What If a Property Is Listed for 70% Off and No One Cares? 6030 N. Sheridan in Edgewater

We last chattered about this 1951 high rise at 6030 N. Sheridan in Edgewater in October 2009.

See our prior chatter here.

At the time, a bunch of units were in distress in the building.

It doesn’t look like much has changed in 2011.

This 1-bedroom is currently bank owned and is listed for about 70% under the 2004 purchase price.

It has been on the market for about a month and was just reduced another $6,000.

The unit has maple cabinets and black appliances in the kitchen.

It has west views and wall unit air conditioning.

Laura said in the chatter about this building in 2009:

“I believe we will be heading back to the conservatism of the past no matter what people want, out of necessity, but not until another wave of defaults happens and there’s no money left for any more bailouts or housing incentives.

Life will be different, and housing will once more be cheap.”

How low will these units go in these Edgewater high rises before they find buyers?

Ron Ehlers at Prairie Shore Properties has the listing. See the pictures here.

Unit #1609: 1 bedroom, 1 bath, no square footage listed

  • Building converted to condos around 2002-2003
  • Sold in June 2004 for $146,500
  • Lis pendens foreclosure filed in November 2009
  • Bank owned in November 2010
  • Originally listed in December 2010 for $53,000
  • Reduced
  • Currently listed for $45,999
  • Assessments of $574 a month (includes heat, doorman, cable)
  • Taxes of $669
  • No central air- window units
  • No washer/dryer in the unit
  • No parking? (I can’t tell- but doesn’t look like it)
  • Bedroom: 15×11
  • Living room: 17×16
  • Kitchen: 10×6

196 Responses to “What If a Property Is Listed for 70% Off and No One Cares? 6030 N. Sheridan in Edgewater”

  1. edgewaterdenizen on January 12th, 2011 at 6:31 am

    I live at 6007 (the Malibu) and, although all prices are dropping, prices of less desirable units (north and west views) are dropping big time. It does seem like the tide of price drops is being somewhat stemmed by allowance for rentals in the building though- and dozens of them have just come “on the market”. If the condo board decides (as it has threatened to) to restrict rentals in the building, and units have to start hitting the market, prices will really start dropping, I think. It’s an interesting tension to watch unfold. (Disclaimer: I rent, though with an option to purchase in a couple of years.)

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  2. No matter what anyone says, PEOPLE WILL ALWAYS WANT TO OWN. I don’t know why – but people tie their self-worth to their possessions. I see it everyday (and am guilty of it myself). If you give someone a choice of a 875 rental and a 875 owned property – my guess would be that nearly 100% of people would take the property that they could buy for 875/month.

    If I am wrong, then many investors out there are going to snatch these properties up and rent them out themselves. Seriously, if you rent this place out for 875, you would be getting 6% return on your money – nothing right now comes close (consistently).

    edgewater, what would be the rent on a place like this?

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  3. edgewaterdenizen on January 12th, 2011 at 6:59 am

    First, you can’t compare the buildings on the lake side with the ones on the street side in terms of value. Second, buildings on the lake side are also all over the map in terms of quality, so also vary drastically in value. Third, although we’re watching the market closely, we’d rather walk away than overpay for our unit. Then, there’s the assessments and taxes, and the unpredictability there… We’re hoping that, in the next two years the dust will settle in the market more generally, and that the owners of the unit will wake up to the new reality and not try and get a 2005 price. I’d rather rent any day than be locked into a bad deal.

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  4. Edgewaterden

    Thanks for your local insight on the situation.
    What do you think about this particular building?

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  5. Edgewater – Tell us more about your demographics. How old, married, single, kids on the short or long term horizon, long term (10+ years) plans for housing. Just curious after your earlier comments.

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  6. Clio, what you are really saying is that many of these recent condo conversions, especially of undesirable buildings like 6030 N Sheridan, will be reverting to rental. There is no demand for “ownership” of ugly, ordinary rental-grade apartments and that’s why prices in this building have dropped to where they make sense for an investor.

    People want to own, yes. But they really want to OWN, not be perpetual debt slaves in properties that make no kind of economic sense and are no improvement on a rental property, but cost twice as much because they are nominal “owners”. What, really, do you “own”, when you are paying twice as much just to service mortgage debt in a rental grade apt that would rent for half your monthly payments and are also subject to all the liabilities of ownership including steep property tax hikes with no ceiling- in effect you are a perpetual rent payer to your local taxing authority.

    The reason Chicago’s condo market is collapsing is that so many older rental buildings were hastily converted and offered as condos during the Rampage by owners who saw the opportunity to get out from under these places and sell them for a substantial premium in no way related to their value as rental properties. In a rational market where you don’t have policy driving debt creation and asset creation, that is a non-bubble market. these places would never have been marketable as condos to begin with. Most of these buildings will be selling at “investor” prices and will revert to rental in the next few years.

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  7. Find and Finance Foreclosures – Learn from the Experts to Buy & Invest

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  8. edgewaterdenizen on January 12th, 2011 at 7:45 am

    Laura knows the market in ERP better than I. We’re DINKs. Love our unit, but, as I said, are watching the market (other units, other buildings in Edgewater) very closely. I know a prof who got tenure, looked into purchasing in her Edgewater high rise but ran the numbers and opted to keep renting.

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  9. Well put Laura. What will likely happen to a building like this is it will slowly revert to all rental, or large blocks will be bought up as rentals much like Marina City did when it went condo in the late 70’s. When that happens you usually get slum lords who do not have the associations best interest and the building deteriorates. This in turn attracts low income tenants who also won’t care for the building. In the case of Marina City it took 20 years for it to start turning around.

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  10. Also an opportunity for someone who likes tha area/building (aka marina city) to buy multiple connected units and make an interesting unique space. Many did that in MC and have enjoyed living there. This area is not not in my plans but other buildings will lend themselves to a few very unique multiple combo units.

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  11. so crib chatters what is scarier (RE scary, not clio western scary), the south loop or edgewater/far northside?

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  12. Let’s face the cold hard truth when it comes to Chicago’s condo market. During the boom years, way too many condos were built. The reason why is because a single family home became a speculative investment vehicle and then soon condos and residential real estate followed the same path. Houses were very unaffordable and thus the alternative was to own a condo, see it appreciate and then take that money and buy a single family house.

    I grew up in Ravenswood and saw so many apartment buildings and houses demolished to build condos. Chicago has a glut of condos and now the prices of a house (usually foreclosed or even a short sale) is rapidly depreciating to the point where prospective buyers of a condo would think twice.

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  13. edgewaterdenizen on January 12th, 2011 at 8:09 am

    One could also argue (as many have done on this site) this bubble deflation could resurrect affordable options for average working class/middle class people. Edgewater has great bones, diversity, and a strong middle class heritage. Maybe this is the beginning of a northside renaissance…

    Groove77 on January 12th, 2011 at 8:00 am

    so crib chatters what is scarier (RE scary, not clio western scary), the south loop or edgewater/far northside?

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  14. gescob3 – this would be a nice addition to your portfolio. low cost = low risk.

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  15. “In the case of Marina City it took 20 years for it to start turning around.”

    And a huge real estate bubble. No turnaround for many of these without one.

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  16. I helped a couple of clients buy units here during the early conversion period. Most were “raw” post-rental spaces and my young buyers really got a kick out of being able to design their own new homes. The developer had a wide array of cabinet styles, carpet colors, etc. So unless you bought an already-completed “model” you really felt like you were buying your “very own” custom creation.

    That’s a pretty heady feeling for a Loyola student (with parents), or recent grad from out-of-town and a promising new job downtown. And the easy mortgage terms were the icing on the cake…

    The clients I have now, who are interested in buying here, are speculators/investors looking for cheap units to buy, fix up, and rent to Loyola kids or young workers.

    What a difference a decade makes…

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  17. gringozecarioca on January 12th, 2011 at 8:33 am

    scarier- south loop

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  18. I vote for these high rises along the lake on the far north side. They are down 70% or more. And the buildings are old. They need massive maintenance. Who’s going to be there to pay for it all?

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  19. Edgewater/RP

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  20. The assessments are really high here. Although the taxes are very low. In any case an investor would be paying almost $650 a month before any financing costs. What could you rent this out for? It is ugly and small- maybe $800?

    So even with the low price tag, this one does not make sense.

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  21. “Who’s going to be there to pay for it all?”

    The vultures who will pick the carcasses of the “speculators/investors looking for cheap units” today.

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  22. If I drove by knowing that I was in edgewater and saw this building, I would have confused this with a cha project. How far of an el ride is this to downtown? Heck unless you have a lake view, I would rather live in clearing / Garfield ridge and at least be close to the airport to take the orange line downtown.

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  23. “And the buildings are old. They need massive maintenance. Who’s going to be there to pay for it all?”

    good vote Bri-Bri,
    as this spotlighted unit tells the tale. its only 50k to buy but the ass fee is $500 monthly! that same ass fee in the Sloop gets you a gym, indoor and outdoor pool

    i think if edgewater would add some potbelly’s and doggie day cares they may be able list at a premium.

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  24. I feel like we have been hearing about the renaissance of RP/edgewater for decades. Bueller? Bueller?

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  25. this looks like an old administration building in a soviet bloc country.

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  26. Not everyone can live in a multimillion dollar home in the gold coast. There is definitely a need for affordable housing and this fits the bill. Sorry, but everyone here sounds like a bunch of spoiled brats. Oh, and about renting – are you guys that ignorant that you think rents are going to stay the same for the next ten years? Come on – every landlord/business is out to make money. If upkeep and assessments and taxes keep going up, who do you think is going to pick up the tab – of course it is going to be renters. It is logical and coming to a rental near you!~!!!!

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  27. I really like Edgewater and own property there. I rent out beautiful one bedroomn apartments for $1100.

    Near the lake. Walk to Metropolis and M Henrietta, Near Andersonville, Nice housing stock, tree lined streets, etc.

    This building and apartment seem like a P.O.S.

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  28. Edgewater/RP scarier

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  29. “Come on – every landlord/business is out to make money. If upkeep and assessments and taxes keep going up, who do you think is going to pick up the tab – of course it is going to be renters. It is logical and coming to a rental near you!”

