Market Conditions: Are People Really Fleeing Illinois?
Maybe some of the Chicago Tribune reporters are secretly reading Crib Chatter because they just published a story looking into the belief that people are fleeing Illinois, which we’ve been chattering about a lot this year.
From the Tribune:
When the Tribune looked at the demographics of people who moved out of state from the Chicago area — Cook, DuPage, Kane, Lake, McHenry and Will counties — it found the income and racial breakdowns for this group generally mirrored the patterns of the overall population in the area. Most of the movers made $50,000 or less in income, and most were white non-Hispanic, according to census survey data collected from 2013 to 2017.
Those who left the area were more likely to be young; the largest group, 28%, were in their 20s when they moved away. Census data shows that people of this age have the highest moving rate nationally.
People moving from the region to neighboring states tended to earn a bit less and have fewer years of schooling than those who moved farther away, the data shows. Those moving to non-neighboring states also skewed a bit older.
Of the black residents who moved out of Cook County, 85% stayed in Illinois, compared with 77% of white residents leaving Cook.
The number one destination for those leaving Illinois in the last decade?
Indiana.
Other Midwest states are also popular along with the Southeast, including Florida.
Census data on commuter flows indicates that roughly a fourth of all employed people who live in Lake County, Indiana, work in Illinois. So even though people like Thacker may be trading driver’s licenses and voting places, they often remain connected to Chicago.
Incidentally, though Lake County is often portrayed as a beneficiary of Illinois’ woes, the county has actually been losing population recently as well. The decreases are small, but Lake has been shrinking since 2010.
According to the Tribune, Chicago has shrunk 20,200 since 2015. It has lost 35,600 black residents while it has gained white, Latino and Asian residents.
Where’s everyone going?
For black Chicagoans who leave, it’s the Chicago metro area, followed by Atlanta, St. Louis, Indianapolis and Houston.
For white Chicagoans who leave, it’s the Chicago metro area followed by St. Louis, Phoenix, Minneapolis and Denver.
The Tribune says the Chicago metro area extends to both Wisconsin and Indiana.
Christine Percheski, an associate professor of sociology at Northwestern University who studies changes in U.S. family life and has analyzed census reports, surveys and other demographic research, said some people certainly move because of taxes or crime rates.
But the biggest reasons people usually give for moving, Percheski said, are jobs (or shorter commutes), schools and to be closer to family. People also seek out available housing that fits their needs, she said, whether that is more space for a growing family, a smaller place because children are grown, or a more affordable option.
“Population decline for a city as big as Chicago or a county as large as Cook County is probably not driven by small changes in taxes or crime rates,” Percheski said.
According to the article, most people leave for jobs or schools. Some also leave for more affordable housing such as the couple in the article that rented in Pilsen before buying in Indiana.
Additionally, this year’s census data is going to be key as preliminary reports for the first half of the year show tremendous statewide job growth which should indicate that more people are moving to the state than leaving.
We will see if things are starting to turn around.
But someone is living in the thousands of new apartments that are going up all over Chicago. Are they all locals or are they moving to Chicago from elsewhere?
You can read more of the data, along with some great charts in the Chicago Tribune article.
Is the “exodus” really even a thing?
There’s a lot of talk about an ‘Illinois exodus’ [Chicago Tribune, by Cecilia Reyes and Patrick M. O’Connell, September 25, 2019]
I’m pretty sure Lake County, IN property taxes are higher than Chicago’s. Porter County, IN is where property tax rates really drop. Wisconsin property taxes are quite high. Colorado property taxes are super cheap but housing is expensive.
I don’t believe individual responses can be representative of the reason why you are losing population in “net”. People are constantly moving to and from places for jobs. But if 3% of those leaving are do to taxes and then you lose 3% of incoming population do to taxes it adds up over time.
Also those who care most about taxes may be those creating the jobs. Why was a company founded in Texas instead of Chicago. It’s the population flow on the margins that end up effecting the net migration numbers. And very important to ask who would have moved here if not for taxes.
Multi family apartments are not just a chicago thing. It’s across the nation. Luxury apartments are far more operationally efficient compared to condo buildings. And investors love multi family as an investment as a yield pick-up play versus ten year treasuries. But from an individuals perspective why are you buying a condo and paying 5% real estate commissions plus 2-3% transfer taxes when you likely not going to own it over 7 years.
