# Six Homes, One Payment

It’s been a while since I’ve gone and done some real math for you guys. Let’s fix that. It’s easy to look at the sale price of a home and have that be the deciding factor on what sort of house you buy. However, your monthly payment is what will dictate if you can stay in that house once its yours. Today we’re going to calculate the average affordable monthly payment for a Chicago homeowner, and look at six different types of homes they could afford with wildly different purchase prices.

## Step 1: Establish the monthly payment.

We’ve used the American Housing Survey (AHS) data from 2009 before. It’s a little dated at this point but it’s the only trustworthy survey that has numbers for the City of Chicago. Within that survey we discover that the median income for a Chicago Homeowner’s Household was \$56,200 per month. Divide that by twelve months and you get a monthly income of \$4683.

Many lenders use 33% as the percentage of your income that should go towards housing costs. For today, we’ll consider those housing costs to include your mortgage, your property taxes, your homeowner’s insurance, assessments, and utility bills. 33 percent of \$4683 is just over \$1545, which is the number we’ll shoot for.

## Step 2: Determine some scenarios.

For this exercise I wanted six different scenarios, all for the same monthly payment. I chose three single family home options and three condo/co-op options.

• A 5 bedroom single family home in Austin
• A 3 bedroom single family home in Lakeview
• A 3 bedroom LEED-certified single family home in North Center
• A 1 bedroom condo in a high rise building with doorman & pool in the Gold Coast
• A 2 bedroom condo in a vintage courtyard building in Lincoln Park
• A 2 bedroom condo in a small co-op in Lakeview

## Step 3: Source some utility, insurance and property tax rates.

For utility rates I went back to the same AHS data. I discovered that on the low end a homeowner would pay about \$115. The median was about \$350 and the high end would be way up around \$700 per month for a big drafty house with a deluxe cable package and super fat internet bandwidth.

For the monthly insurance I used a ballpark figure that insurance would be the sale price divided by 3500.

Property tax numbers were sourced from actual listed 2011 taxes for properties similar to the ones I’m describing that have sold within the past four months in Chicago.

For all purchases I’m assuming an interest rate of 3.5% (the current national average on BankRate.com) except for the co-op, as those tend to be tougher to fund. For the co-op I’m using an interest rate of 3.625%. I’m also assuming a down payment of 20% of the purchase price. If you’d like to play with the interest rate, down payment and other financing aspects, you can check out the mortgage scenario calculator I wrote a few months ago.

The monthly homeownership cost consists of many smaller pieces.

## Step 4: I do math for you.

The first scenario is the big single family home in Austin. This area has low property taxes but high insurance rates. Since it’s a big, old house the utility usage is about as high as it can possibly get.

 Monthly Property Tax Escrow \$125.00 Monthly Homeowner’s Insurance Premium \$80.87 Monthly Utilities (Heat, Power, Stove, Water, Cable) \$700.00 Monthly Mortgage Principal & Interest \$636.29 Total Monthly Payment Â \$1,542.16 Initial Loan Balance Â \$139,521.58 Maximum Home Price Â \$174,401.98

The next scenario is for a smaller single family home in Lakeview. Property taxes are much higher here than they are out in Austin, as are list prices. However, the insurance premiums would be a little lower here and for the smaller house it would cost much less in terms of utility bills.

 Monthly Property Tax Escrow \$750.00 Monthly Homeowner’s Insurance Premium \$32.88 Monthly Utilities (Heat, Power, Stove, Water, Cable) \$350.00 Monthly Mortgage Principal & Interest \$405.00 Total Monthly Payment \$1537.88 Initial Loan Balance \$90,191.47 Maximum Home Price \$112,739.34

So, moving in from Austin to Lakeview means you can afford \$61,000 less house if you want to keep your monthly payment consistent. Now, what if we scaled back our neighborhood choice to something nice but not outrageous in terms of property tax, and cut back those utility bills with a LEED-certified Green home?

 Monthly Property Tax Escrow \$350.00 Monthly Homeowner’s Insurance Premium \$80.57 Monthly Utilities (Heat, Power, Stove, Water, Cable) \$115.00 Monthly Mortgage Principal & Interest \$992.43 Total Monthly Payment \$1538.00 Initial Loan Balance \$220,982.46 Maximum Home Price \$276,228.08

So moving just a few blocks north from Lakeview to NorthCenter and focusing your search on green homes can more than double how far your monthly budget will stretch for the same size house. Pretty cool.

Now what about condos and co-ops? Our first condo is a little one bedroom in a building full of amenities. Let’s figure that the building has a full-time doorman, an exercise room, party room, roof deck, elevators, business center, receiving room and a dry-cleaners on site. These buildings tend to include most of your utilities, and the insurance premiums are really low. The assessments, however can be quite pricey. The number I’ve chosen for assessments in this case is far from the lowest in the Gold Coast area, but leaves at least a little room for a mortgage payment on top.

