50+ other (detached) (attached) Percentages Market Area Beverly 79.1 1.7 3.9 2.3 5.2 3.6 3.4 0.6 0.0 Mount Greenwood 85.3 1.0 2.4 2.1 1.3 2.0 3.1 2.2 0.5 Morgan Park 72.1 2.7 3.3 5.7 6.5 3.8 4.9 1.0 0.0 Total 79.3 1.7 3.2 3.2 4.2 3.2 3.7 1.2 0.2

City of Chicago 24.8 3.4 17.6 14.4 10.6 5.8 7.2 16.1 0.1

Sources: U.S. Census; Applied Real Estate Analysis, Inc.

The housing stock is also fairly old—approximately 80.1% was constructed prior to 1960, by which time most of the land had been developed. Development after 1960 generally involved infill and redevelopment of previously improved parcels. Between 1990 and March 2000 only about 352 new units were constructed in the area, though we estimate that slightly over 200 units may have been built since 2000. Nonetheless, based on an examination of the permits issued for demolition and new construction shown in Table 7, we estimate a net gain of only about 70 new units between 2000 and 2004 (the latest year for which we have information). A few more units were permitted in 2005 but some of those were undoubtedly offset by demolition permits as well.

7 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. Table 6 Age of Housing Stock 1939 or Vintage 1990–3/00 1980–89 1970–79 1960–69 1950–59 1940–49 earlier Market Area Percentages Beverly 0.7% 0.8% 3.6% 6.7% 24.1% 19.1% 45.1% Mount Greenwood 2.0% 3.5% 7.7% 12.8% 37.4% 25.0% 11.7% Morgan Park 2.7% 1.7% 5.7% 13.9% 26.0% 21.6% 28.4% Total 1.7% 1.9% 5.5% 10.7% 29.1% 21.8% 29.3%

Chicago 4.5% 4.0% 8.5% 13.6% 17.1% 14.3% 38.0%

Sources: U.S. Census; Applied Real Estate Analysis, Inc.

Table 7 New Construction vs. Demolition of Residential Units 2000–2004 New Demolition Net Units Construction Beverly 16 8 8 Mount Greenwood 76 37 39 Morgan Park 95 72 23 Total 187 117 70

Sources: Northeastern Illinois Planning Commission; Applied Real Estate Analysis, Inc.

Tenure

In 2000, 82.7% of the households in the study area owned the housing unit in which they lived. This was up from about 81.0% in 1990. During the 1990s, homeownership increased in all sections of the study area and the number of renter-occupied units declined. The overall change, however, was not dramatic. There were only 591 more owner-occupied units in the Study area in 2000 than there had been in 1990. Some of this change could be attributed to the conversion of rental apartments to condominium ownership, but most of it probably resulted from renter-occupied single-family houses being sold to owner-occupants. The home ownership rate in the study area is almost double the rate for the city as a whole.

8 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. Table 8 Housing Tenure 1990–2000 1990 % of all 2000 % of all Change units units 1990-2000 Market Area Occupied Housing Units Beverly 7,730 - 8,030 - +300 Mount Greenwood 6,849 - 6,910 - +61 Morgan Park 5,504 - 5,449 - -55 Total 20,083 - 20,389 - +306 Owner-occupied Beverly 6,276 81.2% 6,617 82.4% +341 Mount Greenwood 5,924 86.5% 6,038 87.4% +114 Morgan Park 4,075 74.0% 4,211 77.3% +136 Total 16,275 81.0% 16,866 82.7% +591 Renter-occupied Beverly 1,454 18.8% 1,413 17.6% -41 Mount Greenwood 925 13.5% 872 12.6% -53 Morgan Park 1,429 26.0 1,238 22.7% -191 Total 3,808 19.0% 3,523 17.3% -285 Chicago Total Occupied 1,025,174 - 1,061,928 - +36,754 Housing Units Owner -occupied 425,259 41.5% 464,865 43.8% +39,606 Renter-occupied 599,915 58.5% 597,063 56.2% -2,852 Sources: U.S. Census; Applied Real Estate Analysis, Inc.

As shown in Table 9, the percentage of vacant units in Beverly and Mount Greenwood changed by less than one-half of one percent between 1990 and 2000. However, the vacancy rate in Morgan Park increased by 2.7 percentage points during this period: the number of vacant units in 2000 was more than double the number in 1990. Overall, the vacancy rate in Morgan Park was less than 5%. As a rule-of-thumb in real estate analysis a vacancy rate of 3% to 5% is considered normal—an indication that there is room for people to move within the area as well as find a unit to live in when coming from outside the area. However, in neighborhoods with high owner-occupancy rates, the vacancy rate is usually below 3%. In Morgan Park, where 74% of the households own there own home, the overall vacancy rate would normally be lower. The vacancy appears to be concentrated in a portion of neighborhood along the eastern fringe of the neighborhood. This area has a very modest housing stock compared to other sections of the community area. Also, a higher percentage of its units exhibit deferred maintenance than in the rest of the study area and a number of houses have boarded windows—a typical sign of a foreclosure. 9 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. In some South Side neighborhoods there has been a history of brokers selling properties to households that lack the means to maintain the property and who have such fragile finances that the slightest change in their fortunes makes it difficult for them to maintain their monthly mortgage payments. Because such units tend to be FHA insured, it is comparatively easy to find a mortgage broker who will underwrite the loan. This type of situation can result in an isolated foreclosure in almost any neighborhood without causing a problem. However, if the practice becomes a trend, the number of boarded-up houses can have a depressing effect on property values and discourage reinvestment by other property owners. The long- term result is general neighborhood decline. This occurred in the western sections of Roseland in the 1980s and the neighborhood has still not completely recovered.

