WBEZ | Dennis Rodkin

Chicago considers eminent domain to curb foreclosures

Mon, 20 Aug 2012 07:00:00 -0500

Earlier this summer, San Bernadino County, an area east of Los Angeles hit hard by the mortgage crisis, considered a plan that could potentially help homeowners whose mortgage payments exceed the actual value of their property. The ostensibly simple idea, proposed by the California firm Mortgage Resolution Partners, would have the county purchase so-called underwater loans at market value using eminent domain, thus allowing homeowners to refinance and stay put, rather than face foreclosure.

MRP, which says the plan could be tailored according to the needs of local communities, would help local governments broker the deal for a fixed fee. San Bernadino has not moved forward with the plan, but their interest caught the attention of a number of cities and counties around the country, among them Chicago.

Alderman Ed Burke held a hearing at City Hall last week (which, as noted by local media, attracted the likes of John Cusack) to consider the idea.

“Renegotiation of underwater mortgages by the private sector has failed to keep pace with this epidemic,” Burke said in a statement. “Even with record low interest rates, many homeowners have found it difficult to refinance due to newly tightened lending standards and depressed home values.”

To be sure, Cook County could use a fresh injection of ideas, when it comes to the foreclosure crisis. According to the Woodstock Institute, one in four homes in Cook County is underwater. The crisis has hit black and Latino areas especially hard.

Without Mayor Rahm Emanuel’s approval, the idea is likely to be dead on arrival. "I don't think it's the right way to address the problem," Emanuel told reporters at an unrelated news conference. "I don't think it's (in) the power of the city to do, to deal with the housing issue.”

Chicago Alderman Roberto Maldonado, whose ward covers the Humboldt Park area, thinks using eminent domain could be an effective way of stabilizing home prices and avoiding foreclosured properties, which can remain vacant for years and blight a neighborhood. He joins Eight Forty-Eight on Monday to discuss eminent domain, along with Chicago magazine Deal Estate columnist Dennis Rodkin.

Northwestern University law professor David Dana will also join the discussion. He supports the idea of doing something to reduce principals for homeowners with underwater mortgages, but thinks the Mortgage Resolution Parners approach raises constitutional questions.

“In eminent domain law, you have to meet both state and federal constitutional requirements, and this is uncharted territory,” Dana said.

Rental market in hip neighborhoods tightens up, causing potential tenants to scramble

Mon, 06 Aug 2012 07:18:00 -0500

The end of summer is always one of the busiest times for the Chicago rental market. Tenants looking to move in September 1st usually start their apartment search around now. But as WBEZ found out, this year those renters might be too late.

A recent apartment showing in Ukranian Village is a prime example. There wasn't much to see in the two bedroom apartment; it was basically empty, except for some boxes and an old dust-covered stove that stood in the to-be living room. There weren't any light fixtures, countertops or cabinets, either.

And yet the property manager showing the unit — Mike Shenouda — seems totally confident that this unit will go, and fast.

"People usually, we usually post an apartment, give it a day, show up that night and usually someone rents it," he said. And that goes for unfinished apartments like this one.

In just under an hour, Shenouda shows a dozen people around the 1100-square-foot apartment. He says business has really picked up over the last year, and monthly rents have skyrocketed. This unit, for example, would have gone for a grand five years ago. Now Shenouda’s asking $1500. Fewer people are buying houses, he says, and that means more renters.

Which is exactly what Megan Russell, one of the potential tenants, is afraid of.

"I’ve been looking for September first and I’ve been looking for two to three weeks. I’ve been on Craigslist non-stop, walking on the streets and calling, and places have been going faster than I could even see them," Russell said.

Russell has lived in Chicago for four years. This time she’s moving in with her boyfriend.

"A couple years ago you could see a place and think about it; now it’s like, if you don’t sign the lease when you see it, you’re screwed," she said.

And Russell’s not alone — other renters WBEZ talked to said the apartment search has consumed their lives. They’re constantly checking Craigslist at work, working all the angles, and even when they rush over to see a place, someone else got there moments before and it’s already gone.

And they all say the same thing: Renting in neighborhoods like Wicker Park, Ukrainian Village or Bucktown is so much harder than then thought it would be.

According to Chicago Magazine real estate expert Dennis Rodkin, the boost in renters has a lot to do with the decline in young home buyers.

"A lot of people were buying who now realize it’s not quite the best idea," Rodkin said. "It used to be great if you were a young adult, it was easy to buy so people moved into the home ownership market sooner. Fewer of them are doing it. And there’s also an inflow of people who were owners, who can’t afford to own anymore, they’ve been foreclosed, sold at a huge loss, and they’ve converted to renting."

And it's not just the hip, northwest neighborhoods that are experiencing the squeeze. According to Appraisal Research Counselors, 95 percent of apartments downtown and in surrounding neighborhoods were occupied for the first quarter of 2012. Ten years ago, that number was under 90 percent.

