Is Chicago bad for Investors?
If you have listened to the media and the news recently, or seen old movies about the mafia in Chicago, you may be excused for thinking Chicago is a no go zone for investors. If you have not been to Chicago recently you may also think of Chicago as being still in a recession after the 2008.
Here are some myths about Chicago that you may have heard.
1. Chicago is a Violent City
Chicago is in the headlines for the violence and killings, every week there are headlines about how many killings happen there. Chicago has its problems with violence and killings, but, the news headlines fail to give the other side of the story. In 2016 there was a 58% increase on the previous year in the murder rate with 762 murders but there is no reason to “send in the Feds”, as Chicago is addressing its own problems. In fact while the murder rate has been higher than most cities, there is also good news that the murder rate is on the decline in recent months with more police and better training. From January – July of 2017 the murder rate fell over 33% on the previous year. Most of the violence is also confined to only 5 of the 77 districts of the city
2. Chicago Economic growth is stunted
Like all cities Chicago’s’ economy was hit hard by the financial recession of 2008, it was also slower to recover than other cities due to many factors. In 2008 the development of many Major projects and building in Downtown stopped abruptly. Fortunately Chicago’s’ economy is improving with many new initiatives in the Downtown area to help promote business and improve amenities for tourists and locals. According to the Crane Index, Chicago currently leads the nation with more cranes in use for residential projects than 11 other major U.S. cities. With 56 construction cranes at work, 31 for residential buildings, Chicago’s pace is exploding: the city has three times more cranes in action now than at the same time last year.
During 2016, Chicago announced 424 projects that had a minimum capital investment of $1 million, created 20 new jobs or added at least 20,000 new square feet of space. That’s nearly twice as many as the second-place ﬁnisher, Dallas-Fort Worth. EquityBuild is proud of the part our investments played in helping Chicago reach this important distinction.
Chicago property values still being suppressed from the ﬁnancial crash of 2007-2008. Chicago prices have been slower to recover than other regions. This is just another reason why investment in Chicago makes sense
3. Chicago corruption is rampant
Chicago has had its problems with corruption and bad politics. Between 1976, when the U.S. Department of Justice began compiling the statistics, and 2012, 1,913 public corruption convictions — more than any other city in the U.S. That’s 52 a year, an average of one per week. Four Illinois governors have gone to prison for corruption — two at the same time: Democrat Rod Blagojevich and Republican George Ryan. On top of that are state legislators, inspectors and judges who have run afoul of the law. Since 2012 corruption has been minimal as many politicians and government officials are now becoming aware of the implications and jail time for bad deals and corrupt politics.
Chicago is the “Second City”, it is a diverse, expansive and vibrant city with more positives than negatives when it comes to investing in the Chicago area.
4. Chicago is not good for business
Chicago currently has 32 of the Forbes 500 hold headquarters in Chicago’s Metro in diversified industries from finance to manufacturing . Chicago metro’s economy is one of the largest in the nation and is anticipated to grow 3%. Chicago’s centralized locations, educated workforce and relatively affordable cost of living compared with coasts attract many businesses. Chicago’s transportation and technology infrastructure rank among the largest and most efficient in the world. Contrary to some beliefs, Chicago is a growing and desirable city for investors.
5. Chicago is going to become like Detroit
The city’s total 2017 budget is $9.8 billion, of which only about a third — $3.7 billion — is for current operations. Right now, Chicago is more than $34 billion in debt — two-thirds of that being tied to its employee pension plans. Chicago boasts more than 4.7 million jobs, and its 4.2% unemployment rate as of April 2017 was 1.7 percentage points below April 2016 — the largest drop in the country. Employment is projected to increase at an annual rate of 1.3% through 2020.
EquityBuild knows Chicago intimately. We have done business there for years, and we know the city inside out ― neighborhood by neighborhood, block by block. We are there daily, so we see the micro changes and the opportunities others miss. Our inspection teams are knowledgeable and experienced, with a deep understanding of the strengths and challenges of the buildings we target.
We have been successfully investing in real estate for decades, and we put our experience into play on behalf of our investors every single day so they can achieve their dreams of lasting wealth and financial security.
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