The recent surge in homicides and shootings in parts of Chicago’s South and West sides has not dampened investor interest in the city’s real estate, according to an analysis provided to a Community Investment Corp. forum Monday night.
Rather, apartment buildings in neighborhoods on the city’s South and West sides, where real estate values substantially lag the levels they were at before the housing crash that started in 2006, remain in demand as investors are drawn to Chicago, said Jim Kutill, vice president of neighborhood properties for Appraisal Research Counselors. Real estate values downtown seem to be impervious to crime concerns, Kutill told those attending the forum presented by CIC, which lends to apartment complex developers.
Kutill said investors seem to view downtown as far removed from the neighborhoods where crime has surged.
He also noted that property values in areas such as Englewood, Woodlawn, Austin and Greater Grand Crossing continue to be held back by high rates of unemployment.
According to Kutill, one reason investors generally are drawn to low-income neighborhoods is that about a third of the apartment residents in those areas are using vouchers funded by the U.S. Department of Housing and Urban Development to pay a portion of their rent. For investors, those vouchers guarantee a stable base of paying tenants. The biggest threat to investors, he said, would be if the federal government were to cut those vouchers.
“We’re depending more and more on voucher income,” he said, noting the inability of lower-income people to afford rising rents.
gmarksjarvis@chicagotribune.com