Table 9 Number of Total Housing Units and Vacancy Rate

Change 1990 2000 No. of units Percent Market Area Housing Units Beverly 7,921 8,197 +276 +3.5% Mount Greenwood 7,024 7,108 +84 +1.2% Morgan Park 5,629 5,732 +103 +1.8% Total 20,574 21,037 +463 +2.3% Vacancy Rate Beverly 2.4% 2.0% - -0.4% Mount Greenwood 2.5% 2.8% - +0.3% Morgan Park 2.2% 4.9% - +2.7% Total 2.4% 3.1% - +0.7% Chicago Housing Units 1,133,039 1,152,868 +19,829 +0.18% Vacancy Rate 9.0% 9.2% - +0.2%

Sources: U.S. Census; Applied Real Estate Analysis, Inc.

10 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. CHAPTER IV HOUSING MARKET TRENDS

RENTAL MARKET

Although less than one in five housing units in the market area is renter occupied (17.3%), supply and demand appear to be closely matched. Rental ranges are $450–$600 for studios; $600–$775 for one-bedroom; $800–$1,000 for two-bedrooms; and $1,100–$1,400 for three- bedrooms. These ranges are comparable to rents in neighborhoods in other parts of the city that have lower incomes but are closer to the Loop. Rents in the market area are indicative both of the neighborhood’s relative desirability and of its distance and comparative isolation from major portions of the city. They are similar to rents in comparably located neighborhoods on the far northwest side of the city. For example, rents in the Norwood Park, Jefferson Park, and Forest Glen community areas exhibit the following ranges: studios, $520–$650; one- bedrooms, $525–$775; two-bedrooms, $795–$950 and three-bedrooms, $850–$1,350. Rents in the study area are not sufficient to support unsubsidized new construction.

Although there are a few single-family, detached houses that are being rented, rental medians in the study area are concentrated in multi-unit structures. The relationship of housing values, price appreciation rates, and rents does not provide an incentive for investors to purchase and lease single-family houses. Thus, the rate of home ownership should remain high.

As a result of the study area’s large population of persons over 65 years of age, there will be a growing market for age-restricted housing over the next10 years. A large portion of this demand will be able to afford market-rate housing, but there could also be a need for at some affordable, age-restricted housing within the next few years. We estimate that approximately 40% of the households headed by a person 65 or older have incomes below $20,000 per year. While most of these households may own their home and have other assets. For those with adequate assets, the expansion of the Washington and Jane Smith retirement community will provide a variety of housing options, whatever their physical condition. However, many retirees who were solidly middle class during their working years now find their retirement income insufficient to maintain a comfortable lifestyle. The high level of apparently low income households indicates there may ultimately be a need for age-restricted housing that would be targeted at lower-income households. Age-restricted developments financed with Low-Income Housing Tax Credits serve households with incomes less than 60% of median; or about $31,000 for a single-person household.

11 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. FOR-SALE MARKET

The study area neighborhoods are not well known by North Side residents, nor even by many South Side residents not living in adjacent community areas. Although demand for housing in the study area has been steady, it has not been overly strong, and appreciation has been lower than in many of Chicago’s neighborhoods. As a result, the existing housing stock offers excellent value.

Demand for housing in the Beverly, Mount Greenwood, and Morgan Park area comes from three major groups of buyers:

1. Households within the study area whose current homes do not meet their changing needs.

2. Young persons who grew up in the area and now want to move back to raise their families.

3. Households from outside of the study area’s neighborhoods—particularly African- American households—who have learned of the area through friends and acquaintances who live in the area.

Quantifying these segments would be pure guess work. For each segment, there are housing alternatives in other parts of the city or region. We know of no studies on what portion of households over age 55 are likely to downsize from a larger housing unit. However, there is substantial anecdotal evidence to demonstrate that many households do downsize their dwelling unit once their children have left home. Although many African-American households might consider the study area as a place to live, the growing number of housing alternatives in both adjacent wards and neighborhoods closer to downtown provide alternatives for this segment of the market. And there are no studies of how many individuals who grew up in the neighborhood and are now starting families, let alone how many want to move back. The evidence is, again, anecdotal. As a guess, we would say that young families with at least one member who grew up in the study area is probably the smallest of the three segments and the segment that may be least interested in a new unit. The segment with the greatest potential interest in a new unit, is probably the group that is changing their housing to accommodate changes in lifestyle. African-American households will probably be equally attracted to new units and existing structures.

