Dec. 10, 2008 – It is touted as being one of the hottest and fastest-growing residential neighborhoods in the city, but despite the rapid rise in development that has occurred in this trendy area, even the South Loop is not safe from the ill effects of the looming recession.
It is perhaps most evident at night, when the myriad of new condominium buildings stand tall and dark against the city's skyline. The construction on most of these buildings has come to an end and residents of the purchased units are fully moved in. But their lit-up windows are outnumbered by dark, empty units.
In an annual West Loop Town Hall meeting in late November, Ald. Robert Fioretti of the South Loop's 2nd Ward addressed the crowd of constituents about a rise in home foreclosures in the neighborhood.
"They're happening right here in this community," Fioretti said. "In the condos, in homes. We are in a tough economic crisis."
According to Fioretti, there have been approximately 500 South Loop foreclosures in the last year.
"Five hundred families are no longer paying taxes, that means 500 empty homes, 500 boarded-up homes," he said. "And if we don't find a way to end this financial crisis, then we're going to have a city that has a lot of problems."
A report by Appraisal Research Counselors said that the downtown market had only 161 condominium sales in the third quarter of 2008. That is the lowest number of sales since the downturn in 2001 that followed the 9/11 attacks.
"Sales have definitely slowed, as have rentals," said Ken Baker, a Prudential real estate agent in the South Loop. "It's a tough time for everyone, and even with reduced sales prices, not many people have the ability to buy right now."
According to the Downtown Chicago Residential Benchmark Report, there were 74 new-construction condominiums, 62 condo conversion units, 25 adaptive-reuse lofts and one new town home in the third quarter.
Despite the housing crisis, construction and development in the South Loop does continue. While condo sales may be down, the economy has not yet stunted the ever-growing number of students in the loop.
A joint venture of two Chicago-based area estate firms, L&H Real Estate Group and Brownstone Realty & Development Co., has requested a zoning change that would allow for a new dormitory in the East Loop. The current owners of the Buckingham, an existing 456-bed dormitory, submitted the request with the intention to connect the 37- floor building at 51 through 67 E. Van Buren St. to the neighboring building.
The new and existing dorms together would comprise 1,677 beds, which would make it the second largest student housing facility in the city, second to the University Center on State Street, which holds 1,720 beds.
In 2007, according to Chicago Loop Alliance, 2,858 students lived in the loop, a population that is largely responsible for the development of businesses in the once deserted central business district.
"I'm sure that we put a ton of money into the local economy," said Ida Gretch, a student at DePaul University. "Hopefully it will be enough to keep the businesses afloat while they wait for new residents to buy the empty condos."
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