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"What the hell is going on in Chicago?"
I must admit, when I first heard that statement from President Donald Trump, it angered me. The Donald has said a lot of cringe-worthy things over the years, but this struck a nerve.
That rough comment was certainly targeted at Chicago's reputation for escalating violent crime (and, many Chicagoans believe, Trump's desire to disparage the hometown of the president who preceded him, whenever he has a chance). Those points notwithstanding, Chicago does exhibit a confounding set of statistics and indicators that really make one wonder about the Windy City's direction.
Here's what I mean. There is good Chicago news that shows it's keeping up with the high-flying metros:
• Last year, for the fourth consecutive year Chicago ranked first among large metros (over one million) for corporate relocations and expansions, according to Site Selection magazine. The magazine noted 424 relocation or expansion projects in the Chicago area in 2016, translating into $2.8 billion in new investment and more than 14,000 jobs, according to World Business Chicago.
• The number of corporate relocations and expansions is creating a construction boom in the Windy City. For two years running Chicago has ranked second in the number of active construction crane use, behind Seattle, according to the Seattle Times' analysis of data from Rider Levett Bucknall, a firm that tracks construction crane use around the world. One only need look at the city's ever-changing skyline for confirmation.
But there is middling to subpar news about Chicago that shows it's not performing economically at an elite level, like many of the global cities and tech hubs it compares itself to:
• Data from the U.S. Bureau of Economic Analysis shows that of the 30 largest U.S. metros (more than two million residents), Chicago ranks 14th in its growth rate of GDP per capita between 2008 and 2016, and ranks 13th in absolute GDP per capita. In both cases, ranking above Chicago are the global "superstar" cities and tech hubs that are familiar urban revival success stories, and ranking below it are tourism-oriented Sun Belt metros and manufacturing-oriented Rust Belt metros still recovering from the Great Recession.
• In an article I recently published at my Forbes blog site comparing large U.S. metro housing markets, Chicago stood out as an outlier that defied easy characterization. Comparing the 51 largest metros (those over one million residents) using U.S. Census data from 2008 and 2016, I found that median home values dropped from an above-average $269,900 in 2008 to a below-average $229,900 in 2016, a drop of 14.8% and the largest such drop among the metros evaluated. The home value decline puts Chicago in the same category as hard-hit Sun Belt metros like Las Vegas, Orlando and Tampa/St. Petersburg. However, median rent values rose dramatically, going from $772 in 2008 to $1,050 in 2016, an increase of 36%. Although the absolute median rent value is not as high as some of the high-priced metros, Chicago's rate of change is: only Denver, Portland, San Francisco, Seattle and San Jose saw their median rent values rise at a faster pace. And Chicago's dearth of housing unit growth, just 1.1% between 2008 and 2016, puts it on par with Rust Belt brethren Detroit, Buffalo, Pittsburgh, Cleveland and St. Louis, which all had housing unit growth rates less than 1.5%.
But what draws nationwide attention to Chicago is its poor demographic and social indicators:
• In absolute terms Chicago has led the nation in total murders for at least three years running, with 496 murders in 2015, 762 in 2016 and 679 in 2017.
• For some years now, however, Chicago's murder totals have overshadowed the fact that it has a lower murder rate than many cities. For example, in 2015, Chicago ranked 25th in overall murder rate with 17.52 murders per 100,000 residents. Cities with higher rates in 2015 include Pittsburgh (18.57), Atlanta (20.23), Oakland (20.33), Kansas City (23.03), and Washington, D.C. (24.10). St. Louis, Baltimore and Detroit had the highest murder rates in 2015.
• Similarly, Chicago ranks high, but not the highest, for its overall violent crime rate. In 2016 Chicago ranked 24th in a list of the 25 "most dangerous" cities, with a violent crime rate of 1,106 incidents per 100,000 residents. St. Louis led this list with 1,913 incidents per 100,000 residents.
Taken together, it means that Chicago has a confounding set of demographic characteristics that set it apart among American metro areas:
• Between 2010 and 2016, the Chicago metro area grew only 0.55%, going from 9.46 million to 9.51 million residents over that span. The meager growth rate ranks it 31st out of the 34 metros with more than two million people, beating out Detroit, Pittsburgh and Cleveland.
• The city itself has followed suit, growing only 0.35% between 2010-2016. Of the 34 cities with more than 500,000 residents, only Detroit, Baltimore and Milwaukee had slower growth.
• The stagnant population in Chicago is the result of some significant churn. The number of whites and blacks are down significantly in the metro area since 2010 (-3.0% and -5.1%, respectively), but offset by strong growth among Latinos (6.8%).
• Within the city, however, the results are more striking. The number of whites and Latinos has increased slightly since 2010 (3.2% and 3.6%, respectively), but the city's black population appears to be in freefall -- down -10.6% since 2010, and down a staggering 25.5% since 2000.
So what type of city and metro is Chicago exactly? Is it the darling of the corporate set, becoming a fantastic location for headquarters relocations and expansions? Is it a place with a middling economy, perhaps still struggling with its transition from manufacturing-oriented to the 21st century New Economy? Is it a place with a crime and demographic profile more akin to its Rust Belt and Old South brethren, with less in common with the coastal superstars?
Intriguingly it's all of the above. And that makes it difficult to make any kind of guess what Chicago's future will be.
The only way I can make sense of what's happening in Chicago and what could likely come of it is with a space metaphor. Chicago is like a rocket whose design, engine and fuel -- its economy -- is sufficient to get it into a low orbit circling Earth. Chicago has enough momentum, because of its location, its size, and educational and institutional assets, to maintain its low orbit virtually into perpetuity.
Consider the rocket's cargo, Chicago residents. The low orbit works well for those who know how to use it to propel themselves to higher levels. But those looking for the Chicago rocket alone to boost them to higher levels may find themselves disappointed; it simply doesn't have the power to push it further out.
Here's where the metaphor gets a little fuzzy. I'm not certain if the Chicago rocket cargo, the residents, is jettisoning itself in an attempt to reach individual higher orbits, or if Mission Control -- the political and economic elite that guides the rocket -- is leading the jettison to reduce weight and allow the rocket to ascend to a higher orbit.
This piece originally appeared on The Corner Side Yard.
Pete Saunders is a Detroit native who has worked as a public and private sector urban planner in the Chicago area for more than twenty years. He is also the author of "The Corner Side Yard," an urban planning blog that focuses on the redevelopment and revitalization of Rust Belt cities.
Photo: Chicago from above via visittheusa.com
Government malfeasance
What's wrong with Chicago is government malfeasance. The bankruptcy of state and municipal governments casts a cloud over the entire region.
Each Illinois household owes $41,000 in government debt. (I believe that's just state debt; municipal obligations are additional.) Property taxes are gonna go through the roof. Accordingly, people are more likely to rent than buy, which explains the rise in rents & decline in property values.