AREA tracked sales recorded through the Multiple Listing Service (MLS) of Northern Illinois to evaluate sales trends in the study area. Typically, 90% to 95% of existing home sales are listed through MLS. Exceptions are a few sales made by owners without the assistance of a real estate agent and occasional instances when a broker has a prospective buyer for a new listing and does not bother to list the property through MLS.

12 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. Figure 1

Sources: Multiple Listing Services; Applied Real Estate Analysis, Inc.

In 2005, prices for a single-family home in the study area ranged from $26,000 to $842,000 with a median of $240,000. Single-family attached homes ranged from $60,000 to $249,900 with a median of $135,050. “Attached” single-family units in the study area are typically row houses. Condominium flats are also included in this MLS category, but condo flats are not a common unit type in the study area.

As mentioned earlier in the report, rents in the study area are comparable to sections of the far northwest side of the City. However, as indicated by Figure 1, this does not hold true for residential sales prices. The northwest side community areas of Norwood Park, Jefferson Park, and Forest Glen are strongest in the $300,000-$400,000 range while in the study area, the highest number of transactions is found in the $200,000-$300,000 category. Half of the houses sold in Mount Greenwood were in this price range, as were about 37% of the units sold in Beverly. However, approximately 45% of the sales in Beverly were at prices above $300,000 while only 15% of the sales in Mount Greenwood were above $300,000. In Morgan Park, 69% of the houses sold in 2005 sold for less than $200,000.

The geographic variations in sales prices within the Study area generally reflect variations in the housing stock. Overall, houses in Beverly tend to be constructed of brick and are larger than the wood frame units that predominate in Mount Greenwood. While Morgan Park has some of the largest and grandest houses in the area, it also has some of the smallest and most modest. These smaller units tend to be concentrated in the eastern part of the community area.

13 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. DEVELOPMENT POTENTIAL

Developers are also likely to be attracted to the Beverly, Mount Greenwood, and Morgan Park area. Developers are always looking for opportunities, and with so many neighborhoods in the city having already experienced a renaissance, many developers are out looking for the next “hot” neighborhood. Several factors make the area attractive for developers:

# There is little land available for development; thus, any new project will have limited competition.

# Land is still inexpensive compared to land in other sections of the city; thus new units can be developed and sold for slightly lower prices than would be required for comparable units in other sections of the city.

# With small projects, there is less risk of an extended sellout, thus reducing the risk to the developer.

Product Types

Over the last few years, new construction has been constrained. The dominant structure type has been a single-family house replacing a smaller single-family house that was on the same lot. The demand for these new single-family houses generally comes from within the neighborhood in which the house is located. Occasionally, the new house is occupied by the owner of the house that was demolished to build the larger unit. The market for single-family houses will continue to exist, but because the land for single-family, detached units is scarce, other building types will be more prevalent in the future.

One of the major market segments is the “empty-nester” household that is already living in the study area. The persons in these households are typically in their 50s and 60s and are looking for a living environment that entails less maintenance and upkeep than their current residence. Row houses are attractive to this market, but condominium flats might also be appealing if in the right location.

Younger singles and couples looking to buy their first unit provide a somewhat stronger market for condominium flats. A condominium flat can be a less expensive alternative to a detached house. If condominium flats are located in proximity to a Metra station, they will have an appeal for younger persons who work downtown but still want to be in a study area’s neighborhoods.

The market for new units in the study area is, however, a discriminating demand. Unlike some neighborhoods on the north side of the city where it seems that almost any new product sells quickly for a high price, units in the study area’s neighborhoods have to be carefully targeted to the local market. The experience of two new projects located within a couple of blocks of each other is instructive.

14 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. Beverly Place is a planned 32-unit development on the north side of 103rd Street just east of the Metra station. The design includes 22 townhouses with two-bedroom units priced from $395,000 to $440,000. There are also three- and four-bedroom units, with the largest four- bedroom units priced at $521,000. These townhouses are grouped around a private green area on the interior of the development site and are separated from 103rd Street by a three-story elevator building with retail space on the ground floor and 10 condominium flats on the second and third floors. The prices on the two-bedroom, two-bath condos average about $345,000. A two-bedroom unit with a den is priced about $21,000 higher than the two-bedroom unit but is still about $20,000 less than the least expensive townhouse. The units were being marketed from a storefront sales room with plans and attractive renderings but no model. However, it was apparent that the property was well designed, and the marketing materials implied that quality would be built into the units. As of our visit in late March 2006, five of the condo units and six of the townhouses had been sold.