According to Rodkin, the competitive rental market in these “zones of hipness” as he calls them, will eventually iron itself out. He says the real problem is the city is short more than 100,000 affordable rental units in low-income areas.

"One thing to keep in mind you’re talking about problems in middle and upper income North Side neighborhoods," Rodkin said. "More apartments are being built for upper middle income and wealthy people all the time. And that’s going to lead to a problem — we have a surplus but we have an enormous deficit, a massive deficit of rental apartments for people who have low income."

But for those who still want to move to neighborhoods like Ukranian Village, Rodkin says move fast. Remember that unit Shenouda is showing? That little two bedroom under construction?

It rented just two days after he posted it.

He showed another apartment that night just a couple blocks down the street — a two bedroom, two bathroom unit going for $1600 a month.

It became available last minute because the original renter didn’t have good enough credit. That’s great news for Stephanie Sybrandt and Matt Wintz, who are the first to see it.

The couple is getting married soon and nailing down their first apartment hasn’t been much fun.

"It’s a little frustrating because you get used to picturing yourself inside a place and it used to, a couple years ago, be a lot easier," Wintz said.

As they walk around this place, there’s barely a discussion. In the past, they might have slept on it for a few days. Instead they signed an application just minutes later.

But of course, there’s no guarantee. As they walk out the door, there are four more potential tenants waiting to see the place, too.

Mid-year real estate report shows some signs of improvement

Mon, 09 Jul 2012 08:12:00 -0500

A reader recently asked Chicago magazine Deal Estate columnist Dennis Rodkin why he's so cranky. She perceived his tone as too negative in an environment that seemed to be on the upswing.

She might have been a little right: In this video response, Rodkin does concede that there have been some positive changes on the market recently, but Chicago isn't improving at the same rate as other cities. He says that we're still trying to sell all the condos we built during the boom and Chicago is still one the worst cities in terms of sales. Rodkin isn't all doom and gloom, however; he says home builders are back at work again and well-priced homes are moving their way through the market.

Bob Floss, President of the Chicago Association of REALTORS, is slightly more positive. "First-time homebuyers, move-up buyers and investors are finding compelling pricing and historically low interest rates as a perfect incentive to buy now," Floss says, adding that higher rents are pushing some to make the leap to purchase.

Dennis Rodkin and Bob Floss join Eight Forty-Eight on Monday to discuss the health of Chicago's real estate market. We want your questions and comments, too. Call 312-923-9239 to ask the experts about your home search, or tell us if the market has changed your living situation.

Aging boomers, elderly face difficult housing market

Mon, 11 Jun 2012 07:00:00 -0500

In our regular housing conversations with Dennis Rodkin, we spend a considerable amount of time talking about first-time buyers: what they’re looking for and how they can leverage the sagging market. Monday on Eight Forty-Eight, we look at “last-time” owners, i.e. retirees and seniors looking to sell their home and either downsize, move in with family members or into retirement communities.

In the boom years, retirees could depend on real estate to bankroll their retirement years, but sinking property values have changed the equation. Young families, having heard the horror stories of home ownership, aren’t as eager to buy the properties boomers are selling. Banks, wary of fixed incomes, often turn down retirees looking to refinance their mortgages.

Rodkin, who writes the Deal Estate column for Chicago magazine, advises boomers to ask themselves several questions when deciding where to live and whether to sell or stay put: Does your neighborhood have good transit options? How safe is it? If your mobility is impaired, can you install upgrades to make your current home more senior-friendly?

“Selling can be a very emotional experience for seniors,” said Mike Rickert, chair of the Senior Service Task Force for the MainStreet Organization of Realtors and a guest on Monday’s Eight Forty-Eight. “They’re leaving the home where they raised their kids.” For individuals moving into a form of assisted living, they’re struggling with the loss of independence.

Rickert and other members of the senior task force regularly meet with nursing homes, lawyers who specialize in living wills and tax accountants to better understand the housing needs of the elderly.

He says a lot of real estate agents don’t want to work with seniors because many aren’t looking to buy. The numbers indicate that agents may have to adapt. According to the Bipartisan Policy Center, 26 million boomers plan to sell by 2030.

Are you of retirement age and considering selling your home? Are the child of a senior parent who is no longer self-sufficient? To share your experience, call 312.923.9239.

Give the people what they want: A walkable city

Mon, 04 Jun 2012 08:24:00 -0500

A few weeks ago, Steve Edwards and the Afternoon Shift talked about urban walkability with WBEZ blogger Lee Bey and Melody Geraci, Deputy Director of the Active Transportation Alliance. “A walkable city has a few different elements,” Geraci said, “compact land use and mixed land use.” They talked about everything from creating development around transportation nodes, expansion of light rail, the health benefits of pedestrianism. “We need to use that awful d-word density of people and of place and they need to be mixed up,” she said.