    Anon (ufo) brought up a outstanding point yesterday Clio, its not the LL who prices the rent its the rental market that prices it.

    so you as a LL will want to raise your rents to cover crook counties inevitable large prop tax increase and higher maint costs but if Joe LL and Jane LL are still pricing at $xxx you will need to take a hit to get a tenant.

    great thing about big cities, OPTIONS and there are many

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  30. This is a 50 minute door to door commute during rush hour assuming a short walk to the Thorndale el stop – from which I remember – was pretty sketchy. But then again, I haven’t lived in that area in 11 years.

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  31. Right Groove, there will always be someone with lower expenses that can cut prices to get tenants. That’s how I found our latest place. We just found a great place in Lincoln Square to rent and aren’t putting our lives on hold one bit. We are even going to paint and decorate!

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  32. Clio, rents have been going down for 2 years across Chicago, except for certain buildings (mainly the high rises, which I have no interest in renting in anyways). Renting has allowed many people lots of flexibility in an uncertain job market, and also they have been able to save extra cash along the way. Owning is a long-term thing that requires planning and in the long run could cost a lot more in a high rise condo building that one would realize.

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  33. gringozecarioca on January 12th, 2011 at 9:18 am

    “Governor Quinn today thanks the Illinois General Assembly for taking strong action to confront our fiscal crisis and provide the revenue and reforms needed to stabilize the budget, pay our bills and jumpstart Illinois’ economy,”

    Priceless… taking from private sector and giving to public sector.. net net zero (at best).. how does this jumpstart things?

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  34. The tax increase is basically a transfer of wealth from the taxpayers to the pensioners. Why don’t we just get rid of all pensions altogether. What a horrible idea, especially when people can work 25-30 years and then retire to get benefits for 35 years. This could cause people and businesses on the margin to consider relocating to neighboring states, like Indiana.

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  35. Edgewater has had a noticeable renaissance, that I think is undeniable. there’s that mia francescas, and other nice places that have opened up over the last decade plus. Sadly, they even closed up sun liquors which is where I used to buy beer when I was a teenager.

    Expectations regarding how pricey it could get were obviously a tad high.

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  36. Clio, haha thanks for the recommendation I actually took a look at the condo and geez was it difficult to see. The lockbox outside the building was frozen solid i stood out for 15 minutes trying warm it with my hands periodically going back inside the building to warm up every 5 minutes.

    I’m not going to say its a bad value but there are definitely better out there. The rental value just isnt there. I’ve been focusing on 2 bedrooms which give you a net return of 10-13% more if you can successfully appeal the taxes. And then the likely appreciation cause you are buying it so cheap.

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  37. “Right Groove, there will always be someone with lower expenses that can cut prices to get tenants. That’s how I found our latest place. We just found a great place in Lincoln Square to rent and aren’t putting our lives on hold one bit. We are even going to paint and decorate!”

    roscoevillger it may be time for a name change, or a AKA addtion, at least a hyphened name 🙂

    but when i rented i mostly rented from old timers who owned the building outright which always helped in the wiggle room on price, and they like the i painted (neutral colors only though) as for them was a cost, time, and energy saved for them.

    but specuvestors and wannabe trumps are to overextend that one major repair or for highrise one special ass then they will have no choice to raise rent (and loose tenant) just to keep from bleeding in the red.

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  38. Clio, also thanks for your advise on the other entry. I’m actually hoping to transition to doing real estate full time. Would you ever be interested in grabbing a coffee sometime, I would be really grateful to hear your insight on what to do with the properties i currently own in terms of fixing them up/trying flipping them immediately/just holding on. To be quite honest I don’t trust realtors, I just get the feeling their incentives are never aligned with that of my own.

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  39. There it is Groove! The biggest downside to being a transient renter: outdated avatars. Post-move I will be known as Fmr-roscoevillager

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  40. “Come on – every landlord/business is out to make money. If upkeep and assessments and taxes keep going up, who do you think is going to pick up the tab – of course it is going to be renters. It is logical and coming to a rental near you!”

    Not when prices are falling and the new “investors” have a lower cost basis. And so on, and so on…

    Watch your toilet flush for a good visualization.

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  41. “The tax increase is basically a transfer of wealth from the taxpayers to the pensioners. Why don’t we just get rid of all pensions altogether.”

    Not to start another political discussion, but there is only one mayoral candidate proposing to cut pensions for *current* workers.

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  42. gringozecarioca on January 12th, 2011 at 10:03 am

    “Watch your toilet flush for a good visualization.”

    Perfect!

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  43. anon (tfo), missed it. could you identify the candidate.

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  44. “This is a 50 minute door to door commute during rush hour ”

    my spine hurts just thinking about spending 100 minutes a day on the redline

    ouch

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  45. Peter G. – here it is:

    http://washingtonexaminer.com/blogs/beltway-confidential/2011/01/rahm-tells-chicago-union-bosses-pensions-have-be-cut

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  46. Its Rahm

    See here:

    http://www.nytimes.com/2011/01/09/us/09cncpulse.html?_r=2&emc=eta1

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  47. gringozecarioca on January 12th, 2011 at 10:35 am

    Sonies.. with a 16 hour waking day you could think of it as wasting 27 days a year out of your life just commuting…

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  48. How do investors rationalize buying condos in buildings where the % of renters is already or will soon be too high for anyone to get FHA financing to buy units in the building? Are they just assuming the annual return is so great it doesn’t matter if they can’t sell the unit for decades? Are they assuming there will always be some other cash buyer out there who wants to take it off their hands and hold it as an investment? Or are investors thinking the % of renters in a building isn’t going to be as big of an issue to banks in a few years because all buildings will have lots of renters?

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  49. “so you as a LL will want to raise your rents to cover crook counties inevitable large prop tax increase and higher maint costs but if Joe LL and Jane LL are still pricing at $xxx you will need to take a hit to get a tenant”

    True but it is the 80/20 rule here. If property taxes spike (likely) then all properties are affected. Sure a few will absorb that cost but 80% or more will pass that along. Good for the few that negotiate hard or keep searching but most of the rents will rise equal to the spike. It is not like the next town over will not have a similar spike. This means that renters pushed out of Lakeview due to price increases will end up in Uptown etc.

    Price elasticity will always be there but the 80/20 rule will mean that the landlords will be able to pass along some of the added increases.

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  50. BTW Rahm can say anything in the election cycle. What will he do once he is there? If I am not mistaken Quinn did not campaign for a 66% tax increase did he?

    Most candidates are just great at lying and master manipulators who have one goal of trying to appease enough constituents to get into the office they seek. After that is accomplished they are off to do whatever agenda they had in mind when they decided to run.

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  51. “This means that renters pushed out of Lakeview due to price increases will end up in Uptown etc.”

    so your saying in a sense is are “voted in” representatives will be the ones responsible for wilson stop not being shytie anymore? now thats what i call random “spill over”.

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  52. “True but it is the 80/20 rule here. If property taxes spike (likely) then all properties are affected. Sure a few will absorb that cost but 80% or more will pass that along. Good for the few that negotiate hard or keep searching but most of the rents will rise equal to the spike. It is not like the next town over will not have a similar spike. This means that renters pushed out of Lakeview due to price increases will end up in Uptown etc. ”

    But, with taxes, that incorrectly assumes that places with similar expected rents will have similar assessed values. A 2006-vintage condo in the SLoop is going to have a higher AV than, eg, the allocated AV for the unit HD lives in in a 40/70/100 year old building in Irving Park, nevermind Ma Kettle with the 3-flat and a senior freeze exemption. So, that *also* favors the longterm owner.

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  53. “BTW Rahm can say anything in the election cycle. What will he do once he is there?”

    Well, if he wins, it will be *despite* the public employee unions, so he won’t owe them anything, unlike any of the other candidates. None of the rest of them will do anything to mess with their core constituents.

    And, don’t compare *ANY* of the mayoral candidates (including those who dropped out) to Quinn, who lost any semblance of integrity a long time ago. He’s as ridiculous as Blago or Burris at this point.

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  54. “He’s as ridiculous as Blago or Burris at this point”

    you always for get to add berrios, albeit he is a bit more low key but way over the top for the “matter of fact”.

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  55. “you always for get to add berrios”

    Berrios is a waterboy for Mad Mikey. He has as much or as little integrity as Mikey permits him to have–which, if Mike is *really* trying to set up his daughter for 2014, means that there will be some limits on how bad the Cook County property tax situation gets–need those CC votes for Lisa to have a chance, and if everyone is getting *killed* on property taxes, it’s that much harder.

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  56. Sorry but this tax increase, coupled with the pension legislation, are total game changers for Chicago real estate. This is new information for would be buyers, and I would challenge anyone to review this closely if they are contemplating a purchase in Chicago, or Illinois for that matter. There are obviously better ways to deal with the situation — what has transpired in a few weeks will be devastating for job creation and disposable incomes.

    I expect Chicago CS to significantly underperform the 10 and 20 city index now. This is pretty awful.

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  57. and really when you walk into that booth we are really just being chicago machined again. i would do anything not to have the rahmfather as our mayor but what other choice do we have? Chico, really chico which when you really dig is even more insider chicago than rahm? braun she is looking out for #1 herself. miguel poor guy he just wasnt chicago enough (crooked) to get high profile backing and even he would be business as usual. at least meeks would have made it the most entertaining mayor.

    i say we all write in vote daley, and then force him to stay and take the lashings?

    shoot i would even vote for rhymefest for mayor, but he set his sites too low.

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  58. “chico which when you really dig is even more insider chicago than rahm”

    That’s what I find funny about the (apparent) “not Rahm, he’s the machine” support for Chico–Chico’s had more Daley-provided city jobs than Rahm, and he’s made millions lobbying city/county/state–in other words, getting paid by someone who wants special treatment, potentially costing tax dollars.

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  59. “Berrios is a waterboy for Mad Mikey”

    well isnt that a given for most “voted in” here anyways, i always assumed he is the geppetto at the end of the strings.

    you have a good link to the daughter 2014 conspiracy? seems pretty valid from the track record. i would like to read more on it.

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  60. “Chico’s had more Daley-provided city jobs than Rahm”

    thats why back in october i wrote him off cause he “criticized” the hand the fed him (and his family). i found that distasteful and a bit “backstabby”.