About one block south of 103rd Street, on the west side of the Metra tracks, is another new development; 10352 South Walden Parkway. This three story 10-unit building sits sideways on an infill lot so that one end of the building fronts on Walden and the main entrance is halfway down the driveway, toward the middle of the property. Although the units are attractive and have quality features, including solid-core oak doors, hardwood cabinets, granite counter tops, and jacuzzi whirlpool tubs with separate showers, they are priced at $279,000 to $294,000 for a two-bedroom unit. The units would appear to be a “steal.” Yet, approximately six months after the building had been completed, none of the units had sold. The building was completed in late September 2005, and was thus being marketed during a traditionally slow season for selling houses. On the day we visited, the units had not been properly prepared for showing. The floors were dirty—in some cases showing muddy footprints. Counter tops could have benefited from dusting and the surfaces of the stairs going up to the second and third floors were covered in some places with brown paper. The project felt incomplete, even though it was obvious that it was essentially ready to move into. While we believe that the weak marketing probably contributed to the lack of sales, in another section of the city the project would have sold anyway.

Although the two developments described above are almost equally convenient to the bank, restaurants, and other retail businesses grouped around the 103rd Street Metra Station, one has had reasonable sales and the other one has struggled. One difference between the two properties, other than the differences in marketing, may be that the Walden Place property lacks “curb appeal.” It seems to hulk on the site, and the asphalt driveway that runs along the north side of the property gives the building the appearance of a modest rental building. In contrast, Beverly Place features a mixed-use building that blends well with its commercial environment and creates a pleasant setting for the townhouses on the remainder of the site. We interpret the sales records of these two developments as an indication of a solid and discriminating market for new units. There is demand for well-designed units in a pleasant setting, but the market will not accept just any new units.

15 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. Factors Affecting the Market

The demand for new housing throughout the Chicago area is limited by the growth of employment and new households. The percentage of the regional demand captured by the city of Chicago has been decreasing for decades. However, over the past 10 years, Chicago’s share of the total has risen from less than 8%to between 15% and 20%. If the city is successful in maintaining this share of regional demand, then it will be absorbing about 5,000 to 6,000 new units per year. However, over the past few years, most of the new units have been developed in and around the Central Area or on the north side of the city. Now new developments are under construction or planned for numerous areas on the city’s south side. With interest rates rising and the market slowing down, projects under construction or planned probably contain enough units to supply the potential demand for several years. Thus any new developments in the study area will be competing with proposed developments of several hundred units in the 34th and 21st wards to the east, as well as other developments throughout the south side and in other parts of the city. While the study area is a very desirable place to live, new developments in adjacent areas will create new and attractive environments that will attract buyers and limit its potential absorption of new units.

CONCLUSIONS

The Beverly, Mount Greenwood, and Morgan Park area has a steady demand for housing from younger couples and families who are attracted to the area’s housing stock and more suburban character. At the same time, it has a growing population of “young” seniors who are looking for alternatives to their single-family houses. Reinvestment in the existing housing stock appears to be occurring in most sections of the study area. The development of new townhouses and condominiums in the study area will meet the needs of many couples whose children are no longer living with them, while making more single-family units available to accommodate younger households. Some new development will reinforce the investments being made in the existing housing and keep the neighborhood in the public eye. Small, strategically located townhouse and condominium developments will provide a slow, stable transition in the neighborhoods and enable them to remain multi-generational as the current population ages. The alternative is a neighborhood in which the older residents slowly dominate the area and then as they die or move to alternative accommodations in other areas, a wholesale transition of the population occurs in just a few years.

16 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. CHAPTER V POLICY RECOMMENDATIONS

INTRODUCTION

This portion of the study examines housing-related concerns, issues and opportunities in the Beverly, Mount Greenwood, and Morgan Park area and formulates recommendations to provide policy guidance. Such policy guidance may be useful in making case-by-case decisions that may affect housing and residential development in the study area. Examples might include: 1) requests for zoning changes; 2) requests for development approval that may set a trend; or 3) disposition of City-owned property. The material in this section of the report is informed by the market assessment of the Beverly, Mount Greenwood, and Morgan Park area performed by Applied Real Estate Analysis, Inc. (AREA).

EXISTING HOUSING CHARACTERISTICS & DEVELOPMENT PATTERNS

To help frame the issues, opportunities and concerns associated with housing and residential development and redevelopment, an assessment was performed of existing housing characteristics and development patterns. This assessment involved field studies of housing and neighborhood conditions, review of market data supplied by AREA, and analysis of existing land use and zoning patterns.

The study area represents a very strong and stable residential community. Its location on the south and southwest fringe of the City gives the area a more suburban flavor than that of community areas to the east and north. The predominant housing type is single family detached, comprising almost 80% of the total dwelling units in the study area. The predominance of single family detached housing reinforces the suburban flavor of the area. Other strong housing characteristics include generous lot sizes, attractive traditional residential architecture and housing prices that are higher than adjacent neighborhoods yet still represent a good value for the housing dollar.

Existing housing characteristics and development patterns help to create a particular lifestyle within the study area. This lifestyle emphasizes domesticity, raising of families, community life focused around local schools and churches, and commuting to the City and surrounding areas for work, shopping and entertainment.

