Take a flyer with me today. This is a blog about change, race, real estate values and the chance to make a fortune if my left field projections are actually correct.
Amazon will make its decision shortly about where to build its new headquarters. It’s original home office will remain in Seattle, but its second home will be built somewhere else in America. Chicago is one of the finalists.
Consider the other likely candidates such as Boston, Dallas, Atlanta, Washington DC and Chicago. Chicago is only a 4-5 hour plane ride from Seattle, making it a strong candidate. Chicago has another big advantage. It’s offering Amazon a huge clean site that the city acquired following the financial collapse 20 years ago, the former Michael Reese Hospital. The site can be expanded to 100 acres. The beauty of it—is the beauty of it. It is adjacent to Lake Michigan near McCormick Place, I-55 and outer Lakeshore Drive. It is located on several rail arteries and accessible to downtown on lakefront bike paths. It is within biking distance of the University of Chicago, Northwestern’s Downtown campus, University of Illinois Chicago (UIC) and Illinois Institute of Technology. Loyola and DePaul Universities are easily accessible too.
The Amazon Headquarters would mean eventually 14 million square feet of buildings plus the amenities and service businesses that go with it. A conservative estimate is 50,000 jobs will be spawned.
Amazon choosing the Michael Reese site would be a fascinating scenario because of the primarily African-American population that borders it on the south side of the city. Would the most valuable company in the world, Amazon, locate its $50 billion gem in a Black area of Chicago? I think so, because 100 acres flat against the beautiful lakefront land in Chicago trumps other considerations. Amazon will build its own neighborhood.
America has changed enormously since I grew up a few miles south of the Michael Reese site. (Incidentally, I was born at Michael Reese Hospital.)
The racism that infected my childhood and colored the way I have looked at the world ever since is much different today. Barack Obama was President for eight years and his library will be built 15 minutes south of the Michael Reese site. I live in a southern Chicago suburb that’s more black than white. The Starbucks where I’m writing this blog has a 50-60% African American customer base.
Most of the Jewish people who once filled the four synagogues in the area I live in have died or moved away. Yet I am very confident that a new wave of Jews and other white people, even with children, will soon be moving back into my area, which is a 25-minute commute to the 100-acre Michael Reese site. This is going to happen even in the unlikely event Amazon does not opt for Michael Reese.
Apple will be building its own 50,000 employee second headquarters in a few years. One of the key factors a company like Amazon or Apple considers when building a new site is the availability of affordable housing in an urban area. Chicago ranks high in the nation on accessible affordable housing for potential younger employees.
Chicago’s Southside and the South Suburbs have available housing, lots of land, plenty of water, excellent transportation and infrastructure, and a desire to take advantage of it.
My old friends whose children have all left the area laugh at me when I outline my Amazon scenario, but the house flippers and real estate speculators are not laughing. They are buying right now. Better to be a little early than too late.
I make my living by identifying undervalued assets. Rarely have I seen an opportunity with such a big upside as the spin off housing of the Michael Reese development.
Question: Is racial makeup one of the first things you consider when buying property in a new neighborhood?
11 Comments
the snow should be no problem with what every the current crowd is calling call global warming ? just a matter of time – then palm trees on the beach- not sure the “jews and other white people ” is a good fit –
I think you are right – unless it is grabbed for the new pres library LOL
You certainly could correct, but I tend to think it will be somewhere warm, not as “Cold as a Brass Toilet seat in the Yukon” in Winter!!
Lloyd, i think racism has more to do with education level than anything else. if people have a little respect and education, then i believe all people are the same. if you go to these “bad” neighborhoods, i would suspect that most people that live there dont have much education. if you dont move into an area because of the color of the people who live there, you are a racist. one of my favorite charities in rockford is KFACT. they work with minority ladies from junior high school and turn them into college graduates. some of these young ladies grew up in poverty, some of them have been homeless and living in shelters, they have suffered abuse and all types of problems. by the time they get to high school, they are respectful young ladies with goals in life. 98% retention rate in the program, 100% graduation rate in high school and 98% graduation rate from college. i would be honored to live next to any of them. check out their website, http://www.k-fact.org. you can donate from their homepage if you feel so inclined. organizations like this can change the world.
I have never considered race when looking to move into a new apt or home. It’s only about does the home suit what we need. That being said, the last couple of homes we purchased were new builds bought before the foundation was even laid. We had no idea who our neighbors were going to be. The previous one purchased in 1997 turned out to be a very diverse neighborhood: Phillapino, Korean, Indian, Chinese, Black, White, Vietnamese, etc. The home we purchased 5 years ago turned out to be predominately Indian with some Chinese. There are only 2 other white families in the neighborhood. We laughed the day one of our Indian neighbors commented that we must really like ‘brownies’! Both were great homes in good neighborhoods.