The question is, what is so attractive about these mixed-up neighborhoods, and is it a trend that will last? It was less than two decades ago that having a car and a garage in the suburbs to park it in was the hallmark of affluence. We’ve all seen the episodes of Mad Men in which Don Draper cruises to the park with his family in a new convertible, the epitome of the modern man.

The dream, however, might be changing. Walkability in a neighborhood has long been a desire of those who consider themselves urbanists (though the majority of people are still living in suburbs). A new study out of the Brookings Institute, however, explores whether the re-urbanization of city centers and broader cultural shift towards diverse-use, walkable neighborhoods might be permanent.

Christopher Leinberger, co-author of the new report along with Urban Imprint president Mariela Alfonzo, is a firm believer that the field of urbanism lacks the quantifiable, underlying principles that other sciences have. With his study of metropolitan Washington, DC, he hoped to find a way to prove that an important change was taking place in neighborhoods that city dwellers “basically threw away” twenty years ago. When they abandoned those neighborhoods, Leinberger said, boomers move to the outer suburbs, but now they want that walkable lifestyle back, and what’s important is that they’re willing to pay for it.

It starts with a cultural anchor, like a church with a big congregation. Then, through urban entertainment venues like restaurants, theaters and bars, the neighborhood will begin to draw visitors from throughout the region. As people begin to populate the street, those visitors will increasingly consider moving to a more dynamic place, somewhere they don’t have to drive to the grocery store, or where they can meet their neighbors on the sidewalk. The infrastructure and public policy that is needed to abutt and sustain this kind of neighborhood is sure to follow.

Chicago magazine’s Dennis Rodkin, who will join Leinberger in a discussion about property values in walkable cities on Monday on Eight Forty-Eight, says one of the best ways to promote walkable cities is simply to walk. “You’ll be walking to the store for a gallon of milk and ask, Why is there no sidewalk here?” Rodkin points to South Loop industrial corridor development along Roosevelt Road as proof that the times are a-changing. He'll also highlight areas like Libertyville, Oak Park and Lakeview whose density provided them some respite from plummeting housing prices during the recession.

When he began writing about real estate in the late 1980s, Rodkin said, nobody would have dreamed of putting a Target or a Whole Foods or new condos along what used to be the crossroads of the American railroad. Now, he says, young urbanites are shopping at box stores where their grandparents once bought uniforms, fabric and shoes from small, specialty goods stores.

One man who experienced first hand how best to make these shifts a reality is former Mayor of Milwaukee John Norquist. Norquist brings his experience as a municipal leader to his position as President of the Congress for the New Urbanism. He'll explain how the CNU approaches the Federal Housing Administration in terms of creating the traditional, mixed-use development that the market is increasingly demanding. On Monday, he joins Brookings’ Leinberger and Rodkin in their attempt to figure out how to encourage the growth of valuable, walkable properties.

A correction has been made to this story.

Correction: An earlier version of this story misstated that Christopher Leinberger was the sole author of the report "Walk this Way:The Economic Promise of Walkable Places in Metropolitan Washington, D.C." The report was co-authored by Leinberger and Mariela Alfonzo.

Weighing the pros and cons of real estate short sales

Tue, 22 May 2012 07:00:00 -0500

In January, short sales outpaced foreclosures for the first time. To explain why, let’s pretend you’re one of the 11 million homeowners with underwater mortgages. If you can't afford to make your monthly payments or if you are no longer able to cross your fingers and hope your property value increases, you have two main options: Go into foreclosure or ask your lender to agree to a short sale.

The first option hits your credit score hard, making it difficult to obtain loans in the future. The second allows homeowners to sell their property at a price below what they owe the lender and recoup some of their losses.

Banks like short sales because they don’t have to spend money to maintain the property, which will usually sell for more than a foreclosure.

In many markets, including Chicago, short sales are becoming the norm. Local @properties agent Mabel Guzman says short sales account for 20 percent of her business. “It's what's in the market," she said, "although some [agents] would rather not deal with them."

For all parties, the main downside is that short sales are a pain in the butt. WBEZ’s Susie An and Ashley Gross chronicled An's own mixed experiences with short sales last year. An and husband got their house, but many other potential buyers end their search with the deal falling through, after months of headaches.

Real estate agents often use attorneys to expedite the process. Guzman, a former head of the Chicago Association of Realtors, uses a third-party negotiator to assist clients interested in a short sale.

Dennis Rodkin, who writes the Chicago magazine Deal Estate column and blog, says many are turned off by the cumbersome process. “For potential buyers on a lease, short sales can be too risky,” he said. “People can end up temporarily homeless.”

Starting in June, federal regulators will begin to remove some of the hurdles by requiring lenders to respond to seller requests in 30 days and have an answer within 60 days.