17 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. Neighborhood Characteristics

Figure 1, Neighborhood Districts, outlines Camiros’ assessment of the main residential neighborhoods within the study area. The configuration of these neighborhood districts reflect the divisions of the study area into discrete residential areas based on major roadway corridors and land use patterns. The divisions are useful in terms of describing characteristics prevalent in these districts, as outlined below. Photographs showing representative housing stock in the various districts are shown on Figure 2, Housing Character.

North Beverly. The area north of 95th Street contains some of the most attractive and expensive housing in the study area. The area close to the Dan Ryan Woods Forest Preserve, with its winding streets, wooded hills and large houses, compares favorably with neighborhoods in the suburban North Shore. North Beverly contains almost no building deterioration or vacant lots and clearly represents the strongest housing market in the area.

Beverly. The area south of 95th Street, north of 107th Street and east of Western Avenue contains a variety of housing and development conditions. Some of the largest and most beautiful homes can be found here, particularly along Longwood Drive. A number of other very desirable residential areas existing in this district. Beverly also contains small business districts focused around the Metra commuter train stations at 99th Street, 103rd Street and 107th Street. These small, intimate business districts are reminiscent of those found in suburban communities and help create a sense of charm within the study area. In addition to single-family development, multi-family housing also exists in various locations, particularly along Hale Street in the RT-4 zoning district. Residential weakness also exists within this area, as represented by the eastern portion of the district east of Prospect Avenue. Conditions that contribute to this residential weakness include building deterioration, vacant lots/buildings and boarded windows.

Morgan Park. The area south of 107th Street and east of Western Avenue also contains a variety of conditions. As a whole, the Morgan Park district is very solid and desirable. Homes along Longwood and Lothair Avenue represent some of the largest and most beautiful homes in the study area. Along with single family homes, multi-family dwellings are also scattered throughout the districts, with a concentration along 111th Street and surrounding the 111th Street Metra station. An area of residential weakness also exists in this area east of the railroad tracks and south of Monterey Avenue. This area contains a concentration of vacant lots and deteriorated housing. Some recent residential building has occurred in this area, mostly in the form of single family and two- flat infill development, though, the quality of these infill developments do not reflect the high standards of the rest of the study area. Pockets of residential weakness also exist north of Monterey and east of Hermosa Avenue.

18 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. 87th St Dan Ryan Woods: Cook County Forest Preserve

91st St

95th Street North Beverly Commercial Corridor Western Ave. Commercial 95th St

Corridor Beverly Ave

Damen Ave

St. Xavier University Ridge Country Club 99th St Mt. Greenwood Cemetary

Prospect Ave

Pulaski Rd Beverly

Western Ave

Central Park Ave

Kedzie Ave 103rd St

Talman Ave Longwood Ave Longwood

Mount 107th St 107th St Greenwood West Beverly/ 111th Street Morgan Park Morgan Park Business St. Casmir District Lithuanian 111th St Cemetary 111th St

California Ave

Cicero Ave Mount Greenwood Longwood Ave Vincennes Ave 115th St 115th St

FIGURE 1 Mt. Olivet Cemetary APRIL 2006 Neighborhood Districts Feet 19th Ward Housing Study 119th St 0 500 1,000 2,000 3,000 4,000 Prepared for: The City of Chicago Prepared by: Camiros, LTD. North Beverly North Beverly Mt. Greenwood Mt. Greenwood

Beverly Beverly - Ridge Historic Area West Beverly/Morgan Park Morgan Park

Note: Refer to Figure 1 for Neighborhood District Location FIGURE 2 Housing Character 19th Ward Housing Study APRIL 2006 Prepared for: The City of Chicago Prepared by: Camiros, LTD. West Beverly/Morgan Park. This district is located west of Western Avenue and east of the Mount Olivet and Mount Greenwood cemeteries. In this district, housing and development patterns are defined less by large and impressive houses and more by solid, attractive middle-class housing. Very little residential weakness exists in this area.

Mount Greenwood. The Mount Greenwood district is well-defined as a separate enclave located west of the cemeteries in the southwestern corner of the study area. Mount Greenwood is surrounded on three sides by suburban municipalities. Part of the district’s appeal is due to its remoteness. Mount Greenwood functions as a distinct community with its own schools, churches and business district. Housing in Mount Greenwood is desirable and very little weakness exists in the area, though housing in this district does not contain the large, impressive homes found in some other parts of the study area. In spite of their modest nature, the houses are generally well- maintained. Also, some of the smallest and most poorly constructed houses in the study area are located in the Mount Greenwood district. However, the low value of these houses represents a market opportunity for replacement housing via demolition and new construction (teardowns). Much of this activity in the study area is taking place in Mount Greenwood.

Zoning Patterns

By and large, the study area’s existing pattern of zoning reflects current land uses. Figure 3, Existing Zoning Map, is a reproduction of the existing zoning map from the City of Chicago Zoning Ordinance. The existing pattern of zoning does not reflect significant potential for land use change and/or redevelopment. Unlike other parts of the City, the study area contains very little industrial zoning. In recent decades, the market for industrial land has dissipated, opening up opportunities for commercial and residential redevelopment. Such opportunities do not exist in the study area, suggesting that large-scale changes to the current land use pattern are unlikely. The lack of larger-scale redevelopment sites means that any redevelopment that does occur will be of a small-scale infill nature.

