Fall 2019 Edition
Rogers Park Builder
The RPBG’s writer and editor, Steve Cain of Greenspire Capital, who works on our quarterly newsletter as a labor of love, has compiled an exceptional newsletter.

Please read Steve’s interview with Assessor Kaegi, Tom Heineman’s article about a serious issue plaguing Rogers Park and other communities along the Lakefront caused by rising water levels pounding our shores, among other interesting and timely articles.

And, a hugely impactful County Ordinance scheduled to take effect on January 1st will forever impact the way we handle tenant screening. My column reviews key terms and concepts that are part of the Just Housing Ordinance and its governing rules. Those of you who joined in on our Calls to Action helped make a difference as we await the Board Rules Committee review of the final rules. 

My column is based on the draft of the rules pending as of the date of release of this newsletter, which might change in the days ahead.

Michael Glasser
Rogers Park Builders Group
Fritz Kaegi is a man on a mission, and his “to-do” list is long. He will need time and resources to get everything done, and both are in short supply. But, if my one-hour interview with Mr. Kaegi is any indication, Mr. Kaegi is not put off by the challenge. If anything, he strikes me as being very much up to the task.
A top priority in his first several months in office has been explaining to taxpayers what he is trying to do and why it matters. This effort began prior to his election and resonated enough with voters to hand him a stunning and decisive victory over incumbent Joe Berrios in the March 2018 primary. He easily beat his Republican challenger in the general election the following November.
This is not the first time the Eastlake Terrace beaches, parks and buildings have been impacted by high lake levels. In 1986, lake levels were at a 100 year high with serious damage to both private and public properties. As of July of this year, the average Lake Michigan-Huron water levels were within a few inches of that 100 year high. This is just after a 100 year low in 2013. Apparently, global climate change and its related extreme weather patterns is impacting our lives in a very direct fashion.
The Greater Eastlake Terrace Beaches Park Advisory Council (GET Beaches PAC), was formed in 2016 to address the loss of sand and recurring damage to our seawalls and beaches along Eastlake Terrace. We have had some success focusing attention on our beaches. We have done this through direct pressure from the PAC and the 49th Ward office and particularly through TV news reports on our damaged beaches in 2018 and then again in 2019. Former Alderman Moore exerted pressure to do major park district funded repairs at Juneway and Howard Street beaches during the fall of 2018.
The continuous barrage of political and economic news can seem overwhelming at times. This information shapes the aggressiveness or conservativeness of our buying and selling attitudes. Despite the affect this news assault has on our moods, how much does it really influence the Rogers Park market? Does trade policy with China impact gross rent multiples on Touhy Avenue? Do impeachment proceedings in Washington alter price-per-units on Eastlake Terrace? And how much do the fears of rent control, housing plus and property tax reassessments change the capitalization rates on Estes Avenue?
Rather than relying on the insights of a grizzled broker, perhaps we should simply look at what has transacted this year in the Rogers Park apartment market and compare that data to prior years. And assuming this isn’t fake news, the facts may be surprising.
Through the first three quarters of 2019, there have been 11 larger apartment sales in Rogers Park. For purposes of this discussion, the 11 building, 181-unit Eastlake Terrace portfolio is counted as one transaction since it closed as a single sale. Although each transaction is unique, the overall metrics are helpful in framing market trends.
The constant torrent of local and national news is distracting. It is also probably the reason you may not have heard about the newly formed Affordable Requirements Ordinance (ARO) Task Force. This announcement was made on October 14th by the Chicago Department of Housing (DOH) under the auspices of newly elected Mayor Lori Lightfoot. The Task Force will be charged with revamping the current ARO which was first adopted in 2003 and was most recently changed in 2015.
Since its adoption in 2003, the ARO has gotten increasingly onerous for developers. The last round of Aldermanic elections brought a new group of Progressive Alderman to power. Chicago now has six, self-proclaimed Democratic Socialists, up from just one before the last election cycle. Some of these Aldermen were quick to call for even more onerous ARO requirements than those adopted in 2015.
California recently joined Oregon as the second state in the nation to adopt statewide rent control legislation. The California measure passed on September 11 and was signed into law by Governor Gavin Newsom on October 8. The law limits annual rent increases to five percent and offers additional protections to tenants facing evictions. Oregon passed its rent control legislation – the first such statewide law in the nation – in February of this year.
There is little dispute about the severity of California’s housing crisis. It is real, and it is getting worse. Anyone who has not been to San Francisco or Los Angeles lately is in for a shock upon arrival. Literally thousands of people live on the streets, many in sleeping bags and tents on city sidewalks, in city parks and under highway viaducts. The scale of the problem is overwhelming. There is no equivalent in Chicago or the Midwest.
Everyone has a story to tell. But, let’s be honest, some stories are more interesting than others.