I somewhat agree with what Al said – that education is a factor. But unfortunately it’s not the only factor. Bad experiences, stereotypes, and upbringing also play a role. And, there is plenty of ‘reverse’ racism as well. I’ve had mothers of other races not allow there daughters to come over to play with my white daughter.
Truthfully my consideration would be the quality of the people who live there.
Race would have nothing to do with it. So now what do I mean by quality.
I would determine that by how well the neighborhood is cared for.
Currently I live in what some people would call an affluent neighborhood.
Across the street I have a neighbor who is in his late 80’s who is a Holocaust survivor.
On the right side is an Armenian family and on the left is an Egyptian family.
All good neighbors.
The comments are interesting, but I think there is a disconnect. When I was growing up a neighborhood was “Black” or “White”, virtually nothing in between. It has gradually changed but in much of the Chicago area it is still like that. That is my frame of reference. The neighborhoods surrounding the Michael Reese property are generally like that. The area where I live now is a “mixed” area which is rather unusual even today. My discussion is about whether the infusion of huge resources from Amazon will force a radical shift in living patterns. Will a voluntary integration based on economic interests foster a socio-economic sea shift in Chicago. Will the attraction of a $200,000 house which would be comparable to a $400 or $600,000 house push people to make the choice to live next to somebody who looks different. Will convenient, appealing real estate trump racial stereoypes and fear? I think Amazon will test that theory, but maybe it will follow past patterns and just push the poor people of color to the next ghetto. That’s the question I am trying to address. It ain’t simple “black and white”.
Interesting topic. Since I have not been to Chicago in a number of years, what ever became of the area where the Robert Taylor housing projects were located? Also I had heard that the area just west of I-94 in downtown Chicago was developed into upscale hipster area. Is this true?
In my hometown of Miami, my old Catholic high school was recently shuttered due to lack of attendance. It was located about 3 miles north of downtown Miami. In the 1930s, 1940s, and 1950s, the area was mainly blue collar. In the 1960s there was more of a Hispanic influence from Cuban refugees. In the 1980s, it became Little Haiti with the Haitian refugees. Most of the surrounding area was really rough and has had quite a few murders profiled on the TV detective show, The First 48. I have heard that the 20 acre site of my former high school will probably be sold for approx. $60 million and upscale high rise condos are contemplated for the site. No doubt in my mind, that the area is changing and current residents will be displaced by probably accepting a decent offer for their current property.
For a primer on housing discrimination, please refer to Sidney Poitier’s movie from the 1960s, A Raisin in the Sun. It takes place in Chicago. Also the following NPR link is a pretty descriptive account of the practice of ‘redlining’ that occurred in Detroit to keep neighborhoods segregated.
https://www.npr.org/sections/thetwo-way/2016/10/19/498536077/interactive-redlining-map-zooms-in-on-americas-history-of-discrimination
I think Chicago is off the list. Every time I visit (mostly for IMTS) you have striking on the streets and increasing demands by labor unions. I think the Unions are not the primary decision in the selection, but will be part of the consideration. Consider the recent Seattle implemented “Workers Tax”. The bill passes and major corporations revolted. I think they see Chicago as another risk and will look to a southern state (Atlanta) with lower cost of living and a major airport. You cant place the two headquarters further apart but I think traveling to board meetings is slipping as technology evolves and younger leaders assume positions. Sure there will be cross commuters but they could divide the country down the Mississippi into East / West.
The Cubs suck, GO TRIBE
Race, absolutely not. You cannot even trust the racial statistics out there anyway.
Crime is what I look at. If there is crime for get it.
I go by condiments on the restaurant table. Is there salt and pepper shakers on the table? If yes then it’s a good neighborhood, with a little crime. Is there napkins and salt and pepper shakers on the table? Then it’s a real good neighborhood with even lower crime. Is there A-1, mustard, ketchup, napkins and salt and pepper shakers on the table? Then crime is almost nonexistent and it’s an excellent neighborhood.
We are also coming up on a possible future in the form of a Grand Solar Minimum. Within 8 years snow could be 6 to 12 feet deep in Chicago. It will be impossible to survive there. Move now while you can.
I think Amazon’s new location is going to come down to dollars and cents — what city offers the best longterm deal. For Bezos and Amazon that’s what really counts, the bucks. Everything and everyone else be damned. They’re going for total domination.