Mayor Rahm Emanuel has regularly touted his administration’s ability to lure corporate headquarters to Downtown from the suburbs — and beyond — and last year boasted of the record number of tower cranes adding to the city’s office and residential tower development.
Emanuel, who stunned the city Tuesday when he announced he would not seek a third term, has led Chicago during a time of explosive real estate growth that tracked the nationwide economy’s strong recovery following the recession.
But during his seven and a half years in office, the mayor has also been criticized for what some critics say has been an administration too focused on Downtown development — at the expense of the surrounding neighborhoods. In recent months, Emanuel launched a flurry of efforts designed to boost affordable housing, though skeptics viewed them as window dressing designed to address the “two Chicagos” criticism and mollify minority voters running up to his now-abandoned re-election efforts. That phrase about two Chicagos, one for the rich and one for everyone else, was generally directed more at the inability to stem the city’s violent crime problem, along with its drop in job opportunity and population.
Alan Lev, president and CEO of Belgravia group, said Emanuel’s decision not to run again adds uncertainty for developers, who now have to wonder what policies a successor will bring.
“As a business person you like predictability,” Lev said. “After eight years (with Emanuel) you come to know what to expect.”
While Emanuel generally was considered pro-business, Lev has taken issue with some of his policies, including the Affordable Requirements Ordinance that sets minimum levels of affordable housing in new developments.
“On the other hand, look at all the cranes around town,” Lev said. “He’s got to be doing something right.”
Housing prices overall in the city have continued to rise during Emanuel’s tenure but Chicago as a whole has lagged behind other big cities. One recent report showed only 1 in 8 ZIP codes had recovered to pre-recession levels enjoyed under Emanuel’s predecessor, Mayor Richard M. Daley.
But the current mayor’s efforts to lure companies to the city helped spur hundreds of thousands of square feet of office development Downtown, particularly in the West Loop and the scorching Fulton Market District. His administration’s work on the downtown riverwalk — and other restorative projects along the river — has also significantly boosted development in downtown and beyond, market pros said.
Massive downtown residential projects, like Related Midwest’s two condominium towers on the former Spire site, and Lendlease’s three-tower project just south of the spire, incorporate the riverwalk into their ambitious plans. And there is $12 billion in mixed-use developments coming to the site of a former industrial plant on the river’s north brand and a stretch of the river near the South Loop.
The mayor has taken pride in his corporate recruiting skills. The most prominent of the relocations came this summer, when McDonald’s moved into a new headquarters in Fulton Market after decades in the western suburbs.
“He certainly was helpful in bringing in businesses to the city. It’s been good for the Downtown,” Lev said.
Emanuel’s administration has also touted the redevelopment of the 2.8 million-square-foot Old Main Post Office; the project got its first major boost after Walgreens announced it would move much of its operation to the long-vacant property. Other corporate relocations during included ConAgra Foods, Motorola, Archer Daniels Midland, Kraft Heinz and GE Healthcare.
Google and Facebook have also made splashy entrances to the Chicago office market, and both companies are seeking to expand their local footprint. He has called the city the “digital mecca of the Midwest.”
That moniker hasn’t really stuck, though Chicago is still in the running for Amazon’s planned second headquarters, with the city and the state offering a reported $2.25 billion incentive package to the e-commerce giant.
One of the proposed sites for HQ2 is Sterling Bay’s planned Lincoln Yards project on the North Branch of the Chicago River, an area now open to potential office and residential uses thanks to Emanuel’s efforts to lift protections for industrial properties in the North Branch Industrial Corridor.
The efforts to bring in new companies led to a need for new workers Downtown, one factor often credited with driving the city’s hot multifamily market. Combined with a wider move toward renting versus buying, the need to find housing for workers — particularly millennials — led to the surge in apartment development and condo deconversions, experts have said.
But with rising demand for apartments have come rising rents, and some critics said Emaunel didn’t do enough to promote affordable housing and stem gentrification. He did however, preside over the 2015 passage of the Affordable Requirements Ordinance and last year’s revisions to it, which imposed stricter guidelines on how much affordable housing developers had to provide in some new projects.
In the past year, Emanuel’s administration announced a series of efforts designed to bolster affordability, including resurrecting the city’s housing department to oversee them all.
One was a program to sell developers lots across the city for $1 each, in exchange for building single-family homes and two-flats on them that would be sold to qualified buyers with incomes up to 140 percent of the area median. The city agreed to reduce permit fees to make the program more appealing to developers, and to try to attract more small and minority developers.
Earlier this year he proposed the Building Neighborhood and Affordable Homes pilot program to provide $40,000 to $60,000 to qualifying applicants toward the purchase of homes built through the $1 lot program, and who agree to live in them for 10 years. That effort is to be funded with $5 million from a fund that developers pay into instead of including affordable housing units in their projects.
That program came on the heels of another effort to provide low-cost financing to developers who buy multifamily buildings, if they agree to guarantee that 20 percent of the units remain affordable for 15 years.
Another program would expand the city’s rules regarding transit-oriented development to parcels along major CTA bus lines. While Emanuel touted that proposal as another way to encourage affordable housing, developers cheered it as a way to eliminate the costly and sometimes unnecessary expense of building an equal number of parking spaces to housing units.
Overall, Lev said Emanuel can’t take sole credit for the city’s growth.
“He isn’t as responsible for some of the good things … just as he isn’t as responsible for some of the bad things,” he said.