Housing and Development Related Issues

The purpose of assessing housing conditions and development patterns was to define a series of issues and concerns to be addressed in the Beverly, Mount Greenwood, and Morgan Park study. In addition to the housing conditions and development pattern assessment, Camiros, Ltd. and AREA, Inc. met with community organizations and community representatives to discuss issues and concerns. The input from community organizations included meetings with the Beverly Area Planning Association, the Mount Greenwood Local Redevelopment Corporation and the Beverly- Morgan Park CDC. Five key issues and concerns have been identified through our conditions assessment and community outreach.

21 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. Legend 19th Ward Boundary Business Commercial Industrial Planned Development Public Open Space Residential, Single-family Residential, Multi-family

FIGURE 3

APRIL 2006 Existing Zoning Feet 19th Ward Housing Study 0 500 1,000 2,000 3,000 4,000 Prepared for: The City of Chicago Prepared by: Camiros, LTD. Development Pressure. Community officials have received requests for approval and endorsement for new residential developments in various parts of the study area. The nature of the proposed development projects vary. Responses to these requests could represent precedents that will frame future responses for development approval requests. Formulating policies that can be used to guide decision-making on requests for new development is an important issue.

Changes to Community Character. The character and lifestyle of the residential neighborhoods in the study area are very distinct. This character and lifestyle reflect low density development and quasi-suburban living. Residents move to the study area, or remain there, because they like this type of character and lifestyle. New development that detracts from the existing character of the community would not be well received.

Pockets of Residential Weakness. While the overall condition of housing and residential land use in the study area is very strong, there are pockets of weakness. These pockets of weakness should be viewed as potential threats to the health of the larger community and efforts should be undertaken to improve conditions in these areas.

Strengthening Commercial Areas. The commercial and business districts of the study area have, like many in the City, struggled to maintain viability. While this is not directly related to housing issues, there is an indirect relationship. Many Chicago neighborhoods have experienced significant new mixed-use developments. In such developments, the ground floor is commercial space while the upper floors are used for residential units. Often, it is the residential component that drives the development. In effect, the strong residential market can be used to bolster the commercial market. Relative to the study area, the question is, should mixed use development be encouraged to strengthen the study area’s commercial areas?

23 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. POTENTIAL DEMAND FOR RESIDENTIAL DEVELOPMENT

All new development results in benefits and liabilities for the host community though it is hoped that the benefits outweigh the liabilities. In the Beverly, Mount Greenwood, and Morgan Park area, the question of potential new residential development is particularly sensitive. The issues and concerns discussed in this section of the study suggest that new residential development would represent a net benefit to the community only under certain circumstances.

A key consideration with respect to housing development policies is how much residential development could occur within the study area. That is to say, if policies were adopted that encouraged certain types of residential development, how much development would occur? The potential for new development underlies much of the policy formulation to be addressed in this study.

Quantifying development demands potential is possible in certain situations, and firms like AREA are able to arrive at reasonable projections. In the case of the study area, precise projection of demand is not possible for a variety of reasons. The key limitations that make such projections difficult are the lack of development sites and development control regulations/policies that do not encourage new development.

Camiros has inventoried known development projects and proposals in the study area for the purpose of quantifying current developer demand. The total number of dwelling units represented in this inventory is approximately 500. In some cases, sites have remained in inventory without specific development proposals generated because policies are not currently conducive to site development. For projects or parcels where there was enough information available, we have estimated the number of units that might be possible on the site.

Many of the sites included in the inventory have taken several years to put together. Clearly, the 500 unit figure represents 4 to 5 years of developer demand. Because current development policies are not “pro-development,” the projects included in the inventory probably represent the best sites with most viable development potential. Given this inventory, it appears that something in the range of 100 to 150 units of residential development might be proposed for development each year.

It must be stressed that this inventory represents “developer demand,” not “buyer demand.” A different, more development-friendly, set of assumptions could be used to arrive at a higher level of residential demand. These assumptions would include larger-scale mixed use development along the major commercial corridors of Western Avenue and 95th Street, as well as selected rezoning of property to allow for higher density. Such assumptions were not used because they are inconsistent with community character and the local lifestyle.

24 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. RESIDENTIAL DEVELOPMENT POLICY RECOMMENDATIONS

Given the market profile provided by AREA and the community assessment performed by Camiros, a series of policy recommendations has been formulated to help assist decision- making regarding proposed development, as discussed below. In general, these policy recommendations seek to reinforce the existing strengths of the community, which are seen as the quasi-suburban lifestyle, high-quality buildings and attractive community appearance. This approach is considered to be the best way to maintain and enhance both the desirability of the study area and local property values. The proposed policies presented are not listed in order of priority, although the discussion provided does highlight policies which are particularly important.