The tax issues in Chicago only really started 2-3 years ago as the duel hit over big increases and SALT deductions hit. And the pensions are no where close to being funded. It’s scary what is still to come on tax hikes. A recession proof economy that has still lack to a government that has zero plan on how to fund itself.
numbers don’t lie, the IRS doesn’t lie, wirepoints did a 3 part piece on this and yeah, Illinois is losing its tax base, rapidly
https://wirepoints.org/illinois-shrinking-tax-base-310-billion-in-accumulated-losses-from-out-migration-part-3/
Idiots running the great state of Illinois can’t even balance a budget when the economy is on fire, the heck you think will happen when gdp growth slows or goes negative, a federal bailout ain’t happening… so what, you’re just stuck with getting your paycheck fisted by the state and city you live in… totally worth it, right?
I suspect the people leaving are at the margins. Low income and escaping crime. I know this is the case in the black community. People leave to get away from the crime and the move south, particularly to cities like Atlanta for more opportunity.
There is obviously an influx of high income professionals or else downtown Chicago wouldn’t be booming. S
Studies like this are often too broad and need a deeper look at the demographics of who is leaving and who is coming.
There was an article in WSJ yesterday about millenials seeking out smaller cities.
https://www.wsj.com/articles/millennials-continue-to-leave-big-cities-11569470460?mod=searchresults&page=1&pos=7
From Sonies link:
“The Volunteer State has added an average of 20,000 net residents and $600 million in net AGI yearly to its economy since 2000.”
That’s $30,000 per person. Yes, I know it’s AGI, not actual gross, but it’s also about half of the Chicago Metro per person income.
probably a bit easier to live in Tennessee on 30k a year per person than Illinois…
Yeah, no doubt.
But new/newer build SFH in central Nashville are ~$300 psf, just like here. The burbs are certainly cheaper on the whole tho.
While vacationing in Indiana’s Amish country this summer, I goofed around on Zillow for a while. I was shocked by how high property taxes were. We always hear that Indiana is a low tax state, but I’m not convinced the difference is as great as people think. Indiana also has a hefty sales tax, though not as large as ours.
And if people are moving to Phoenix or Florida to get away from crime, they are in for a rude awakening.
“While vacationing in Indiana’s Amish country this summer, I goofed around on Zillow for a while. I was shocked by how high property taxes were. We always hear that Indiana is a low tax state, but I’m not convinced the difference is as great as people think. Indiana also has a hefty sales tax, though not as large as ours.”
====================
Like New Hampshire; Loudly proclaims its lack of a sales tax and no income tax, but the property taxes and fees for everything are a baseball bat to the gonads.
That said, Illinois taxes are too high because venal politicos and unions have run the show for far too long.
“Like New Hampshire; Loudly proclaims its lack of a sales tax and no income tax, but the property taxes and fees for everything are a baseball bat to the gonads.”
Incorrect:
https://herald-review.com/news/state-and-regional/govt-and-politics/indiana-is-less-taxing-than-illinois/article_6b3ee6ff-8549-5d40-b712-e6b1729b52d8.html
“That said, Illinois taxes are too high because venal politicos and unions have run the show for far too long.”
Correct:
I don’t get why people say they are leaving Illinois and moving to Indiana or Wisconsin… its pretty much the same shit, (crap weather, high taxes) just without the ridiculous pension mess and if you stay working in Chicago, god that commute would blow ass
“… Loudly proclaims its lack of a sales tax and no income tax, but the property taxes and fees for everything are a baseball bat to the gonads.”
Incorrect”
HD reverts to form (ie posts bs/lies/misdirection) in support of his argument that Indiana just gently taxes its residents, while ignoring Indiana’s several annual taxes on individual & business personal property. For example iirc Indiana’s annual fee for owning HD’s Silverado (or any other vehicle w/MSRP above $42K) would start at $532/yr. And IN imposes higher income tax than IL in several counties – but why would HD let facts inconvenience HD when HD’s supporting a position?
“I don’t get why people say they are leaving Illinois and moving to Indiana or Wisconsin… its pretty much the same shit, (crap weather, high taxes) just without the ridiculous pension mess and if you stay working in Chicago, god that commute would blow ass”
Because they actually LIKE the Midwest. And there are a ton of job opportunities. And their families and extended families are all in the area. They can still drive to Christmas, graduations and weddings from those states.
It’s a myth that “everyone” is fleeing to Texas or Arizona.