Chicago may be touted as a “world-class city” by local political bigwigs, but Illinois currently ranks among the top three states in the nation losing residents to the Sunbelt.
Last year, a whopping 105,200 Illinois residents left for warmer southern or western states, reported the U.S. Census Bureau. Only New York and New Jersey lost more residents to the Sunbelt, according to a survey by United Van Lines.
Experts say the aging Baby Boomer population of the Midwest and Northeast is choosing to retire to warmer regions. The most popular states gaining population are Florida, North Carolina, South Carolina, Texas, Arizona, Tennessee, Georgia, Washington and Oregon.
U-Haul reports that it rented trucks to more people leaving Chicago than any other city except Houston, and the majority of those departing the Windy City were headed either to the suburbs or to the nation’s Southern states.
So, what is driving all those people out of town?
• Lack of housing affordability. With most homes and condos on Chicago’s North Side priced at $350,000 or more, many young people planning to start a family are leaving Chicago to find affordable homes in the suburbs.
The median price of resale homes and condos in Chicago was $235,000 in November of 2015, up 2.2 percent above the $230,000 median price in November of 2014, reported the Illinois Association of Realtors (IAR).
If you shopped for a home or condo in Lincoln Park in 2015, you would have paid a steep median price of $522,000. The median price in West Town is 449,000, compared with $387,500 on the Near North Side. (Median price means that half the homes sold for more than half for less.)
Homes and condos in Lakeview sold for a median price of $340,000 in 2015, compared with a lofty $493,500 in North Center, and $365,000 in Lincoln Square.
Homes in the suburbs cost less, and suburban schools generally are better. In the nine-county Chicago-area, the median home and condo price was $196,000 in November of 2015, up from $181,690 in November a year ago.
• Skyrocketing property taxes. When Mayor Rahm Emanuel’s $542-million property tax kicks in later this year, experts say the city’s affluent North Side lakefront neighborhoods will be hit the hardest.
The tax bill on a $1-million home in Lincoln Park likely will skyrocket about $1,200 when the second installment of the 2015 tax bill is issued in August.
Cook County Assessor Joseph Berrios’ office estimated huge assessment increases of 28 percent to 33 percent in some attractive North Side neighborhoods.
Assessments are expected to rise around 33 percent in Streeterville and River North, and about 32 percent on the Gold Coast, Near North Side, Lincoln Park and Bucktown. In Wicker Park and Ukrainian Village assessments are up about 28 percent.
• Special taxes and fees. Owners of single-family homes, 2-flats, 3-flats and 4-flats in Chicago will be required to pay a new garbage hauling fee of $9.50 a month. The fee will show up on the water and sewer bills that go out every other month. However, senior citizens get a break. They will pay only $4.75 a month.
Homeowners and businesses also will be slapped with two increases in the portion of their property taxes devoted to Chicago Public Schools. Some $45 million in new taxes will go to pay for school building projects, and another $19 million is earmarked to cover direct education costs. The owner of a $250,000 home in the city will pay about $51 more in property taxes to cover the school increases.
People who stream Netflix and other entertainment services will have to pay the city’s 9 percent amusement tax. There also are new taxes on electronic cigarettes and the liquids that fuel them. A 15-percent taxi fare increase recently went into effect, and ride-share fees also are higher.
2016 looms as a very taxing year for property owners.
For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.