Community Development Standards

One area of the recommended policy concerns maintaining the existing high community development standards. The neighborhoods within the study area are known for their high quality residential buildings, attractive traditional architecture and generous landscaping and green spaces. It is recommended that any approvals for new development be conditioned on maintaining these high standards. Essentially, this issue involves maintaining consistency with the existing character of the community. It is recognized that there may be pressures to compromise these high standards, however, development approval, under most circumstances in the study area, should be considered a privilege, not a right. Maintaining high standards will benefit developers as well as local residents. The Beverly Place project at 103rd and the Metra tracks, shown on Figure 4, Beverly Place, is a good example of new development reflecting high community standards. Examples of standards that reflect existing neighborhood quality might include:

· Masonry exteriors on all commercial and multi-family developments. · An emphasis on architectural design compatible with the traditional character of the Study area. · The use of quality exterior building materials. · Attractive, high quality landscaping on all projects.

It is especially important to maintain high standards in weaker areas of the study area to ensure that they are fully integrated into the community. This might create financial hardship on the developer; the City and study area would be well advised to use the financial incentives at their disposal to fill any gaps in order to maintain quality in new development.

Strengthen Weaker Residential Areas

Among the most important policy considerations would be to strengthen weaker residential areas in the study area. These areas are characterized by vacant lots, a greater incidence of building deterioration and deferred maintenance and lower property values. Generally

25 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. speaking, these weaker residential areas are located on the eastern edge of the study area south of 103rd Street. A number of incentives could be used to induce reinvestment in quality residential investment in these areas, including:

· Creation of a targeted neighborhood incentive program. · The sale of City-owned land at below market rate. · Assistance with land acquisition to form developable parcels. · Selective rezoning to permit compatible townhouse development in appropriate locations. · Formulating a redevelopment plan for a transit node around the 115th Street station.

Reinforce Metra Station Transit Nodes

Another area of priority in approving new development is in areas of close proximity to Metra commuter stations. The presence of these stations, along with small business districts and residential units within walking distance of the stations, contributes considerable charm and character to the Beverly, Mount Greenwood, and Morgan Park area. Reinforcing these nodes through selective infill redevelopment would have a positive affect on the neighborhood. Attractive development projects could include mixed-use programs or townhouse units. Again, the Beverly Place project serves as a good example of reinforcing a Metra station node. It contains both mixed-use development and townhouses. Particular aspects of development to be encouraged might include:

· Conversion of single-story commercial space to two or two and one-half story mixed-use development. Upper story condominium units should only be approved where attractive ground-floor retail space is leveraged, such as retail stores and restaurants. Service uses and offices may appropriate, but should be reviewed on a case-by-case basis.

· Adding deteriorated single-family property into a redevelopment site when such property is adjacent to commercial use and would not disrupt the logical transition of density into the single-family neighborhood. For example, including one or two single-family properties to a commercial redevelopment project may be appropriate if those properties are on the same block as the commercial uses and the new redevelopment project extends to a block corner. This would create a logical edge where residential use is on one side of a street and commercial/mixed-use is on the other side of the street.

· Selective conversion of appropriately located single-family property into compatible townhouse use, where such property can form an effective edge

26 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. FIGURE 4 Beverly Place 19th Ward Housing Study APRIL 2006 Prepared for: The City of Chicago Prepared by: Camiros, LTD. to the transit node. An example of such a property is at the northeast corner of 99th Street and Longwood Drive.

· The 95th Street Metra station area could be viewed as either a transit node or part of the 95th Street commercial corridor. The commuter parking lot has been identified as a potential development site. As a stand-alone development project, the commuter station site would appear to be only marginally attractive as a redevelopment site. If the broader area around the station could become a neighborhood-oriented transit node, it might make sense to pursue the commuter station project as one step in a larger redevelopment program.

In-Fill Development Sites

While existing land use and zoning patterns do not provide opportunities for larger scale redevelopment, smaller in-fill sites could become available. Depending on its specific location and characteristics, the redevelopment of an in-fill site could be beneficial to the neighborhood. The reasons for this could include: 1) obsolescence of the current use of land; 2) vacant land; and 3) inefficient use of land. Infill development could take the form of an adaptive reuse, such as a church being converted for residential use or intensification, such as two or three large lot homes being redeveloped for four or five smaller lot homes, The in-fill project located on the former cemetery property on 111th Street near Sacramento Avenue is an example of a well executed redevelopment project that fills a market niche in the community. Beverly Place is another example of infill development. Criteria used to evaluate the benefits of a proposed in-fill project would include:

· The project would respond to a need in the community. · The project would not disrupt land use compatibility in the immediate area. · The project would be compatible with the character of the immediate area. · The existing use of the site is obsolete, undesirable and/or inefficient.