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  61. “This is new information for would be buyers, and I would challenge anyone to review this closely if they are contemplating a purchase in Chicago, or Illinois for that matter.”

    Sure, they’ve bungled things pretty bad, and this version of the tax increase does nothing to fix the long term spending problems. But do you really think a 2% tax increase is what should prompt current renters to pack up and start over in another major city? Where to? IL taxes (and Cook property taxes) are, for the most part, being increased to levels closer to other major cities.

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  62. “But do you really think a 2% tax increase is what should prompt current renters to pack up and start over in another major city? Where to? IL taxes (and Cook property taxes) are, for the most part, being increased to levels closer to other major cities.”

    Don’t let facts interfere.

    Of course, JMM is talking his book. One bright side JMM: you’ll get your company’s tax refund soon.

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  63. this is a remarkably disgusting building and unit, hideous in almost every way,
    designed for the tasteless and perhaps someone with senility or dementia.

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  64. As much as I hate to admit it and as much as I dislike the machine, in the whole scheme of things the tax increases aren’t that big of a deal, it’s just an extra $2,000 for a household making $100,000 and as far as the corporate tax goes, there are always loopholes and ways to keep money out of IL for the big corporations. And the property tax thing sucks too but its more in line with that NY NJ and CA and TX (2.5%) pay in taxes. People deal with it, unions and pensions get fatter.

    Long term however, it contributes to migration patterns of people from the east coast and midwest to the sunbelt. We’re losing another house seat this redistricting and word on the street is that it’s going to be one of the republican held districts. I have about 10 or 11 extended family members of about 25, all raised in IL/WI, and are between the ages of 24 and 45, whom have left the midwest for the sunbelt in the last decade.

    higher taxes, more corruption, more machine politics, it all leads to people leaving this state and calling NV, CA, AZ, GA, SC, FL home.

    “#anon (tfo) on January 12th, 2011 at 11:31 am

    “But do you really think a 2% tax increase is what should prompt current renters to pack up and start over in another major city? Where to? IL taxes (and Cook property taxes) are, for the most part, being increased to levels closer to other major cities.”

    Don’t let facts interfere.

    Of course, JMM is talking his book. One bright side JMM: you’ll get your company’s tax refund soon.”

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  65. “But, with taxes, that incorrectly assumes that places with similar expected rents will have similar assessed values. A 2006-vintage condo in the SLoop is going to have a higher AV than, eg, the allocated AV for the unit HD lives in in a 40/70/100 year old building in Irving Park, nevermind Ma Kettle with the 3-flat and a senior freeze exemption. So, that *also* favors the longterm owner”

    Do you really think that most renters would be comparing similar expected rents from two prospective units with one located in the SLoop and the other in the Irving Park area?

    Annon that comment is absurd. The vast majority of renters will be comparing similar price points and unit styles in a fairly tight geographic area. This means that if all 2003-2007 vintage Sloop hi-rises go up 25% in taxes or if several similar aged buildings in Edgewater experience deferred maintenence costs that trigger a special assessment around the same time that the market will reflect that cost. That is a reality.

    There will always be the lone widow landlady that has a 3 flat paid off and is charging below market rent. For those that look hard they will find that option. The vast majority of renters are not that diligent. They just need a good place to live.

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  66. “do you really think a 2% tax increase is what should prompt current renters to pack up and start over”

    First off it was not a 2% tax increase. It was a rate increase of 2% or more and that my friend is very different. And YES I do agree that this has an effect on the most liquid residents in Chicago aka renters. They are not as tied into a community and the opportunity cost of moving is not as great.

    I have a neighbor that is going to move to a “western mtn state” to get away from taxes. He was pissed when the sales tax rates went up last year. HIs take was that he will never be a high wage earner and that cities like Chicago are taking too much away from his personal discretionary spending. It is punishing him to live in this community.

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  67. jp, you wrote: “It is not like the next town over will not have a similar spike. This means that renters pushed out of Lakeview due to price increases will end up in Uptown etc. ”

    I’m saying the next ‘hood over *will* have many props w/o a similar spike. And, of course I used an extreme example–you weren’t talking about compact rental markets, either–you wrote “all properties will be affected”, which isn’t really true.

    And I’m saying that, in Edgewater, the buildings that remained rental buildings will have a much different tax profile than the condos held by small-time landlords, almost certainly to the advantage of the long time rentals. And I’m saying that, if a 2 BR in IP has $200/mo in taxes, but a 2 BR Wrigleyville has $600/mo in taxes, the W’ville LL will be at a *major* competitive disadvantage, especially considering the higher cost basis.

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  68. Here is a comparison. My in-laws have a great 4 bed 3 bath all brick home with a pool that is located on a golf course in North Dallas area that has a property tax bill of less than 8K. Did I mention that they have ZERO state income tax? And the sales tax in that area is also at minimum 2% less than in Cook county. I pulled this from a google search.

    “The Texas state sales and use tax rate is 6.25%, but local taxing jurisdictions (cities, counties, special purpose districts, and transit authorities) may also impose sales and use tax up to 2% for a total maximum combined rate of 8.25%”

    That my friends means at least $30K in savings to my family each year. Damn good reason to consider moving. Did I mention that the DFW area is showing GROWTH and LOW UNEMPLOYMENT in this difficult economy? Tell your local lawmaker to get their feet back into the library and to order a copy of “Basic Economics” it should be required reading for every elected official.

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  69. Annon,

    You are all over the place here.

    First – forget AV as the only way to increase taxes. All properties will experience higher property taxes over the next few years regardless of the adjusted AV. The government needs more $$$$$ and that will come out of property owners.

    “in Edgewater, the buildings that remained rental buildings will have a much different tax profile than the condos held by small-time landlords”

    How so? Do you think that the tax bill will not go up on a large Edgewater rental building? That logic does not make sense to me at all.

    “2 BR in IP has $200/mo in taxes, but a 2 BR Wrigleyville has $600/mo in taxes, the W’ville LL will be at a *major* competitive disadvantage, especially considering the higher cost basis”

    Yes I agree that the Wrigleyville property will rent for $400 more per month than the Irving Park unit. The values are not even close and the cool kids that “need to live in Wrigley” will gladly accept that higher rent. This has been happening for at least two decades that I am aware of since Wrigley turned the corner. Remember that the location is considered a major competitive ADVANTAGE over Irving Park for most renters.

    Annon you are frequently on the money with your comments but today you have me confused.

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  70. Sorry I meant to say that the Wrigley unit will rent for well more than the $400 difference in additional monthly tax costs over the IP unit. Someone who knows the markets better can back me up but I bet that comparing prime units in the best locations of those two areas will show that they are not even close. Exceptions will appear in any hood but the overall comp is going to favor Wrigley by at least 30% – 40%.

    Anyone???

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  71. “There will always be the lone widow landlady that has a 3 flat paid off and is charging below market rent. For those that look hard they will find that option. The vast majority of renters are not that diligent. They just need a good place to live.”

    Well said, JP3!!!! I completely agree with you because you are 100% right. There IS going to be the occasional landlord that has paid off his unit and doesn’t want to be bothered with keeping the unit empty who will have a lower rent. However, these are going to be crappy places (think about it – if a landlord lowers prices b/c he doesn’t want to deal with a vacancy , do you think that landlord is going to be current with renovations/updates – of course not!!!!). Smart investors or people with nice rentals are ABSOLUTELY going to pass the buck. There is no argument or discussion needed about this FACT.

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  72. “forget AV as the only way to increase taxes. All properties will experience higher property taxes over the next few years regardless of the adjusted AV.”

    It matters in a *relative* sense. If the difference b/t neighborhoods is “worth” $400/month to a typical renter, what happens if the *relative* difference in tax increase makes the LLs breakeven point grow to $500/mo, or $600/mo? Is it self-evident that the cheaper ‘hood experiences a windfall? I don’t think so, so that will lead, over a year or two, to smaller margins in premium ‘hoods, which puts pressure on those peak-era-buyer LLs who have been holding out at breakeven with their mortgages.

    Because it’s not just taxes, it’s overall carrying costs–where the premium units cost *more* than 30-40% more than the disfavor ‘hoods, in the first place.

    And, the fundamental point is, no matter what, the tax increases will NOT be uniform. They will be lumpy and provide a significant cost (or, if you prefer, profit) advantage to longterm owners.

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  73. Of course, those landlords who are presented with a potential tenant who has plenty of income, paying an extra security deposit, signs a multi-year lease, has excellent reccomendations and is friendly may just give that tenant a discount in an attempt to have a nice guy who won’t wreck the place. They may not tolerate a loss but they may see the positives.

    “However, these are going to be crappy places (think about it – if a landlord lowers prices b/c he doesn’t want to deal with a vacancy , do you think that landlord is going to be current with renovations/updates – of course not!!!!)”

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  74. And, the fundamental point is, no matter what, the tax increases will NOT be uniform. They will be lumpy and provide a significant cost (or, if you prefer, profit) advantage to longterm owner

    Your close but the argument misses one key point. Why will they be as you say “lumpy?” I disagree. Why does the longterm owner have a benefit? Their tax rate will increase as well just like the neighbors.

    Sure there will be examples of hoods that are close in distance, commute time, and amenities that will flourish or struggle over the short and long term. Note the expansion of Bucktown as LP rental and purchase pricing got out of hand. The relative elasticity for renters or buyers helped that area expand well above the norm and guess what…..now there are renters and buyers that are fleeing to Humbolt, Ukranian, or Logan as a result. Taxes are only one part of the equation on setting rental value.

    Here is an interesting case study of unusual rental behavior.
    I had a friend who was a waiter. He was what I can only describe as a “cyclical reward” renter. He and his partner would find a crazy land lady to get realy cheap rent for two years and then instead of renewing they would take their actual hard earned savings over that time and rent a luxury high end rental for a year. They knew it was out of reach for their income but they would rather rent big for a year at an opportunity cost of two years in a sub par rental for the experience to have elegant parties and a building with a pool. They had done this for the better part of a decade back in 1995. I lost touch with them long ago but would be curious if they kept that up. I recall it struck me as really odd back then as I hated moving!

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  75. “what has transpired in a few weeks will be devastating for job creation and disposable incomes.

