U.S. Census Troubles Threaten Future Real Estate Development

Budget uncertainty has always been a fact of life with the census, but watchdogs believe if additional funding is not allocated, it could have a disastrous impact on the count in three years, which will trickle down to negatively impact a myriad of industries dependent on census data — including commercial real estate.

To call the first six months under President Donald Trump and the new administration a roller coaster ride would be an understatement. Several federal departments, from the State Department to the General Services Administration, are dealing with reduced staffing and proposed budget cuts in Trump’s Fiscal Year 2018 budget.

The U.S. Census Bureau is one of the departments in disarray. The agency’s chief, John H. Thompson, announced in May that he was stepping down effective June 30, and critics worry the slight increase in funding proposed in Trump’s budget plan will not sufficiently cover the bureau’s needs ahead of the 2020 census.

“I’m horrified for the industry,” said Merit Partners Managing Broker David Liebman, whose firm uses census data to research neighborhood demographics ahead of development.  U.S. Census Data Informs CRE Developments Clark Street Real Estate A rendering of Retail at the Fields, a 50K SF retail development in the Belmont Cragin neighborhood in northwest Chicago that is right across the street from Liebman’s offices.

The center, which will be anchored by Ross Dress for Less and Petco, will bring much-needed retail to residents within four adjacent neighborhoods in the northwest side of Chicago, where retail is strongly lacking. Developers became hip to this market’s need for retail in part from researching demographic data from the 2010 census. JLL Research Director Christian Beaudoin said census data is the foundation of his firm’s research strategy.

JLL uses census data on a daily basis in many different situations, including but not limited to: location strategy, determining sales/revenue projections for clients’ assets, targeting specific markets and helping local governments in pinpointing areas of economic development.

A bad census count would require JLL to rely more on internal research and other public data like state and local income breakdowns, job growth and education levels to make its decisions.

“It’s incredibly significant,” Beaudoin said.

The longer the Census Bureau deals with leadership uncertainty, the greater the possibility of a miscount in 2020 that may have a ripple effect on everything from mapping congressional and state legislative districts — where local governments determine where to invest in infrastructure projects and upgrades — to determining where real estate developers build homes, commercial buildings and businesses.

Census demographic data played a foundational role in the transformation of Fulton Market from a mostly industrial meatpacking district into one of Chicago’s busiest submarkets for real estate activity. Thanks to census data, developers were able to utilize New Market Tax Credits to subsidize the construction costs of their developments in the market. The New York Center for Economic Transformation used census data for a 2014 report on trends in Astoria, Queens, that real estate developers are using to plan developments there.

Some real estate pros believe a miscount in the 2020 census would have minimal effect on real estate. Murphy Development Co. President John Murphy said census data is a macro consideration, but not a determining factor in his development decisions.

Murphy focuses on trending and migration to specific urban areas where the population is underserved by a specific product type such as multifamily housing or retail opportunities. Populations may decline, but a specific location or neighborhood can be experiencing robust development activity and a corresponding increase in that specific area’s population.

In a similar vein, CA Ventures principal JJ Smith said he is taking note of what unfolds with the 2020 census, but is unsure if it will drive decisions.

“We need good data integrity coming out of the census, but if we can catalog our own data, we can draw our own conclusions on factors like job growth projections and market trends,” Smith said.

Budget Woes: The Good, The Bad And The Ugly

Trump’s FY 2018 budget calls for $1.5B for the Census Bureau. That is slightly more than the $1.47B Congress approved in its FY 2017 package, but about $300M less than the Obama administration wanted allocated for the agency next year.

Couple that with how long the Trump administration takes to find a replacement for Thompson, and the seeds have been sown for what may be a growing crisis.

“I’m hoping for the best, but expecting the worst,” Liebman said.

Another old church getting the apartment treatment

Yet another old church on the city’s north side may soon become new residences. According to DNAinfo, developer SNS Realty Group has a contract to purchase St. Paul’s cathedral at 2215 W. North Avenue in Wicker Park and is seeking a zoning change to build out 24 new rental units in the existing structure. According to DNAinfo, the property’s existing zoning would allow a maximum of eight residences.

The developer, which has recently worked on projects in Logan Square and Uptown, has been meeting with community groups to provide detailed information about the plan and to solicit feedback. However, DNAinfo reports that members of the community group Wicker Park Committee have suggested that the plan calls for too many units.

Like many prominent churches in the surrounding communities, St. Paul’s has an important legacy and appears on the Chicago Historic Resources Survey for being architecturally significant. Designed by the architect G. Isaacson in 1890, the study church features a muscular Romanesque appearance and steeples that stagger in height. According to archived construction news clippings, the estimated cost to build the church was $30,000 in 1890.

If the plan for rental units moves forward, St. Paul’s will join the nearby St. Boniface and many otherformer places of worship to find new life as residences.

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How to request new trees for your block’s parkway

It’s peak summertime and the city has fully bloomed for the year. Lawns are blanketed with lush green grass and the trees lining the city’s parkways are thick and leafy. However, the hustle and bustle of the city and the area’s extreme weather takes a toll on the trees in the public way. You name it and it’s likely happened—parkway trees take their fair share of abuse in Chicago. Once the tree that was hit by a car or ravaged by the emerald ash borer has been removed, often times all that’s left is an unsightly stump.

While Chicago property owners are tasked with maintaining the parkway in front of their homes, the city will plant new trees along public way free of charge. The arrangement works out well for everyone—trees help abate flooding, provide shade and clean air, meanwhile property owners get a boost in curb appeal. Plus, the trees are happy being outside getting plenty of sunlight and carbon monoxide.

Just like anything in Chicago, there’s a process to request a new tree for your parkway. There’s an online form where property owners can enter their address and other necessary information. Like many other online services, the city’s 311 page is a little clunky. The connection is not secure and doesn’t work well with some browsers—Google Chrome won’t even load the page. But there’s also the old fashioned phone line there for you also. You can request a new tree and provide your address by calling 311.

But that’s not all! The city has also published a comprehensive list of trees that fare well in Chicago’s climate. Not all trees that thrive on private property do well in the public way, but a lot of them do. The list features nearly 200 species and lists their availability and hardiness in a midwestern urban environment.

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