Housing Boom on Tap for Downtown Chicago; Will the Bubble Burst?

Alby Gallun looks at Chicago's downtown apartment boom, which is supposed to add 4,700 units to the market by the end of 2014. Will lenders allow the bubble to burst?

1 minute read

February 8, 2013, 7:00 AM PST

By Jonathan Nettler @nettsj


While developers are signing up in droves to join the growing contingent of apartment builders, Gallun asks if anyone is guarding against a repeat of the city's recent condo boom and bust. "The question is whether construction lenders will let the party get out of control — like they did during the condominium boom — or whether they'll take away the taps at the right time," he says. "Many apartment developers and investors continue to express faith in the ability of lenders to stay disciplined, financing only the most worthy projects and preventing a potential glut."

“Even if we're not concerned, the lenders are concerned,” said Jay Javors, president of Midwest Property Group Ltd., a Chicago developer.

"Developers have flocked to apartments as rising rents, occupancies and property values offer the potential for tantalizing investment returns relative to other assets," explains Gallun. "Other developers are taking a more cautious approach toward apartments, wary of starting a project in such a frothy market. That includes Mr. Javors, who compares the market to a game of musical chairs."

“Nobody wants to be the last one without a chair,” said Mr. Javors, whose last big project was a 329-unit apartment tower at 210 N. Wells St. completed in 2010. “We're looking, but we're not going to kill ourselves to have a project going.”

Wednesday, February 6, 2013 in Chicago Real Estate Daily

Chicago Intercity Rail

Amtrak Ramping Up Infrastructure Projects

Thanks to federal funding from the 2021 infrastructure act, the agency plans to triple its investment in infrastructure improvements and new routes in the next two years.

September 25, 2023 - Smart Cities Dive

View of Interstate 205 bridge over Columbia River with Mt. Hood in background.

The Unceremonious Death of a Freeway Expansion Project

The end of an Oregon freeway project didn't get much fanfare, but the victory is worth celebrating.

September 19, 2023 - Streetsblog USA

Google maps street view of San Francisco alleyway.

Ending Downtown San Francisco’s ‘Doom Loop’

A new public space project offers an ambitious vision—so why is the city implementing it at such a small scale?

September 26, 2023 - Fast Company

Aerial view of coastal development and bright blue ocean in Kaua'i, Hawai'i.

Kaua’i County Uses Long-Range Models to Mandate Resiliency Standards

The county requires builders to assess potential flood risks using models that account for sea level rise projected as far out as 2100.

September 28 - Smart Cities Dive

Semi truck driving down freeway with twilight sky in background.

California Governor Vetoes Autonomous Truck Ban

Gov. Newsom called the new law unnecessary, citing existing efforts by state regulators to develop new rules around autonomous trucking.

September 28 - Wired

Roadside motel with turquoise room doors in Tucumcari, New Mexico.

Low-Barrier Motel Shelter Is a Success—But Not an Easy One

Many guests at Motels4Now are on their second or third stays—but staff say that's doesn't equal failure, and the numbers bear that out.

September 28 - Shelterforce Magazine

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.