    I expect Chicago CS to significantly underperform the 10 and 20 city index now. This is pretty awful.”

    Agreed. This is the largest tax increase yet during this recession among all governments. It would’ve been better to let Illinois go bankrupt then renegotiate those pensions and other entitlements but instead Quinn thinks its business as usual and this was his plan all along.

    If we join together we CAN get Quinn recalled. The threshold isn’t terribly high.

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  76. Bob,

    I’m in favor of this tax hike on only one condition. That all additional revenue goes directly to pay down the defecits in IL. If spending is set to say 2004 or 2005 levels and then held without ANY increase for four years they have my full support.The need for 2 or 3% increases each year are not acceptable. Even if we dropped to those spending levels there is ALWAYS a way to trim out another 1 or 2 percent to cover any real costs of inflation in the new budget for the next four years.

    If that is not the plan sign me up…BTW has anyone sighted Blago yelling “I told you so?”

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  77. Edgewater east of Broadway is very different from between Broadway and Clark. It’s sometimes called Edgewater Terrace… and while I personally wouldn’t buy there, I own and would buy again just east of B’way. Great restaurants, wonderful diversity. 45 minutes bed to desk Granville to Chicago Red Line.

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  78. “Why does the longterm owner have a benefit? Their tax rate will increase as well just like the neighbors. ”

    Um, because property that isn’t sold gets assessment increases more slowly? Because properties that are older get assessed at lower values? Because many older properties don’t have all of their additions/improvements properly identified?

    Yes, their levies will increase at the same rate, but there is little “fairness” in the Cook County property tax system, and most of the (relative) advantages have and will go to longer term owners in less affluent neighborhoods.

    And, the point within the point I was trying to make is that, to the extent that the tax differential results in a (greater than expected) pricing advantage to non-prime-rental hoods (eg, OIP) AND that advantage puts pressure on prime asking rents (which I *expect* but isn’t certain) THEN there will be additional stress on small LLs in prime hoods, likely leading to further defaults.

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  79. Thanks for taking the bait Anon….

    So what you are saying is that the owner of the tower that does not have any “additions/improvements and is older” will have a marginally lower tax basis. Fair enough I suppose although by how much 5% or 10% at most? The opportunity cost is that the rental unit pricing will be offset by the fact that the landlord of the single unit rental will likely be more updated and in better shape. People buy with their eyes. There will be many visual benefits for the newer or more recently sold unit. Advantage unit owner. In addition the small time landlord will not hire a leasing agent. Lower cost by easily $100 per month.

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  80. “Thanks for taking the bait”

    Look, we’re talking past each other; you’re focusing on narrow markets, I’m not. I don’t disagree with you on the narrow market point, but don’t really care, either, and am (clearly) not going to sway you no matter what I say.

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  81. They supported him as a US House rep, and now they will learn the hard way. Same goes for Quinn voters (at least the educated ones), they deserve to get the tax knife in the back. Ha ha….serves the Rahm/Dem/Quinn fools right. My theory is there are too many knuckleheads that still vote Democrat out of tradition, as the GOP is perceived by many as the party that “discriminated” against their great-great-great grandfather 2 centuries ago after they came here from Ellis Island. Note to Dem voters, JFK was also 50 years ago!

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  82. Hey you av/tax arguers forgot my original question.

    “you have a good link to the daughter 2014 conspiracy? seems pretty valid from the track record. i would like to read more on it.”

    btw, wait for the prop tax spikes you will then see more GZ 2/2 defaulting as accidental LL wont have the cushion to pay the increase of prop tax and the rising ass fee’s plus the wear and tear of short term tenants, and old timers owing out right will get the good tenants with long leases but that either here nor there.

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  83. “btw, wait for the prop tax spikes you will then see more GZ 2/2 defaulting as accidental LL wont have the cushion to pay the increase of prop tax and the rising ass fee’s plus the wear and tear of short term tenants, and old timers owing out right will get the good tenants with long leases”

    No, Groove, the GZ folks will be fine (actually, better off), because *everyone’s* taxes are going to go up by the same amount.

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  84. “But, with taxes, that incorrectly assumes that places with similar expected rents will have similar assessed values.”

    Your original statement was about similar places but as we dug into it I thought that some of your arguments became about very different properties.

    As I said on an eariler post we are often on the same page. I bet that if we spent ten minutes talking about this in person instead of typing blurbs I suspect that we might find common on this subject as well.

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  85. “They supported him as a US House rep, and now they will learn the hard way. Same goes for Quinn voters ”

    This doesn’t make any sense, given the context of the discussion. They are talking about (basically) the *opposite* positions–Quinn selling everyone out to save the union pensions, Rahm talking about making the unions share in the pain.

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  86. If the unions hadn’t supported Rahm in 2002-2008 to be on the national stage, then he’d perhaps not be in the position today to be a public figure that will stab them in the back.

    Funny how Rahm the liberal is now taking a Tea Party position.

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  87. “No, Groove, the GZ folks will be fine (actually, better off), because *everyone’s* taxes are going to go up by the same amount”

    Someone who can’t afford the place simply put will not be able to afford the place. The people who have a moderate cushion can afford to make it work until the next contract comes up with that tenant and then they can choose to keep it the same and decrease profit, increase the rent and try and add concessions for the tenant, or increase and change tenants at a higher rate.

    If the rates go up substantially then even people with major equity and rental only buildings will feel the heat as they are used to that level of profit coming off to help support their own or the investors lifestyle. NOBODY likes going backwards in income.

    Mark my words rents they are a rising in 2011! It will be one of the stories of the year. People are LAZY and hate moving. They see that the economy is tough and will hear and read about rising costs of ownership. The only plus side is that the loans for people on ARM’s are not likely being reset much higher in 2011.

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  88. “As I said on an eariler post we are often on the same page. I bet that if we spent ten minutes talking about this in person instead of typing blurbs I suspect that we might find common on this subject as well.”

    No doubt. I think you’re talking about one thing, and I something else.

    My first point was that 2 places, not on the same block, with expected rents of X are (many times) going to AVs more than 25% different. And thus will have divergent carrying costs, entirely separate from cost basis, and the one’s with higher cost basis (which *will* be the ones with higher AV) are going to get squeezed more.

    And the 2d thought was that, even as you move away from similar expected rents, to expected rental spreads, the lower cost basis + lower carrying cost places will be able to *increase* their pricing advantage (possibly/probably) placing a weight on how much the higher cost places can increase their rents to cover the increased taxes.

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  89. jp3chicago: My in-laws have a great 4 bed 3 bath all brick home with a pool that is located on a golf course in North Dallas area that has a property tax bill of less than 8K. Did I mention that they have ZERO state income tax?

    That my friends means at least $30K in savings to my family each year. Damn good reason to consider moving. Did I mention that the DFW area is showing GROWTH and LOW UNEMPLOYMENT in this difficult economy?

    Illinois has a $15B deficit. Texas has a $27B deficit.

    http://www.statesman.com/blogs/content/shared-gen/blogs/austin/politics/entries/2011/01/10/revenue_estimate_puts_shortfal.html

    And there’s really not much left to cut in Texas’ budget. They are more f***ed than Illinois…

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  90. “No, Groove, the GZ folks will be fine (actually, better off), because *everyone’s* taxes are going to go up by the same amount.”

    No genius for that to be true we’d all have to be at the same income level.

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  91. “Funny how Rahm the liberal is now taking a Tea Party position.”

    Not at all surprising when one actually considers who is backing him. It ain’t a “TP” position, it’s a rational position.

    And, a genuinely “liberal” (aka, not used as a dirty word) position would not include giving government employees pensions so out of step with private business.

    “Illinois has a $15B deficit. Texas has a $27B deficit.”

    1. About the same as Illinois on a per capita basis. 2. With a lower starting tax burden, there’s more room to raise $$ w/o “high” rates. 3. That’s a 2 year deficit, tho the Illinois number is sort of a 1.5 to 2.5 year deficit, AND we have a huge public pension issue that TX does not share.

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  92. anon (tfo): With a lower starting tax burden, there’s more room to raise $$ w/o “high” rates.

    By the same token, IL has more room to make cuts. TX can only raise taxes.

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  93. ““No, Groove, the GZ folks will be fine (actually, better off), because *everyone’s* taxes are going to go up by the same amount.”

    No genius for that to be true we’d all have to be at the same income level.”

    bob we are talking property tax, but i shall forgive you this time. consider it your blago first trial.

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  94. Oh BTW anon

    loved the
    “No, Groove, the GZ folks will be fine (actually, better off), because *everyone’s* taxes are going to go up by the same amount.”
    totally made my day for some reason.

    almost as funny as HD’s cube story. now that one was a knee slapper.

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  95. “No genius for that to be true we’d all have to be at the same income level.”

    Property taxes depend on income? Where do you live again?

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  96. Nice try. It’s a Tea Party position through and through. I didn’t hear Rahm Emanuel backing Ron Paul in 2007 when he was making these arguments. Now Rahm is copying them without attribution which is typical of Dems and RINOs. They will be forced to admit that Tea Party positions were the only rational ones once we look back at 2010 someday.

    “Not at all surprising when one actually considers who is backing him. It ain’t a “TP” position, it’s a rational position.”

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  97. “By the same token, IL has more room to make cuts. TX can only raise taxes.”

    Illinois’ two year budget is about $56B, while Texas’ is about $99B, so I guess I’m not following the “more room to cut”.

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  98. “Ron Paul in 2007”

    Ron Paul was campaign on cutting municipal employee pensions? In Illinois?

    I’m open to believing this, but you need to show me *some* evidence that this is true.

    And if Rahm is copying? SO? Isn’t one point of politics to change the minds of your opponents and get them to do it your way?

    Also, no, I don’t think that across the board tax cuts will be looked back upon as the “only” rational position.

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  99. Dan: there’s a very nice lady in my building, in her 30’s like me, born the same year, she has a professional and secure job, is originally from out of state and went to college in Chicago. She is very liberal – and that’s ok.

    But of all people, I ran into her at the polling booth. and you know how she votes. Voting (D) in IL is not a liberal vote – it’s a vote for (D) machine – and I just wanted to pull her aside and be like “do you have any idea what you’re doing? Do you know that these people are crooks? Anybody but the machine, anybody, please!!!” But like a good (D) voter she votes the machine party line because in her mind the (D) vote in Chicago is the liberal vote. Nevermind that fiscally and culturally we have more in common than she has with other demographic in the city. But regardless, the voter of Northern IL get the representation they deserve. And I hope they like it.

