Homeownership continues to trend upward

The homeownership rate in the U.S. is trending upward, retaining the same 64.2 percent rate in the first quarter of 2018 as the last quarter of 2017, according to the Census Bureau’s Housing Vacancy Survey (HVS).

The current rate is recovering after reaching a cycle low of 62.9 percent during the second quarter of 2016. The homeownership rate reached a high in 2004 with a rate of 69.2 percent — compared to that high, the current rate is down 5 percent.

Year-over year, homeownership among all age demographics under 55 increased. The number of millennials who are homeowners increased from 34.3 percent to 35.3 percent but is still down from 36 percent in the last quarter of 2017.

The homeownership rate of ages 35-44 increased 0.8 percent annually, while those ages 45-54 saw an increase of 0.6 percent.

The non-seasonally-adjusted rate for homeowner vacancies was 1.5 percent, down 0.1 percent from the final quarter of 2017. The national vacancy rate for rentals remained at 7 percent.

HVS data says that homeowner households grew 1.1 million from last year to this year, up to 119.5 million for the first quarter of 2018. The number of homeowner households has been rising since the third quarter of 2015 — compared to the number of renter households — which has been declining since the second quarter of 2017.

How Chicago could win even if it loses landing Amazon

Victory would be the best outcome for Chicago in the competition for Amazon’s second headquarters. The second-best outcome would be a detailed roadmap for making Chicago more attractive to business.

Local political and civic leaders are sparing no effort or expense to win the most coveted economic development prize in recent memory. If we lose, they should be just as aggressive in pursuing detailed feedback from the online retailing giant.

The HQ2 quest is more than a once-in-a-generation opportunity to capture tens of thousands of well-paid jobs, burnish Chicago’s stature as a business center and vault the city into the top ranks of technology hubs. It’s also a rare chance to undergo rigorous vetting by an unbiased outsider and get a point-by-point comparison with other big cities across the country.

Based on Amazon’s wish list, Chicago appears to stack up well against competitors on factors the Seattle-based company is looking for. We have a deep talent pool, extensive public transportation, world-class air travel connections, comparatively affordable housing and the sheer size to absorb a massive influx of jobs and business activity without gagging. We also have glaring disadvantages, most notably fiscal and political instability, chronic crime fears and deep inequities in public education.

Which of these factors matter most to business? The Amazon derby is our chance to find out. Of course, every city vying for Amazon’s hand has weaknesses to go with its strengths. Still, Chicago has to be considered a long shot, if only because of the number of contenders.

At this point, there’s no telling what might tip the scales against Chicago. It could be one or more of our well-publicized problems. Or it could be an as-yet unappreciated deficiency in an area important to Amazon. We also might lose because of some factor outside our control—such as physical proximity to federal policymakers in Washington, D.C.

Losing would be a disappointment. Losing without learning why would be a mistake. If Chicago gets no more than a “thanks for your interest,” the time and money spent to woo Amazon will have been largely wasted.

Post-mortems of losing campaigns are no fun, but they can be immensely valuable. A thorough analysis based on feedback from Amazon would provide rare perspective on Chicago’s economic attributes. We would find out how appealing our prized assets really are. And we would discover just how badly our soft spots hurt us. City leaders could translate those insights into a blueprint for improving Chicago’s business climate and attracting more jobs and outside investment.

It’s up to Mayor Rahm Emanuel to demand such an accounting from Amazon. City spokesman Grant Klinzman declines to comment on the mayor’s thinking in this regard.

Amazon didn’t respond when I asked if the company plans to offer detailed feedback to losing cities. But it’s the least they can do. After staging a prolonged and expensive hoop-jumping exercise, Amazon should make sure participants get some value out of the process. That’s especially true for our area, which has been pretty generous to Amazon. The Seattle-based company has collected more than $100 million in tax subsidies in recent years for facilities in metropolitan Chicago.

The Wall Street Journal reported May 2 that Amazon has been inconsistent in its willingness to debrief cities eliminated in the first round of vetting. Detroit officials were granted a conference call with an Amazon executive involved in the second headquarters search. Sacramento got a polite brush-off.

Amazon owes cities a level of feedback commensurate with the effort they put into the headquarters contest. I don’t think it’s asking too much to expect a written assessment outlining where each losing city fell short. Amazon probably has prepared such documents for internal purposes. Chicago should settle for nothing less.

Fed leaves interest rates under 1.75 percent following May meeting

The Federal Reserve offered no surprises this month.

The country’s central bank held target interest rates steady at between 1.5 and 1.75 percent but said nothing to indicate it won’t follow through next month with an expected second hike in 2018, according to the Wall Street Journal.

The Fed made its announcement Wednesday, following a two-day meeting of its Federal Open Market Committee.

In late March, the Fed raised interest rates by a quarter percent for the first time this year during Jerome Powell’s first meeting as Chairman.

The Fed noted that consumer prices rose 2 percent in March year-over-year. Excluding food and energy, prices rose by 1.9 percent in March, higher than the 1.6 percent seen in February, according to the Journal.

The Open Market Committee expects “economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong,” with “further gradual adjustments” in monetary policy.

The Committee also announced it expected inflation on a 12-month basis to “run near the Committee’s symmetric 2 percent objective over the medium term.”

Raising the benchmark federal funds rate prompts lenders to raise their rates as well, including mortgage rates, making home-buying more expensive for the consumer. Incremental mortgage rate increases can add — and already has added — hundreds of dollars to mortgages, particularly in the high-end market. It also makes borrowing more expensive for developers.

Vacant Ravenswood building readies for apartment and retail adaptive reuse

A new development looking to bring dozens of new apartments to an old Lawrence Avenue industrial building is ready to break ground in Chicago’s Ravenswood neighborhood.

The project recently landed a $5 million permit to construct a sizable two-story addition to the vacant Surpless, Dunn & Co. building at 2150 W. Lawrence Avenue. When complete, the expansion will house 59 one- and two-bedroom rental units ranging from roughly 800 to 1,000 square feet in size plus ground floor retail space, a green roof, a rooftop deck, and parking 50 vehicles.

First introduced to Ravenswood neighbors in May of 2016, the plan comes from developer Sonco Real Estate and Chicago-based MWorks Architects. According to documents posted to the website of 47th Ward Alderman Ameya Pawar, the team estimates a 12-month timeline from permit date to delivery.

The project joins a number of new developments sprouting up along Lawrence Avenue. These include a 39-unit building at the corner of Ashland and Lawrence, 166-apartment complex headed to 1825 W. Lawrence, and a pair of smaller multi-family developments slated for the east-west thoroughfare’s 2200 block.

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