Rodkin and Guzman join Eight Forty-Eight on Tuesday to discuss the changes and whether short sales are worth the pain. If you have an experience with a short sale, call in live at 312.923.9239, to share your story.

In housing slump, more opting to rent

Mon, 14 May 2012 08:00:00 -0500

For the first time in the U.S. since the 1980s, it’s cheaper to buy a home than it is to rent. You’d think that would be cause enough for bargain hunters to buy up cheap, undervalued properties, but according to Aaron Galvin, the owner of Luxury Living Chicago, many would-be homeowners have hesitated. “People still don’t think they’ve seen the bottom,” he said.

Local numbers certainly bear that out. More than half of homes sold in the Chicago area are sold at a loss. With prices so low, ownership is no longer the cash cow it was in the boom years. In an anemic economic recovery, many Americans don’t know where they’ll be in five years, let alone the ten or more it would take to sell a home at a profit. Banks, burned from the foreclosure mess, are reluctant to loan.

Given the risks of home ownership, renting is no longer just the province of young people and the poor. Galvin, who focuses on upper income neighborhoods like Chicago’s Streeterville and the Gold Coast, says it's not uncommon for him to get 30 to 40 phone calls a day from people asking for advice on whether to rent or buy.

With more and more Americans delaying or eschewing home ownership altogether, Dennis Rodkin, the Deal Estate columnist for Chicago magazine, sees another worrisome trend: rising rents. “There’s a dearth of affordable rentals,” he said. Scarcity will likely intensify, as developers cater to the growing luxury rental market.

On Monday's Eight Forty-Eight, Galvin and Rodkin break down the pluses and minuses of renting and buying in today’s market. To share your story live, call 312.923.9239.

Deal Estate columnist answers your housing-related questions

Thu, 26 Apr 2012 14:30:00 -0500

With home prices in the Chicago area down 6.9 percent from a year ago, we know a lot of folks have real estate-related questions. Dennis Rodkin, who writes the Deal Estate column and blog for Chicago magazine, has answers, or at least he can try. If you have questions about economic trends, housing policy, selling your home or more, call Eight Forty-Eight's 24-hour hotline at 855.848.5551. He'll get to as many of your questions as he can on Monday's show.

Good news in housing: Chicago-area home prices on the rise, IMF calls for mortgage relief

Mon, 23 Apr 2012 14:07:00 -0500

In March, Illinois home prices increased for the first time since June 2010, ending a long streak of price decline. Average sale prices--around $130,000 according to the Illinois Realator's Association--match rates from March 2011 and other important indicators, such as decreased time on the market, also suggest that the housing market may be stabilizing.

The Chicago area has been identified as a good market for investors looking to buy foreclosed and distressed properties and develop them for resale, a classification that has contributed to the turnaround of the overall market. Analysts believe that the start of the spring selling season will mean improvements for sale rates across the board, although whether or not properties within Chicago are faring as well as surrouding areas is unclear. Barring major changes, such as an influx in the sale of foreclosed properties, there is confidence that sale prices will remain on the rise, a situation that should benefit home buyers and sellers alike.

For those who have questions about March sale prices in Illinois, Chicago magazine's Deal Estate columnist Dennis Rodkin will stop by Eight Forty-Eight and take phone calls from listeners - call 312.923.9239. Rodkin will also chat about International Monetary Fund chief Christine Lagarde's recent call for mortgage debt relief in the United States.

At a Brookings Institute event last week, Lagarde announced that the U.S. housing issue is delaying international economic development, and suggested that relief from the foreclosure squeeze on American households could lead to faster market growth worldwide. The IMF has been calling for mortgage relief in the US since April 2011, and Lagarde says her support of principal reduction is long-standing. The renewed pressure by the IMF is welcomed by Congressional Democrats, who have been attempting to pressure Federal Housing Finance Agency head Edward DeMarco to seriously consider debt restructuring, to no avail.

Custom Frank Lloyd Wright house up for auction

Wed, 07 Dec 2011 14:25:00 -0600

Frank Lloyd Wright certainly left his mark on architecture. He also had something of a reputation for being inflexible on matters of design. But there’s at least one house where he let the client define the process. The Laurent house is one of Wright’s Usonian houses – a simpler structure built for middle class families. But it was also the first residence Wright designed for an owner confined to a wheelchair.

It was commissioned over 60 years ago by returning World War II veteran Kenneth Laurent and his wife Phyllis; they live there still today. When Dennis Rodkin of Chicago magazine heard the house was on the auction block he insisted Eight Forty-Eight talk with Mr. Laurent; both men joined Eight Forty-Eight Wednesday.

Music Button: Charlie Chaplin, "Park Avenue Waltz", from the album Oh! That Cello, (Zebra Acoustic)