    And the perverse thing is that they do.

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  100. “And the perverse thing is that they do.”

    but so do you, so poetic justice cannot make an appearance for this one.

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  101. anon (tfo) :
    Illinois’ two year budget is about $56B, while Texas’ is about $99B, so I guess I’m not following the “more room to cut”.

    Texas’ population is increasing; even if spending remains the same, services will need to be cut. Illinois’ population is decreasing; even if cuts are made, services can remain the same.

    Theoretically, of course.

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  102. “Texas’ population is increasing; even if spending remains the same, services will need to be cut. Illinois’ population is decreasing; even if cuts are made, services can remain the same.

    Theoretically, of course.”

    Fair’nuf

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  103. Texas is demographically following in the footsteps of California, Cook County, Chicago, etc. They are doomed to hellhole/Blue status at some point, for sure in their urban counties.

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  104. I really don’t like high-rises. The assestments just kill you! Never in a million-years, unless I win the Mega Millions!

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  105. http://www.bizjournals.com/sanantonio/news/2011/01/10/growing-texas-economy-expected-to.html

    Different article different info. This one shows an uptick in population and income over the period in question. WE will not likely have either in IL. In addition how do you come to the conclusion that they have nowhere else to cut? That is ABSURD in a 99Billion dollar budget and is just the thinking that got us into this mess.

    Boil the arguments all down to the simplest micro level. If your personal income and revenue stream was to drop by 30% you would need to make adjustments to your spending habits. If you decided to put this off for two or three years by still continuing to float that pre revenue-dropping lifestyle via Mastercard and Visa then in the end when you finally do accept that a drop in spending is needed it will have to be for way more than 30% to recover those added dollars that you had overspent during the period while you chose to ignore the drop.

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  106. How, exactly, does someone save $30K per year by moving to Texas? And why doesn’t anyone give Chicago credit for saving residents tons of money (not to mention improving traffic and air quality) by being one of the few cities in America where you can truly live without a car or at least have one car per household?

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  107. “How, exactly, does someone save $30K per year by moving to Texas?”

    $12k less on property taxes and no state income tax on an AGI of over $500k. Just that simple, Danny.

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  108. Texas? I could see living in Austin for a few years, if somebody paid me at least double my current salary. But that’s about it.

    Some of us have strong aversions to living east or west of a given street within some of the nicest urban neighborhoods this side of the SF Bay Area or the Upper West Side of NYC.

    Dallas? No, seriously, Dallas?

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  109. “Texas’ population is increasing; even if spending remains the same, services will need to be cut. Illinois’ population is decreasing; even if cuts are made, services can remain the same.
    Theoretically, of course.”
    Fair’nuf

    Theoretically of course…..

    Please proceed directly to Amazon or Borders and buy “Basic Economics” it is a great read. FYI If population is decreasing that will lead to (drum roll please) LESS INCOME TAX REVENUE so your services will need to be cut even more or you will face an even bigger budget gap. You can not continue to pay for services if there is no money.

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  110. But Texas won’t be receiving MORE INCOME TAX REVENUE because the majority of new Texans are under 15 years old.

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  111. “In addition how do you come to the conclusion that they have nowhere else to cut? That is ABSURD in a 99Billion dollar budget”

    That Texas has the lowest per capita budget in the country gives a basis. You don’t agree, obviously, but it takes it out of “absurd”.

    And almost half of the TX budget is education, while Illinois it’s only about 35%, but that’s largely a difference in (1) k-12 funding formula and (2) how cheap it is to go to UT, etc, if you’re a Texas HS graduate.

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  112. ‘But Texas won’t be receiving MORE INCOME TAX REVENUE because the majority of new Texans are under 15 years old.”

    And, more importantly, because they don’t have an income tax.

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  113. Talk all you want about how crappy TX is but they’re gaining four (4) new congressional seats and IL is losing one.

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  114. “Talk all you want about how crappy TX is but they’re gaining four (4) new congressional seats and IL is losing one.”

    Then we should all move to Cali, b/c they have the most congressional seats? Talk about odd bases for determining where one would like to live!

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  115. As someone who moved to Illinois from the Deep South, I definitely understand the allure of living in a place with a low cost of living. And I guess if I made $500K+ per year, I’d seriously consider moving to a state with no income tax. But I’d probably choose Washington state over Texas. It’s hard for me to put a price on the value of living in a state (or city within a state) that values gay rights, abortion rights, public transit, recycling, etc. I also love living in a city with neighborhoods where you can walk to almost everything and take public transit for the rest, but I’m sure a lot of people are just fine with living in one more 4,000 square foot mcmansion in some generic, sprawling suburb and driving to get anywhere.

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  116. “Dan: there’s a very nice lady in my building, in her 30’s like me, born the same year, she has a professional and secure job, is originally from out of state and went to college in Chicago. She is very liberal – and that’s ok. ”

    Ahh the cute ol’ story of the transplant, quite common here actually (me included).

    Lets sum up her story:
    1) Moved here: the big citaayyy for all of it’s cosmopolitanism and perhaps left leaning people at the ripe old age of 18.
    2) Went to college: (probably similarly rewarded by agreeing with profs ideology if small school). Graduated from college and believes themself to be some sort of renaissance scholar of worldly affairs.
    3) Doesn’t like belief systems challenged: the left-leaning media affirms that she is a “good white person” for voting D.
    4) Peer pressure: she couldn’t DARE admit at her friend’s lakefront/downtown/highrise parties (mostly white ppl who all think alike with a few tokens thrown in to make them feel good) that she voted REPUBLICAN. Afterall if you admit you voted republican people a lot of people in Chicago look at you like you have an STD. Can’t have white ppl that don’t conform as group tranquility is key over open discussions from numerous points of view.* *Can have conservative minority/gay in group because diversity trumps tranquility in these circles.

    She’s an automaton/on autopilot in life–unless politically active in some way.

    At the end of the day at least the tax increase gives me fodder for those instances when people complain about it publicly I can query the eligible voters in the conversation and find out: 1) who is a machine D (benefits from current govt), 2) who is an automaton D (HD’s friend), 3) who is an R 4) who is a loonytunes L/G/other, 5) who is eligible who doesn’t vote (Sonies), 6) who is ineligible to vote.

    Automatons are the dumbest and second smuggest (machine Ds are the smuggest and rightfully earned). Even dumber than the L/G/other voters because if you ask an L/G/other voter why they are voting a certain way at least they can succinctly describe why other than D=good, R=bad. At least L/G/other voters aren’t bound by simplistic dichotomies in life whose beliefs, unfortunately, directly negatively affect the rest of us.

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  117. Well said Danny, just because people are flocking to a state doesn’t mean its a nice place to live. What matters is the overall value of life and standard of living. I would argue relative to other large major US cities Chicago is VERY affordable, taking into account taxes and everything.

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  118. This post can not be over looked. Well met, chap:

    #
    anon (tfo) on January 12th, 2011 at 3:36 pm

    ‘But Texas won’t be receiving MORE INCOME TAX REVENUE because the majority of new Texans are under 15 years old.”

    And, more importantly, because they don’t have an income tax.

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  119. Bob:

    So, Is Sonies and his cohort, or the illegal aliens who are the smartest?

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  120. False dichotomy. Either living in a socially liberal place or soulless suburbia.

    “It’s hard for me to put a price on the value of living in a state (or city within a state) that values gay rights, abortion rights, public transit, recycling, etc. I also love living in a city with neighborhoods where you can walk to almost everything and take public transit for the rest, but I’m sure a lot of people are just fine with living in one more 4,000 square foot mcmansion in some generic, sprawling suburb and driving to get anywhere.”

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  121. “So, Is Sonies and his cohort, or the illegal aliens who are the smartest?”

    Sonies sub group: people that don’t vote that lean R.
    Smartest Tied : Machine Ds & illegal aliens.
    Sonies Group Tied: Sonies sub group & L/G/others (same impact on the balance of power).

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  122. LOL

    wouldn’t YOU like to know?

    but I don’t vote because its totally pointless… I don’t complain about taxes much either although I am sure someday I will and on that day I will vote. Or maybe sooner when I realize that 85% of the idiots in this town won’t punch the same party every election and actually look at candidates for their viewpoints and past history and experience outside of the machine

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  123. “Talk all you want about how crappy TX is but they’re gaining four (4) new congressional seats and IL is losing one.”

    “Then we should all move to Cali, b/c they have the most congressional seats? Talk about odd bases for determining where one would like to live!”

    To be fair, this is a rate of change (which maybe could be expressed relative to each state’s number of reps, but whatever) not the gross number. Sorta a very aggregate market test of popularity.

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  124. More evidence that HD’s friend (and her cohort) are automatons: the voting participation rate of college graduates far exceeds that of HS graduates.

    This is likely from every college civics 101 course: you have to vote! All of the emphasis in college is on participating in voting but there is no emphasis in actually making informed, researched voting choices (or even critical thinking anymore). There is an awful lot of “voting with your gut” that goes on in elections and universities are very good at instilling that gut instinct is D and R=bad (Ds give more $ to unis).

    I know an awful lot of younger, lower wage people who lean L who never went to college but they’re not as nearly as active voters because it hasn’t been drilled in their head repeatedly to vote no matter what.

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  125. “At the end of the day at least the tax increase gives me fodder for those instances when people complain about it publicly I can query the eligible voters in the conversation and find out: 1) who is a machine D (benefits from current govt), 2) who is an automaton D (HD’s friend), 3) who is an R 4) who is a loonytunes L/G/other, 5) who is eligible who doesn’t vote (Sonies), 6) who is ineligible to vote.”

    Where do hipsters, who as I understand it drive local politics, fall in this?

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  126. I am not leaving Chicago for Dallas anytime soon but on occasion living elsewhere seems like a pretty tempting idea. The 30K savings were based on 2K or 3k of it from the sales tax savings, 20K in income savings, and 8K in property tax savings. I did not even consider my business although with my LLC that might be a moot point. YesI am aware that we live a fortunate life and our example is above the norm.

