New housing out of reach: What's a village to do?

Opinion: Columns

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By Daniel Lauber

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Part I

What's a village to do when it becomes so attractive that the seniors who made it great can't afford to live there anymore, when its teachers, nurses, small business owners, first responders, librarians, village staff, recent college graduates, physical therapists, and even newspaper publisher can no longer afford to live there?

That's Oak Park's growing dilemma. It has become so desirable as one of the few well-located, stable, racially-diverse communities in the Chicago area that its racial and economic diversity are slowly slipping away as the cost of housing here has soared beyond the means of most Oak Parkers.

Nearly half of Oak Park tenants are considered "cost-burdened," which means they spend 30 percent or more of their gross household income on housing. A quarter of Oak Park renters are considered "severely cost-burdened," spending more than 50 percent of their income on housing. Nearly 30 percent of Oak Park's homeowners with a mortgage are cost-burdened.

Spending that much on housing is just plain bad for them and the local economy. After covering their housing costs — an essential expense — many of our neighbors don't have the income left to make discretionary purchases at local businesses. After paying so much of their income on housing, they don't have money to save to buy a home, cover their children's college tuition, or save for retirement.

To see if Oak Parkers can afford the new apartments and condominiums being built in here, I compiled data from the Census Bureau's latest American Community Survey and information available on the condo prices at District House and the rents at the Emerson, Vantage, and Albion high-rises.

Lo and behold, most Oak Parkers cannot afford to rent or buy in these new buildings. According to the affordability formulae the U.S. Department of Housing and Urban Development (HUD) and the nation's city planners use, a household can afford to spend up to 30 percent of its gross monthly income on rent and can buy a home that costs up to three times a household's annual income.

One of the measures of housing affordability in the many analyses of impediments to fair housing choice that my planning firm has conducted for jurisdictions across the nation is whether the median household income of a city is high enough to rent or purchase a home. The median is the midway point: half of a city's households have incomes above the city's median and half below it.

Oak Park's median household income is $82,826 and the median for nonfamily households (single people, roommates) is $45,310. The least expensive condominiums at District House sold for $600,000, which required an annual household income of at least $200,000, well above the $82,826 Oak Park median. Even a median-income married couple with a $141,197 household income — the highest income group in Oak Park — could not afford to buy the least expensive condo at District House.

Thanks to the census providing more fine-tuned data by income range, we can more precisely estimate the proportions of Oak Park households that can't afford new construction. Just 16 percent of Oak Park households enjoy incomes over $200,000, leaving 84 percent of Oak Park households unable to afford even the least expensive District House condominiums.

As the three tables accompanying this article show, most of the lowest-priced new rentals are out of reach for most Oak Park households. At the Albion high-rise under construction, you'll need a household income of at least $55,400 to afford a studio apartment; $66,515 for a convertible unit; $74,880 for a one-bedroom; $105,840 for a two-bedroom; and $145,600 for a three-bedroom.

Singles and roommates face the greatest hurdles even with the studio apartments targeted to them. Fifty-eight to 63 percent of them cannot afford the least expensive studio apartment; 70 percent can't afford a convertible unit.

As the tables show, more than a third of Oak Parkers can't afford a studio, convertible, or one-bedroom in any of these new buildings. Fifty-four to 60 percent cannot afford a two-bedroom and 73 percent cannot afford a three-bedroom — and those are for the lowest-rent units.

That can only lead to the whitening of Oak Park since the median household income for African-American Oak Park households is just $54,289, more than $41,000 less than white households. The only new residential units that a median-income black household can afford are the lowest-rent studio apartments — not exactly suitable for a family with children.

I imagine that if you don't value the village's racial and economic diversity, there's nothing wrong with this picture. But if you do value Oak Park's diversity — which is at the core of what Oak Park is and stands for, at least according to adopted village plans and policies — then the village board needs to act proactively to bring to Oak Park housing that current residents with modest and even not-so-modest incomes can afford. 

Next week: The key tool available to do just that.

Daniel Lauber, AICP, a River Forest resident, was principal author of Oak Park's Comprehensive Plan 1979. A planning consultant and fair housing attorney, he has testified to both houses of Congress on affordable housing. He is a past president of the American Planning Association and the American Institute of Certified Planners.

Reader Comments

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Tom MacMillan from Oak Park  

Posted: October 16th, 2018 12:14 PM

It is really creepy to have some so called expert discussing, in broad daylight, the "whitening" of Oak Park. So now it is a bad thing, when a new family moves into Oak Park, if they are a color that this River Forest "expert" has decided we have too much of? Maybe he needs to tell us what the exact percentages are that everyone is supposed to be, since he is such an expert. How about if anyone who wants to can move here, if they can afford it, and no one gets bent out of shape over what race they are. Put that in a chart and graph.

Christopher Bell  

Posted: October 16th, 2018 5:30 AM

The cost of owning in Oak Park fully loaded is becoming out of reach for many middle class younger families. A neighbors house has been for sale and given taxes of $26k and other cost of home, couple needs $200-224k in income to afford the home. The house has been for sale for 7 months and they indicated from agent that homes above $400-500k are not moving due to rising interest rates and high taxes.

Bruce Kline  

Posted: October 15th, 2018 10:37 PM

Well Ada, good luck. The operative word is "currently." We've already been taking a look at FP. And it's quite a revelation, let me tell you. By the time you are ready, I bet, you might be surprised at what you find. HINT: it won't be the "old" FP of low housing cost and rock bottom property taxes, that I can assure you ... probably more like OP West. PS: Good luck selling your house.