I recently had the great pleasure of sitting down with Ibrahim Shihadeh, a prominent property owner who has long been active in Rogers Park, and who is now a Director at RPBG.
Ibrahim was born in 1948 in a small village in Palestine, not far from Jerusalem. The story of his journey to America is extraordinary. Even more extraordinary is what he did with the opportunities he found in his adopted country. For someone with a fascination (some would say fixation) on immigration, I can think of no better example of the benefits of immigration than by simply telling Ibrahim’s story. While it is true that he is a man of extraordinary drive and ability, it is also true that Ibrahim’s accomplishments in this country would have been much harder to replicate in his native land given the difficult circumstances of that part of the world, both then and now. In many ways, Ibrahim is the personification of the American Dream and is an inspiration to us all.
As I See It
Come January 1, 2020, two new protected classes* will be created in Cook County, joining 15 others** that already exist.
1.     Ex-offenders with criminal convictions over three years old will have protections, as those of us who are housing providers can no longer deny an applicant for rental housing nor consider a conviction three years or older (presuming that the rules, as presently proposed, go into effect; one exception, those whose names appear on a sex offender registry lists or who are subject to a child sex offender residency restriction).

2.     Nor can we deny ex-offenders with criminal convictions under three years, unless and until we perform an individualized assessment.
Steve Cain
We are staring down the end of one year and the beginning of another – and not just any year. Twenty-twenty promises to be like no other, with an election looming that will be as momentous as any in recent memory.

A year out from election night, it’s hard to say who the candidates will even be. It seems highly likely that the Republican candidate will be incumbent Donald Trump. But his erratic behavior and current Whistleblower troubles hold the remote, but not inconceivable, possibility that the Trump presidency will come crashing down before the election even happens.

As for the Democrats, it is much harder to predict who the candidate will be. Biden remains the front-runner, but seems wounded by the Whistleblower controversy due to the unseemly appointment of his son, Hunter, to lucrative Board positions in China and the Ukraine. Bernie Sanders still has lots of popular support, but recently suffered a heart attack. Elizabeth Warren is surging, but is she too liberal for the Independent voters who will likely determine the election?
Verella’s Round-Up
Verella Osborne, President, Legal Document Management, Inc.
Two property owners recently drafted residential Chicago leases in which they have the right to increase rent during the term of the lease. One tied the rent increase directly and proportionately to any real estate tax increase occurring during the lease; the other just inserted a general right to increase the rent by no more than ten percent (10%) during the term. Such rent increases may seem detrimental from a marketing standpoint, but consider the following list of costs that have increased during just the last 12 months:
  • The new Cook County Assessor has already initiated massive increases in property assessments that will likely lead to significant increases in real estate taxes.
  • Eviction filing fees, enacted by Cook County in July 2019, have increased 50%.
  • Eviction lawsuits are now lengthier and more costly as a result of e-filing (e.g., longer trial dates, more costly forms, even worse service by Cook County Sheriff).
  • The recently enacted, badly drafted and downright ignorant “Just Housing Ordinance” will significantly increase your leasing costs and rental losses. The Cook County Commissioners who enacted this ordinance did so with absolutely no knowledge or understanding of the reality of leasing to applicants with criminal histories and its impact on tenants, buildings and neighborhoods, while still holding owners liable for criminal activity on your property. The lengthier, two-screen process now in place for each applicant will add cost and potentially expose you to increased liability for failure to comply.
  • General maintenance and repair costs have increased. Many property owners no longer collect security deposits as an offset to ensuing rental losses due to concern over frivolous CRLTO lawsuits.
Around Rogers Park
(773) 728-9900 | www.rpbg.org
Rogers Park Builders Group encourages and supports responsible residential and commercial property investment, development, and ownership in the Rogers Park community.