    It is pretty easy to take many weekend vacations on this budget and make up for the difference in living arrangements for Monday to Friday.People can learn to justify many things. If I added 30K into the vacation fund we could really have some fun. Too bad our lives are so intertwined to Chicago.

    One physician I know quite well lives in South Dakota and summed it up perfectly. Several years ago he came out of the military and chose to sign on at a specific practice with much hesitation. The cost of living in his town is nothing and the home they built is amazing. The hospital, office, and work enviornment is first class but that is not what got him and his young family to commit to living in SD.

    The group puts in a fixed amount each year for a serious plane membership. I think it’s the Net Jets deal. They have the plane gassed up and ready 4 days per week for the docs personal use. Each one has xx number of days or hours or whatever per month and they can trade/swap/share/or if needed buy additional hours.

    He and his family go out of town frequently. Sure I would guess that it is a taxable benefit or reallocation of profit that could otherwise go directly into his pocket but he explains that the value of that tool is that it gets him and his family to spend time together way more frequently.

    He explained that the group reviewed the cost with a microscope every year for the first five years and voted to see if they all wanted to continue the service. Each year it passed almost unanimously. They were also able to add a second rural office because of the ease of access the jet provided. That made the vote unanimous the next year as the new office has added additional revenue to the practice that helps offset this luxury. Now the plane has also become a recruiting tool. Imagine being picked up for the interview by a practices personal jet. That is a pretty cool perk.

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  127. I would support the income tax increase for the good of the State if I also saw significant cuts in spending in other areas to show they are serious about using the extra revenue to get us out of debt.

    It kills me that people don’t realize how much of their earnings they pay each year in taxes. Some people are probably paying 40% or more of their income in Fed, State, and County taxes. That is straight getting pimped…

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  128. “but I don’t vote because its totally pointless… I don’t complain about taxes much either although I am sure someday I will and on that day I will vote. Or maybe sooner when I realize that 85% of the idiots in this town won’t punch the same party every election and actually look at candidates for their viewpoints and past history and experience outside of the machine”

    Um, first the Rs need to *nominate* and *fund* realistic (ie, not social conservative) candidates for most of the local seats. Who is an R running for Mayor (even tho it’s non-partisan)?

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  129. “I would support the income tax increase for the good of the State if I also saw significant cuts in spending in other areas to show they are serious about using the extra revenue to get us out of debt.”

    yeah I believe I said that a few weeks ago in a post, but quinn is nothing more than a spineless squid

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  130. “Where do hipsters, who as I understand it drive local politics, fall in this?”

    While hipsters as a set are not a large voting bloc (see above: low voting rate participation among HS grads set), they do influence the automaton cohort (HD’s friend) via periodically reaffirming their voting habits.

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  131. I find our discussion quite appropriate considering that a property has been listed for 70% off and it is quite apparent that no one cares.

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  132. “I would support the income tax increase for the good of the State if I also saw significant cuts in spending in other areas to show they are serious about using the extra revenue to get us out of debt.”

    They’re serious about using the extra revenue to retire the pension deficit, thus protecting their own lucrative pensions, along with those of their real constituents, the public employee union members. It’s disgusting.

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  133. “yeah I believe I said that a few weeks ago in a post, but quinn is nothing more than a spineless squid”

    Note how the left sense’s their demise in many areas so seized on the recent tragedy to try to demonize words like “targeting” when they come up for re-election.

    Also just found out the recall stands little chance of success due to one key provision:
    “Permission from lawmakers: The affidavit has to include the
    signatures of 20 members of the Illinois House and 10 members of the Illinois Senate. Half of the signatures from lawmakers have to be from Democrats and half from Republicans.”

    They very deftly made the provision only for Blago type events and the verbiage on the parties can’t be challenged in court (I think) as it’s a constitutional amendment. I would think no way in hell legislation could be held up that specifically mentions political parties but this ain’t legislation.

    🙁

    It appears we’re stuck with this turd for four years.

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  134. jp3… my wife and I were talking about the tax increase today and we were like, well, I guess we can cut out one of those frivolous weekend trips we take from time to time or discretionary spending (eating out, shopping, etc). The point is people will notice it, even people who are deemed to be “rich”. Of course, if others cut out a few frivolities all it does is further hurt the overall economy.

    I wouldn’t have batted an eye for this tax increase had Quinn said we are cutting pensions or something huge and controverisal on the spending side. All that is going to happen at this point is three years from now, we will still have the spending issue and the problem would still be there with and Dems will still be saying they need to raise taxes or else.

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  135. “They’re serious about using the extra revenue to retire the pension deficit, thus protecting their own lucrative pensions, along with those of their real constituents, the public employee union members. It’s disgusting.”

    We can still go BK in 2014+ and then those pensions are on the table. The governor’s election of 2014 will come down to those who want to keep the current tax rate and avoid BK or a real fiscal conservative who is ready to stand up to the unions and potentially include default as one of the options.

    I think a lot of automatons (HD’s cohort) may well drop out of voting participation by then as life here gets harder (so I am hopeful). I think JMM is right in that this will trickle to property valuations which are already on a downward course. The automaton group is going to be more adversely impacted vs. most others (other than young non-college’d voters).

    Most automatons aren’t going to be where they thought they were going to be in life by their 30s. A college degree doesn’t guarantee a job or even living wage employment like it did 20 years ago and the machine can’t provide jobs for the majority of these people.

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  136. “But Texas won’t be receiving MORE INCOME TAX REVENUE because the majority of new Texans are under 15 years old”

    True and false. You are right that the individuals under 15 do not file personal income tax returns. Perhaps you did not read the earlier post that explained how no Texans pay any state income tax. It is the basis of the thread.

    Stick with me here on a basic economic principle. More people in the state will mean more need for products and services. This clearly means more sales revenue for local businesses. This will create more employment opportunities for working adults, and yes they will spend most of those earned dollars in local Texas businesses which in turn will mean additional tax and revenue growth for the local Texas state and city governments.

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  137. Russ – Well said about the potential need to drop a fun weekend and some nights out on the town.

    Guess who this hurts Governor Quinn? Yes the lower wage earners in the service economy and those down-state and suburban “staycation tourists” who had pumped money into our local Chicago economy over the last two summers rather than taking a more expensive vacation to another state.

    Way to screw your constituents that voted for you!

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  138. The tax increase is simply another nail in IL’s coffin.

    What I thought was funny is that I think it was Quinn or Cullerton who said that tax increase would be (and I paraphrase) ‘good for the economy’ because the money will ‘pay IL’s outstanding bills and get into the hands of people who will spend it’. I swear to god, the guy said that the tax increase is good for the economy.

    This state is dying. Drive around Rockford, Decatur, Marion, Ottawa, Effingham, Springfield, Freeport, etc. Those places are on life support. Factories have shuttered. The wal-marts are located just outside of the city limits and all the local businesses have shut down. The housing stock is falling apart. Numerous counties are losing population on a grand scale as young people leave and old people die. The only places left that are ‘vibrant’ are a handful of neighborhoods along the lake in the city and some suburbs. It’s scary to think that many of those factory jobs are now in China and new jobs are opening up in the sun belt not in IL.

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  139. “Way to screw your constituents that voted for you!”

    Only some of them. A lot of lower wage earners in the service economy in Chicago are paid in cash. A lot of them also don’t vote or aren’t eligible (felon, illegal alien).

    A lot of the Chicagoans who voted for Quinn are part of the machine and on the take, as well. If paying an extra 2% of their generous wages but having their pensions and golden plated healthcare plans protected, as well as layoff protection (or LIFO policies with layoffs), they are grinning all the way to the bank.

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  140. It’s a slow decline over a number of years but it happens most assuredly. Look at PA, MI, OH once powerhouse states of industry but today are dying rust belt states.

    Even Rome was a population center for hundreds of years after the decline. It wasn’t until the early to mid middle ages did the population eventually fall to just 20,000 or so people. But it was a dump overrun with wild farm animals and the ruins were overrun with weeds and trees.

    The sunbelt is where it’s at and it’s been this way since the 60’s. The tech boom occurred in CA not in IL. It couldn’t happen in IL. Too corrupt, too many taxes, too bureaucratic, not business friendly. CA is not so business friendly now which is why many of the CA companies are expanding in states that are like Utah, TX, Washington, etc.

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  141. No doubt about your points on pensions and people with vested interests. Once again you are right on the money Bob! When can we get you on the ticket?

    I think that the rep… how dare I even say it. The Repub… I’m still trying to pronounce the word correctly. One more time the REPUBLICAN mayoral candidate might actually get more than 13% of the vote in the next general election in Chicago. If it were run today we would have some added support.

    I’m thinking of the employees at the bigger hotels. Many of them are legal, union members, and though eligible to vote might not be that interested in the process.

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  142. “What I thought was funny is that I think it was Quinn or Cullerton who said that tax increase would be (and I paraphrase) ‘good for the economy’ because the money will ‘pay IL’s outstanding bills and get into the hands of people who will spend it’. I swear to god, the guy said that the tax increase is good for the economy. ”

    That was Cullerton.

    “the REPUBLICAN mayoral candidate”

    Who is that, again? Dock?

    The six remaining: Rahm Emanuel, Gery Chico and Carol Moseley Braun, Miguel del Valle, Patricia Van Pelt Watkins and William Walls

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  143. “I’m thinking of the employees at the bigger hotels. Many of them are legal, union members, and though eligible to vote might not be that interested in the process.”

    Their union leaders would sit them down if they got wind of this and let them know a big bloc to the Rs via them would cause them to be outcasts. Then they throw an open bar banquet or party to bring those votes back.

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  144. The commercial that repeated over and over again starting the day after brady won the primary that said “Bill Brady doesn’t support women’s rights. He’s too extreme for IL” most definitely hurt him.

    Then the moron shoots off his mouth about abortion five days before the election.

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  145. “Then the moron shoots off his mouth about abortion five days before the election.”

    Then certain Chicago precincts were the last to report their results, taking far longer than any other precincts. When I first moved here several years ago was told a tale of a prof sitting at the table of a lady at the luncheon who used to work for the BOE. Apparently she admitted to him they used to wait for other results to come in before presumably fabricating ballots.