Ada Johnson Tikkanen  

Posted: October 15th, 2018 7:12 PM

it's a shame, and it's reality. And we have some incredible neighboring burbs in Forest Park and Elmwood Park that are currently more affordable. People may say the schools aren't as good, but it takes a village to create better be a villager. Most of us cross the borders from Oak Park to Forest Park to Berwyn to Elmwood Park daily. There is no difference. We are basically the same community. Once our kids are out of high school we're planning on moving on. Forest Park is number one on the list.

Kline Maureen  

Posted: October 15th, 2018 6:36 PM

funny thing, Stephen Miller, it wasn't that long ago when the most affordable housing was that closest to the city center (well, OK maybe 30 or 40 years ago, so maybe that was a long time ago, depending on your perspective)

Stephen Miller  

Posted: October 15th, 2018 6:01 PM

Is there any community in the world where the newest housing, built in the heart of the community, is developed as affordable housing. Surely it is the wrong question to ask if our lowest income residents can afford our most expensive housing.

Mike Hanline  

Posted: October 12th, 2018 9:06 AM

And did I hear that now D97 is asking for yet another tax increase??

Josh Vanderberg  

Posted: October 11th, 2018 11:16 PM

A great card stack on affordable housing. I've linked into the card on 'filtering' - - but go back or forward, it's all good stuff. Explaining how, if you block luxury development, people just buy up houses and build them out into mansions, taking middle class housing off the market. Sound familiar? Simply put, there's only one way to fight demand. That's with supply.

Tom MacMillan from Oak Park  

Posted: October 11th, 2018 9:13 PM

Perhaps Mr. Lauber should develop some buildings and charge whatever rent he thinks is fair. He worries a lot about Oak Park condos for a guy living in River Forest. One thing is certain, the new buildings in Oak Park will be occupied by Oak Parkers.

Christopher Bell  

Posted: October 11th, 2018 1:42 PM

Josh - you are correct if and only if demand is constant. The data shows people are spending more than 30% of income. There are many others issues to unpack but bottom line is OP is an inflection point with few good long term options. As we have seen with ATM, people moving to OP apartments often have 3-4 students (total cost of $45-60k to educate) while the cost of buying and sustaining a home becomes more difficult /unattaiable(data shows homes in Oak Park over $400,000 have not been selling - as young families cant afford). Therefore, if fewer higher income families can buy homes and more families move into apartments Oak PArk will face a long term housing issue as well as school funding issue (which means more taxes and makes the problem worse). This is exactly the opposite desired effect the OP Board wanted but it is the likely reality.

Brian Souders  

Posted: October 11th, 2018 1:04 PM

Man, people really like to pick on these downtown high-rises! I know it's counter-intuitive, but the idea that more upscale rental units will relieve the presure on middle-type/vintage rental units across the village has been presented to the board by experts last fall at their affordable housing summit. It's a common concept in planning called "filtering." I'm guessing his solutions next week will not be "make tough decisions to hold the line on taxes." By the way, having so many of these units coming online not suitable for families with children (mostly studios, 1BRs) is a feature, not a bug ?" they're a huge tax burden ($15-25,000 per kid).

Josh Vanderberg  

Posted: October 11th, 2018 12:50 PM

Dion - is that a counterargument? Because 'what I am smoking' is basic, well documented economics. I've even seen property owners complaining about weakening rents in more vintage housing stock.

Dion Ewald  

Posted: October 11th, 2018 12:13 PM

Josh, I want some of what you're smoking.

Josh Vanderberg  

Posted: October 11th, 2018 11:49 AM

This entirely misses the point. The new building are not affordable housing. They enter the housing supply at the high end, and take pricing pressure off of older housing stock that is currently being used by high end renters who have no other options. As these people move up, rents will drop in older housing stock, and people will move up, decreasing rents in yet older housing stock. Supply is supply, even at the high end, and all other things being equal it will decrease overall rents in Oak Park.

Neal Buer  

Posted: October 11th, 2018 10:27 AM

Here's an interesting concept - Let the builders build what they think they can rent or sell within the existing zoning.

Tom MacMillan from Oak Park  

Posted: October 11th, 2018 8:24 AM

There is nothing wrong with this picture. What is wrong is the never ending rise in property taxes, which makes housing everyone already lives in more expensive to rent or own, in a never ending upward grind of tax increases. District House costs too much? So what.

Jim Coughlin  

Posted: October 11th, 2018 1:43 AM

I appreciate Mr. Lauber sharing his expertise on the issue and hope that his recommendations will be part of a Village board discussion on addressing the dwindling prospects for current residents who want to stay in Oak Park.

Mary Jo Erickson from Oak Park  

Posted: October 10th, 2018 9:19 PM

What is the rationale behind bitterly complaining that three new high rise towers will provide housing that is allegedly too expensive for most Oak Park denizens? To the best of my recollection the building plans were never presented as anything other than luxury housing. Isn't it a little late to be complaining about the cost of the units? Rather than wagging his finger at OP for potentially attracting well to do non-minorities at some point in the future, why doesn't Lauber himself move to Oak Park where he could then lead the vanguard of the battle against whatever it is he is fighting?

Nick Polido  

Posted: October 10th, 2018 2:32 PM

Nowhere in Mr. Laubers missive does he discuss the confiscatory real estate taxes Oak Parker's pay. It is easy for a non resident to come up with solutions on how to maintain Oak Parks diversity. I'd be interested in River Forest demographics and there contribution to these housing dilemmas.

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