Strengthening of Commercial Districts

In general, leveraging residential market demand to induce mixed commercial/residential development is not a recommended vehicle for improving or strengthening major commercial districts. Aside from the smaller business districts associated with the Metra commuter stations (discussed earlier), most of the commercial space in the study area is located along major arterial highways, 95th Street and Western Avenue. The high traffic volumes along these streets would not make for attractive residential environments. Residential units in these locations would tend to be less desirable than new units elsewhere in the study area and thus would have to be comparatively lower priced. To accomplish this, a developer would have to skimp on quality, or increase density—neither of which would be particularly desirable for the neighborhood. In addition, given the heavily automobile-oriented nature of much of the retailing along these strips, there is no guarantee that the retail space in such mixed- use buildings

29 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. would be considered any more desirable than the residential component.

The only other commercial district in the study area is the 111th Street district in Mount Greenwood. While 111th Street carries a high level of traffic, the volumes and speed of traffic does not compare with 95th Street or Western Avenue. Residential units as part of mixed-use development could exist in a reasonable living environment. The recommendation against using residential to leverage retail would generally apply to large sections of this strip. However, there is a concentration of older retail buildings and establishments on 111th for two or three blocks on either side of Kedzie. This area was originally more pedestrian-oriented and is currently experiencing some vacancy and underutilization. Here one or two levels of residential development above commercial space could help strengthen the commercial strip. Land values are likely to be lower than on Western and would thus have a lower per-unit impact on the price of the residential units in a small project.

The Founder’s Bank site, which has been the subject of a specific study, illustrate’s how such a development might work in the vicinity of Kedzie and 111th. See Figure 5, Founder’s Bank Site, Existing, and Figure 6, Founder’s Bank Redevelopment Plan.

Given this assessment, the following policy recommendations are offered with respect to proposals for mixed-use development within the commercial districts of the study area: · Mixed-use development on 95th Street and Western Avenue should generally be discouraged. However, a unique projects that would bring a desirable retail use to the street should be considered, with considerable attention paid to the design and overall quality of the development. Given the difficulty in recruiting a quality commercial/retail development on these arterials, residential use should not be completely foreclosed as an option to formulate a viable development program. · Areas along Western Avenue and 95th Street not viable for retail use should be considered for service uses. These could include a variety of non-retail uses and businesses that have economic value and contribute to the community. On the very fringes of the commercial development, conversion to residential only might also be appropriate. · Mixed-use development around Kedzie and 111th Street may be considered if attractive retail uses can be leveraged. Larger sites, such as the Founder’s Bank property, would be more attractive because it could support larger retail users not currently found in the business district. · Building height would be limited to 2-1/2 stories to maintain compatibility with neighborhood character. The plan does show the expansion of the redevelopment site to include a number of existing residential properties. While not intending to disrupt families or create hardships, the expansion of the site would expand the possibilities for attractive redevelopment. The plan also calls for controlling commercial traffic to protect the existing neighborhood to the north.

Figure 5

30 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD.

· The western portion of the 111th Street commercial district weakens considerably. Future retail development in this area is not realistic. Stand-alone residential uses should be permitted here. The precise point at which the business district should end is open to discussion. However, it appears that this point should be somewhere in the vicinity of Central Park Avenue. The same situation applies to portions of Kedzie and Pulaski, where commercial use cannot be sustained in all commercially zoned land and some stand alone residential development may be appropriate.

SUMMARY

This section of the Beverly, Mount Greenwood, and Morgan Park Housing Study has sought to provide policy guidance to help in considering requests for development approval. An assessment of housing conditions and land use/zoning patterns was performed to provide a context for the identification of housing and residential development-related issues. The issues identified speak to concerns about population growth, development pressures, and development that would be incompatible with the character and lifestyle of the study area.

As a result of this analysis, a series of recommendations were formulated to provide guidance in considering proposals for new development. These recommended policies were not offered as hard and fast rules, but rather, as suggestions for setting priorities and considering the precedents that may be formed by certain development approvals. The recommendations include:

! Focus residential development at transit nodes and on infill sites scattered throughout study area.

! Single-family houses will be most appropriate for most infill locations.

! Higher density condominiums and townhouses should be encouraged around transit stops. This type of development will provide housing alternatives to younger couples and empty-nester couples who want to be in the neighborhood but do want a house and yard.

! Mixed-use residential development should generally be discouraged in the most active retail/commercial districts; especially along sections of Western Avenue and 95th Street.

! Weaker retail locations within these strips can still be viable for services and institutional uses.

! Locations at the fringes of major retail strips may be considered for conversion to exclusive residential use.

33 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD. ! One non transit-related retail district, at 111th and Kedzie, may be an appropriate location for limited mixed-use, residential-commercial development.

The overriding policy governing all new development projects should be the maintenance of the study area’s reputation for quality housing. Whatever other policies may be relevant in evaluating specific residential proposals, all approved projects should meet the following criteria:

! The project should respond to a need in the community. ! The project should not disrupt land use compatibility in the immediate area. ! The project should be compatible with the character of the immediate area. ! The project’s quality of design and construction should maintain the high standards for which the study area is known.

34 APPLIED REAL ESTATE ANALYSIS, INC. CAMIROS, LTD.