    I didn’t think much of it at the time: it was either a one-off thing or perhaps a popular tactic of a bygone time. Given every other precinct except 3 in Chicago had their gubernatorial results come in quickly yet these 3 were delayed significantly has given me pause for thought, though.

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  146. The religious right is what keeps most folks from being Republican. I think they rather deal with the loony environmentalist than loony religious people.

    Seriously, I just want someone to run who understands basic economics and has enough money and ethics to where they really don’t give a damn about special interests. We need someone who really wants to make a change and views being in office as a duty, not a career. They will make the tough decisions and move on and not worry about being re-elected. I wish we had term limits.

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  147. Bob: all Brady had to do was state that he’d leave any reproductive rights legislation alone and I believe he’d be sitting in office right now. But when a candidate says they are going to cut spending, the first place I’d expect the cuts to occur would be in funding for social services they don’t agree with.

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  148. “Bob: all Brady had to do was state that he’d leave any reproductive rights legislation alone and I believe he’d be sitting in office right now.”

    Probably. But a *lot* of Rs would have stayed home or not cast a vote for Guv if he had. He needed to do that *and* come up with something better than “a pound of flesh from every department, but I’m still open to issuing $15B in bonds to fund the Pensions”, which was *also* way stupid.

    “But when a candidate says they are going to cut spending, the first place I’d expect the cuts to occur would be in funding for social services they don’t agree with.”

    Enh, maybe. The Guv doesn’t control everything, and an R Guv would have to work *with* MadMikey to get anything done, so it wouldn’t be just a hack job.

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  149. “all Brady had to do was state that he’d leave any reproductive rights legislation alone and I believe he’d be sitting in office right now.”

    Thing is it was a common mis-perception in the media that Brady would actually have been able to enact any sort of legislation pursuant to his ideology on this if he were elected governor. Everything about the Illinois legislature says he would’ve been hamstrung.

    People that failed to vote for Brady over women’s reproductive rights issues were essentially throwing their votes away on an issue that would’ve borne no substantive policy outcomes. Enjoy your tax hike.

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  150. “People that failed to vote for Brady over women’s reproductive rights issues were essentially throwing their votes away on an issue that would’ve borne no substantive policy outcomes. Enjoy your tax hike.”

    1. Just like those on the other side who supported Brady bc he (pointlessly) said he’d do something.

    2. Tax hike was inevitable, just a matter of size and allocation. Brady didn’t rule out the Pension Bonds–which, w/o a tax hike, would be a junk issue–he just managed to dodge admitting the reality.

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  151. “Tax hike was inevitable”

    The one good thing about this monstrosity is it’s not permanent– Illinois will find itself four years from now doing a mulligan.

    Four years from now (hopefully) less automatons and off-year election cycle so I am hopeful. Hope is free, I guess.

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  152. “The one good thing about this monstrosity (tax hike) is it’s not permanent”

    I hope you are being sarcastic – if not then you are much more naiive than I thought and I lost a little more respect for you (if that is even possible).

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  153. “The tech boom occurred in CA not in IL. It couldn’t happen in IL. Too corrupt, too many taxes, too bureaucratic, not business friendly. CA is not so business friendly now which is why many of the CA companies are expanding in states that are like Utah, TX, Washington, etc.”

    The tech boom happened in Northern California because of Stanford University- basically. It could have just as easily happened in Champaign starting in the 1980s. Both Palo Alto and Champaign were farm towns back then.

    CA is not business friendly at all- and never was. It has a really high general tax rate (business and personal taxes.) But once you got the money there (venture capital) and built the infrastructure to encourage entreprenuership- it flourished despite the high housing prices and other negatives.

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  154. Sabrina – I lived in Atherton (the town next to palo alto) and let me tell you that you cannot compare the two areas (on any level). Palo Alto was never a “farm town” the way Champaign is. It really is like comparing Manhattan to Fargo.

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  155. “Palo Alto was never a “farm town” the way Champaign is. It really is like comparing Manhattan to Fargo.”

    In the 1960s- 1970s? Umm…yes it was. There were literally people with fruit farms all up and down the peninsula. Not much there except the university and a few towns- aka Palo Alto and Menlo Park. In fact, there were so few kids in those towns in the 1970s they had to close some high schools. It was beautiful, open farm land. Sigh.

    The tech boom could have easily have happened in either town. Hewlett Packard and Intel, of course, led the way with hiring engineers etc. But plunk HP down in Champaign 40 years ago and it might have been different there too.

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  156. JasonMChicago:
    “I really don’t like high-rises. The assestments just kill you! Never in a million-years, unless I win the Mega Millions!”
    The money you would spend in HR assesment fees is also spent on non-high rise living in the form of utilites, snow removal, insect/rodent control, cable, water, AC or heat, etc. So either way you look at it YOU end up paying for neccessities in your chosen living arrangement…regardless of what style of housing you chose…..right? RIGHT.
    Also a ‘special assessment’ would equal the amount spent in a non-high rise unit to repair or replace a major item(s). Same thing just different.
    This is the only comment on this thread that I had any interest in responding to. How and/or why do we get SOSOSOSOSOSOSO off topic SOSOSOSOSOSOSO often? Can we take that ‘no speak of interior design’ rule and apply it to other debatable topics on CC? Sometimes things go so far off-topic it is impossible to revert the conversation back to RE or basic unit related matters…and boredom sits in…

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  157. “…so crib chatters what is scarier (RE scary, not clio western scary), the south loop or edgewater/far northside?”

    Edgewater/RP and the rest of the miserable far northside area is FAR more terrifying/scary/dirty/funky/smelly/mental/disgusting/drug filled/dealers attempting to sell or rob you/fugly than any area of SL. I could easily live in a number of the Museum Park area high rises in the SoLo…but wouldn’t want my cremated ashes to be anywhere in the inside of ANY RP residence.
    Overstated my hatred of RP a tad too much?
    Sorry Laura.

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  158. “…PEOPLE WILL ALWAYS WANT TO OWN. I don’t know why – but people tie their self-worth to their possessions.”
    Sure, low self esteem/self hating/self loathing/trying too hard to be accepted/liked people who obtained their wealth from ‘questionable’ sources types might do this.
    Those who worked hard…24/7/365 days a year sweating blood hard work…to obtain their possessions do not place a value on their souls with materialistic items. I calculate my own self worth based on what I have been able to accomplish and NOT what I possess materially.

    Speak for yourself Clio (clio)!

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  159. “I calculate my own self worth based on what I have been able to accomplish and NOT what I possess materially.”

    says the guy with assloads of money

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  160. “Speak for yourself Clio (clio)!”

    westloop – i’m just stating my observations. I can’t help it if it is true that people’s desire for material things is tied to their self esteem. Just take a look at cars, housing, clothes, accessories and you will see that it is true. Why would a woman want to spend hundreds (?thousands) of dollars on a purse when you could buy a functional one at Sears for 20? My wife used to spend hundreds of dollars on pairs of shoes and when I asked why she couldn’t just go to payless, she almost ripped my head off and told me that I was low class and would never understand. Well I still don’t – but I DO know that people will always gravitate to something that makes them stand out and look better than their peers. It is important to recognize this in business (and real estate) if you want to be successful.

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  161. ““I calculate my own self worth based on what I have been able to accomplish and NOT what I possess materially.”
    says the guy with assloads of money”

    Sonies – it’s true – I don’t care that much about my money. I am much prouder of my other intangible accomplishments than money. Seriously, you can take all my money away and I would be OK (because not only have I realized that money doesn’t buy happiness but also I know that I would be able to make it back). The skill set, experience and training that I have undergone cannot be taken away from me.

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  162. oh wait – sonies, I thought I was the one that said that. Sorry.

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  163. “in the 1980s. Both Palo Alto [was] a farm town”

    “But plunk HP down in Champaign 40 years ago”

    Well, if Paly in even 1981 is your concept of a farm town, I don’t really know what to say. There were 52,000 people living in PA in *1960* and 62,000 now; if you’d said “50s”, sure, but the farm atmosphere of PA (which is *not* to say the rest of SC Cty) was well gone by the 80s. Also, find *any* established suburb that didn’t close/reduce HSs in the 70s–it was happening everywhere during the post-boomer era.

    HP would have had to throw over almost 40 years of history in NorCal to plunk down in ChampBana in 1970. Yes, if the Xerox PA Research Center had instead been the ChampBana Research Center, a big piece of the tech boom may have been in Illinois.

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  164. Of course “Chambana” has its own tech-era claim to fame as a birthplace of Netscape, the first consumer-friendly Web browser, right?

    And yes, CC’s chat threads do tend to go off-topic frequently.Reminds me of the old “Peanuts” strip wherein pitcher Charlie Brown calls the team to a meeting on the mound. Each kid brings his/her own agenda to the gathering, leading Charlie to comment: “We may not win any games, but we do have some very stimulating discussions.”

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  165. “Well, if Paly in even 1981 is your concept of a farm town, I don’t really know what to say. There were 52,000 people living in PA in *1960* and 62,000 now; if you’d said “50s”, sure, but the farm atmosphere of PA (which is *not* to say the rest of SC Cty) was well gone by the 80s.”

    I didn’t say Paly was a farm town. The rest of Silicon Valley was. Champaign/Urbanan’s population in 1970s-1980s was bigger than Palo Alto/Menlo Park at the same period. Would you consider C/U a “farm town”? Then why not Paly? Is it because it wasn’t corn but was orchards surround it instead?

    Silicon Valley was called the Valley of the Hearts originally. It was ALL farms. Palo Alto only developed because of the university- same with C/U. Everything around it was open land for decades and some smaller towns.

    Sure- that area had some advantages that allowed it to develop as a tech center- including the nearby military R&D facility. But there is no real “reason” SV developed where it was. It was a mix of luck and the fact that you had Stanford and some other research/companies that developed there. It could have happened several other places. In fact, Boston also had a strong tech presence in the late 1970s/1980s with Wang Computers etc. because of MIT and Harvard.

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  166. “One bright side JMM: you’ll get your company’s tax refund soon.”

    Actually, nothing in the legislation actually causes IL to pay income tax refunds to corporations. That is the worst part — the borrowing piece would have ensured they pay their bills, but I guess creditors will have to wait.

    IL will have one of the highest corporate income tax rates in the country.

