It costs a lot of money to buy an apartment building. Most landlords need to borrow money from a bank to buy them. But banks have a scoring system that they use to figure out how much money they'll allow landlords to borrow. Running an apartment building is a lot like running any other business. Banks know that businesses are likely to fail. When a landlord fails, the bank gets ownership of the building. Banks will only lend money to high scoring buildings so that they know that they'll be able to find a new owner quickly.
The way the banks score buildings includes the age of the building, the style of management and the surrounding neighborhood. This is one of the major reasons why you only see a few types of buildings in each neighborhood. Downtown will only have new high rises. The edges of town will only have old creaky walkup buildings. It also affects who is likely to buy each type of building.
Today we'll take a look at the four main scores a building can have, and who is most likely to own them.
Class A buildings are brand new, usually less than 20 years old. They have a lot of units, and lots of community features like gyms, pools and party rooms. They have professional property management on site at all times. They're located in very popular neighborhoods. They're probably high rises with many eco-friendly features. They usually have a fancy name, like Aqua or K2. Continue reading What Class is your Apartment Building? (and what does it say about your landlord?)
A friend of mine has a condo that he rents out on the south side of Chicago. Recently he contacted me with a question. The condo association had decided that it wanted to ban rentals to section 8 tenants. He wanted to know if this was legal.
The short answer? No. Section 8 voucher holders are a protected class in the City of Chicago. Condo associations must follow fair housing laws just like landlords, real estate agents and everyone else involved with residential real estate transactions.
But the question requires some unpacking of the ongoing war between landlords and government subsidized renters since the start of the Section 8 program.
What is the Section 8 program?
Section 8 Housing in Chicago is made up of multiple programs, including public housing projects and home purchase assistance for the poor. The part we're talking about is called the Housing Choice Voucher program, and it allows low-income renters to rent from normal apartments in the community with help from the government. It is called “Section 8” after the portion of federal law that created government-subsidized housing in 1937. Continue reading Stereotypes, Status Symbols, and the Failure of the Section 8 Voucher Program
Renters have a bad reputation that causes local homeowners to push back against building new apartments in their neighborhoods. They're accused of being transient residents who take from a community's resources without giving anything back. They're only in the area for a short while and don't feel it's necessary to get involved in local events. They may not have money to donate to local causes.
This sort of attitude is detrimental to all renters. When owners see renters as unwelcome second class citizens it makes it harder for all renters to find housing. It fosters segregation and discrimination. Renters need to make an effort to get involved in the neighborhood activities around them.
Most renters are in town for a least a year and have some spare time on their hands. Here are some inexpensive, short-term ways that renters can fight back against the bad reputation that follows them around.
1. Attend CAPS meetings
The Chicago police have a system called CAPS (Chicago Alternative Policing Strategy) which allows civilians to assist with the policing of their neighborhood. Each beat has an open meeting with police officers from their local department present on a regular basis. Continue reading 10 Ways That Chicago Renters Can Get Involved in the Community
The City of Chicago has many laws that landlords (and any owner of residential property) must follow when it comes to maintaining their buildings. Most tenants know that they need to report problems with their building to their landlord in writing. But many do not know what to do if the landlord doesn't respond. If the problem isn't fixed, tenants can report the problem to the city.
What happens when you report a problem?
The city will dispatch a building inspector to come take a look. Depending on the nature of the problem you may have to wait a few days or weeks for your appointment.
If the inspector finds a problem that breaks the city's laws, they will not send out the police to arrest your landlord. The landlord will be fined – like a parking ticket – and may have to attend a court hearing to prove that the problem has been fixed. Continue reading How to Rat Out a Bad Landlord to the City of Chicago