Slow Sales Spell Trouble for Some CHA Partnered Developments

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February 9, 2009 – We’ve posted a few times about the $10,000 grant offered by the Chicago Housing Authority to 100 first time buyers in certain developments. The total number of takers on the grant ended up being only 49, which is a bit of a blow to the Partnership for New Communities plan. Crain’s reports that the CHA has now decided to put their energy into rental units as opposed to the for sale units in these mixed-use, mixed-income developments.

This is in contrast to their original plan to draw more middle income residents into some of these neighborhoods. But with financing becoming more difficult to obtain, even the city is turning to renting, like many Chicago real estate developer have recently. The city had planned on redeveloping some 25,000 residential units, a third of the new or renovated units selling at market rate and a third as affordable or below market rate. But with slumping condo sales, the only short term alternative is to offer the units for rent. The one good aspect for former residents who had to move due to tear down of the old public housing on the sites is that new homes will be available to them sooner as rentals.

The article went on to highlight a couple of Chicago condo developments that are part of the CHA project and are reportedly having trouble selling units. Park Boulevard has trimmed down their planned 311 condo units to only 159. Jazz on the Boulevard developer Thrush Cos. was forced to auction off units at big reductions this past December due to lagging sales and looming construction loan pay back dates. And Crain’s claims that the 245 unit second phase of Roosevelt Square is stuck with only 50 units under contract so far. The CHA states that they believe the second phase will now go up in smaller phases, but there is no official word from the developer, Related Midwest.

Condo Developers in Chicago had been in line to build around 800 units in partnership with the CHA this year, but unless they can make pre-sales and get financing, that isn’t going to happen.

[tags]Roosevelt Square, Chicago Condos, Chicago Real Estate[/tags]