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  167. I’d say that the debate as to what Silicon Valley looked like a generation ago, in relation to Champaign/Urbana, is beside the point. Yes, yes, proximity to top universities is key (see Sabrina’s example of MIT), and Stanford had (and has) a lot to do with it.

    But so does quality of life. The so-called “best and brightest” are recruited to, and upon becoming “rich” remain living in, certain regions for a reason: they’re awesome places to live. Is anyone going to doubt the superiority of SV and the SF Bay area over someplace like “Champana” in terms of outdoor beauty, lifestyle, recreational activities, access to all the things one would want in a major city, etc., etc.?

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  168. Sabrina:

    Wow, your knowledge of the history of the bay area is pretty lacking. Techological innovation started in the 1950s post-war era and was a complement, in many ways, to southern california’s strong defense industry. Silcon chips for defense electronics? Then mini computers in the 1970s? Xerox’s PARC? Birth of the GUI in the 1970s? It all grew out of the knowledge base in the area which was not accidental. Unless you argue all history is pure happenstance. Great argument there.

    Stanford is but one piece of the puzzle. You forgot:

    Cal Tech (best engineering school in the U.S.)
    Harvey Mudd
    UC Berkeley (better than Stanford, sorry Clio)
    UCLA
    UC San Diego
    UC Santa Cruz
    UC Irvine
    UC Davis
    USC

    All of which are probably top 50 universities today and I believe all of whiuch have engineering departments or strong mathmetics programs.

    CA has never been optimal for low-tech manufacturing such as metal bending, but it has always been a crucible for knowledge workers.

    North Santa Clara and southern San Mateo counties were not farm towns in the 1970s. I don’t know many farm towns where the residents actually vote to change their incorporated name from East Palo Alto to Nairobi. The open space you see is often protected government land, which is why real estate is so expensive on the penninsula.

    I am not sure where you think your perspective comes from on that area, but there are people here who lived or grew up there during the time frame you cite who I think have better insight.

    And, so you know, no one who lives there refers to Palo Alto the town as Paly. Paly, as anyone who went there would tell you, is short for Palo Alto Senior High School. Go Vikings.

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  169. “I didn’t say Paly was a farm town.”

    Uh, all due respect Sabrina, but, yes you did:

    Sabrina on January 12th, 2011 at 9:34 pm: “It could have just as easily happened in Champaign starting in the 1980s. Both Palo Alto and Champaign were farm towns back then.”

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  170. “And, so you know, no one who lives there refers to Palo Alto the town as Paly. Paly, as anyone who went there would tell you, is short for Palo Alto Senior High School. Go Vikings.”

    My insomnia made me lazy. That one was my fault, not Sabrina’s.

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  171. I don’t understand why real estate is so frickin’ expensive in that area. Atherton, menlo park, palo alto are sleepy little towns (palo alto is a total college town). I bought one of the cheapest houses in Atherton and still ended up spending in the 7 figures for it. There is nothing to do in the area – and SF is 30 miles away. Yeah, the weather is beautiful – but I would take Champaign/Urbana any day (just given the prices of real estate and the much nicer life you could lead).

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  172. I spent like 6 years in C-U and its a dump, AND the weather sucks

    its a bit nicer now, but it still sucks and I was glad to get the hell out of there by the time I was done

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  173. My own family’s connection to Palo Alto was through an uncle on my dad’s side. As the baby of the family, he was the only one who served in WWII and got to reap the benefits of the GI scholarships and home loans. He became a doctor, he married a nurse (Hollywood endings, anyone?), they bought some cheap land in PA on which to have a custom house built, and raised enough kids for a co-ed softball team.

    Needless to say, he left his kids with substantial inheritances, but I believe they sold the family homestead and scattered to the four winds after the ‘rents passed.

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  174. …so crib chatters what is scarier (RE scary, not clio western scary), the south loop or edgewater/far northside?”

    Edgewater/far northside. The housing stock stinks. Sloop prices are depressed b/c the supply outstripped the demand and it came of age at the cusp of the meltdown. The housing stock is still far better and its much closer to downtown and restaurants.

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  175. Why do you think the housing stock stinks in the north side, you have alot of beautiful vintage homes from 1900-1920, in the south loop you have alot of bland looking mid-high rises. Some of which are completely abandoned.

    Aside from some area on the south side, i would say the northside neighborhoods along the lakefront have some of the nicest housing stock in the city.

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  176. “I don’t understand why real estate is so frickin’ expensive in that area. Atherton, menlo park, palo alto are sleepy little towns (palo alto is a total college town).”

    Greenwich, CT and Lake Forest, IL are sleepy towns too. Palo Alto is no more a college town than Lake Forest (Lake Forest College) and Greenwich (Fairfield University).

    The answer is supply and demand. The area itself is on a penninsula with zero undeveloped flat land that is not i) marsh wetlands or ii) government owned / protected parks or open space preserves. The rest is a coastal mountain range which is also largely open space preserves. Add tremendous created wealth, an abundance of high paying skilled jobs (wealth creators), excellent schools and services and great weather and you have a recipie for expensive real estate. Your commute options are across a bay and a mountain range or from SF or SJ which are both expensive cities on their own.

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  177. “an abundance of high paying skilled jobs”

    PA has nearly twice as many jobs as residents–not employed residents, total residents. And people with money value short commutes, even if there were nothing else going on there, that would drive expense. And Atherton is the closest place with a sizable minimum buildable lot thruout the town.

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  178. Los Altos: Redfin has 41 SFHs listed as active or pending on Redfin. Average price $1,800,000.

    Palo Alto: Redfin has 69 SFHs listed as active or pending on Redfin. Average price $1,500,000.

    Atherton: Redfin has 37 SFHs listed as active or pending on Redfin. Average price $2,000,000.

    Even Mountain View, which is the area equivalent of a Chicago Skokie to the North Shore, averages around $944k.

    All asks, but still, take 10% off and call it a day. Plus these houses would seriously underwhelm Chicago area buyers — most are 3br rambling ranches with no basements. You’re lucky if you have a garge.

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  179. “Palo Alto: Redfin has 69 SFHs listed as active or pending on Redfin. Average price $1,500,000. ”

    And that’s brought down by the 5 under $500k props in EPA.

    The cheapest real PA sfh? An 880 sf 2/1 for $749k. shoehorned in on what looks to be about a standard Chicago lot. http://www.redfin.com/CA/Palo-Alto/741-Ellsworth-Pl-94306/home/563021

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  180. Don’t forget the ubiquitous abundance of california’s 2 greatest contributions to the world:

    the option arm loan and the $729,000 conforming loan limit.

    60% of all option arm loans were issued in one state: CA

    toss into the mix in limited amounts of land and 10,000,000 people (iirc) in the greater metropolitan area and you get crazy home prices.

    Also, don’t forget that PMSI first mortgages in CA no matter the amount are NON-RECOURSE. Borrow hundreds of thousands of dollars with an option arm loan to buy a crap shack and walk away with no fear of being pursued for the difference.

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  181. I am telling you – Atherton/Palo Alto/Menlo Park area sucks!!! You guys really should take a look at what is for sale in Atherton (94027). The house I sold was a complete tear down and it looks like the new owner has torn down the house and has the land for sale for 2.6 million. Ridiculous – and it’s on a road named “Avenue of the fleas” (alameda de las pulgas). I am so glad I am out of there!!

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  182. Pulgas is a ghetto street for Atherton.

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  183. “Pulgas is a ghetto street for Atherton.”

    and yet houses are in the 3-8 million dollar range ON THAT STREET.

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  184. I am pretty sure you did not get anywhere close to $2.6M for your home in the late 1990s, if that is really true anyway. Stanford kids rent crap shacks in Atherton all the time. I bet this was one of them.

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  185. JMM – wtf are you talking about?!!! Stanford kids don’t rent in Atherton. The cheapest houses in Atherton are over 1 million dollars (and there is, like 1 or 2 of them). The remainder of the houses are pretty much ALL over 2 million.

    What is YOUR connection to the area? Did you go to Stanford? Did you live there? If not, please shut the f up – because I DID and I DO know what I am talking about!!!

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  186. Lol. They absolutely do, albeit mostly grad students. Several people I know closely lived in Atherton whilst at Stanford GSB or Law.

    Don’t you worry about my connection to the area. Let’s put it this way, I know a heckuva lot more about it than you do.

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  187. “whilst at Stanford GSB or Law.”

    JMM do you just say ‘whilst’ on the internet or do you actually speak it? Or is it just a Stanford GSB or Law kinda word?

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  188. By the way, Clio, since the economics are probably lost on you, groups of students rent one house and then each take a bedroom. But only the cool kids, so clearly you missed out.

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  189. Don’t get your knickers in a bunch. Every once and a while it slips out, sorry.

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  190. you broke clio’s monacle when you made him gasp over how he doesn’t know jack about atherton

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  191. Yeah there was a little rage there. Every once in a while he comes out of his shell right?

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  192. “Yeah there was a little rage there. Every once in a while he comes out of his shell right?”

    And it’s odd for someone so in tune with the local scene to not have any idea that Paly High sports don’t actually have a national following.

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  193. JMM, now you’re talking sh@t. I can say I know more about the north shore than you without providing any further information. Does this make it true? – of course not!! You need to either fess up about how you know “so much” about Atherton or shut the f#ck up. I was a homeowner and lived there, so I DO know what I am talking about.
    As for trying to make me “jealous” that I wasn’t part of the cool crowd… that is laughable – if you knew me, you would know that I was and always have been the center of attention….(? I don’t know if that is good or bad – but it is true).

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  194. Lol. Hilarious. Thanks for the rant.

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  195. no problem, jmm. we all have to get our entertainment somewhere…..

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  196. As a pricing update, I saw a bunch of cheap units at 6030 N Sheridan pop up on MLS today:

    Unit 1405
    1 BR
    39.9K

    Unit 2105
    1 BR
    49.9K

    Unit 1805
    1 BR
    49.9K

    This was actually the very first building I looked at when I began my Chicago home search in August 2009. I didn’t like it. Studios and 1 BRs in that building were going for about 100K and up at the time. The unit I viewed was 85K. It was a very small studio in a blah location in a blah building without any amenities. I wouldn’t recommend anyone buy here.

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