 Monthly Property Tax Escrow \$183.33 Monthly Homeowner’s Insurance Premium \$25.78 Monthly Utilities (Power, Cable) \$115.00 Monthly Condo Assessment \$900.00 Monthly Mortgage Principal & Interest \$320.89 Total Monthly Payment \$1,541.61 Initial Loan Balance \$70,705.66 Maximum Home Price \$88,382.08

Wow. What a difference those assessments made. But not all condo buildings have ridiculously expensive monthly dues. In fact, the median condo assessment in Chicago according to the AHS was \$325. A big condo in a smaller development will have higher property taxes, but much lower condo fees.

 Monthly Property Tax Escrow \$487.38 Monthly Homeowner’s Insurance Premium \$41.33 Monthly Utilities (Heat, Power, Stove, Cable) \$350.00 Monthly Condo Assessment \$150.00 Monthly Mortgage Principal & Interest \$517.03 Total Monthly Payment \$1545.75 Initial Loan Balance \$113,371.02 Maximum Home Price \$141,713.78

So. Suddenly another \$50k to spend. Kinda neat, don’t you think?

Now, I’ve been neglecting co-ops and one of my clients yelled at me for doing so lately, so I’m going to make a point to include them more. So, our last option is a co-op. Because the co-op pays taxes as a single entity, your property taxes in this case would be rolled into your monthly payment. However, since many major lenders won’t finance purchases in co-ops you’d have to settle for a higher interest rate than normal on your loan. Your insurance premiums would also be higher, as many insurers avoid writing policies on co-ops. In this case I’ve chosen a real co-op that includes heat, water and cable in the monthly membership fee. I should note though that the listed amount of \$548.80 is on the lower end for a co-op monthly payment.

 Monthly Property Tax Escrow \$0.00 Monthly Homeowner’s Insurance Premium \$80.57 Monthly Utilities (Power, Stove Gas) \$115.00 Monthly Co-op Membership, Incl. Taxes & Remaining Utilities \$548.80 Monthly Mortgage Principal & Interest \$781.00 Total Monthly Payment \$1527.47 Initial Loan Balance \$171,252.66 Maximum Home Price \$214,065.83

## So Why Do We Focus on Price?

So with six wildly different prices all leading to the same monthly payment, why do we talk about price at all? Well, while there’s a massive gap between the low end and the high end of buying power outlined above, we do need to consider what’s realistic in the areas I specified. While the last two condo prices are within range of a short sale, the other four are pretty much non-existent in the neighborhoods I chose unless you’re a cash buyer working the foreclosure market. You can muck about with the assorted components of the monthly payment all you like, but if you can’t afford to purchase the property in the first place it’s all academic.

The point of all of this isn’t to say that the price should be totally neglected. Rather, it hopefully will serve to give you an understanding of how lifestyle choices can affect your buying power. After all, if you knew that your choice to live in a high rise was going to knock \$125.6k off of your price point, would you still want all of those amenities? If going for a new, green home could more than double the amount of house you can afford, would you still want that lovely old Victorian?

On the other hand, if you’re comparing the monthly cost of owning a home with the cost of renting, it is worthwhile to consider the whole scenario. The monthly rent for most of these properties would be between \$1800 and \$2400 per month and you’d still have to pay utilities on top.

This Friday we’ll have a guest post for the landlords. I’ll see you guys Monday.

# Making It Your Own vs Just Owning

Today: Extreme home decorating, TRON style! (Just kidding. Well, about the TRON bit, at least.)

I used to work in Chicago’s ample theatre scene for several years before I got into real estate. In fact, theatre is what brought me out here – I started my Chicago tenure with a year-long stage management internship at Steppenwolf in the late 90’s. The best introduction to this article that I can think of involves reaches back to those days for the story of a set designer who was pretty well known in Chicago for her adventurous scenery endeavors.

Normally when a set designer first visits a performance space he or she will take measurements of the existing dimensions so that they can create a set that will fit on the existing stage. This is logical. The designer I’m speaking of would walk into the theatre with her plans already fixed in her mind and start her assessment of the space with “okay, first off we’ll need to knock out the back wall of the building.” Most of the time she was quite serious about this opening volley and would have to be negotiated down to something that left the masonry reasonably intact.

Oddly enough, her sets wound up being the most creative and best suited to the scripts they surrounded than any of the others I’ve seen to date.

# 10 Unexpected Reasons Why Tenants Get Rejected

The “Landlord’s Applicant Rejection Kit” actually exists, and is published by Nolo.com.

According to Chicago’s fair housing laws, a landlord cannot use a tenant’s race, color, sex, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, marital status, parental status, military discharge status or source of income as a reason to select or reject their application. They can’t use any of those as a basis for showing or refusing to show them an apartment. Most tenants are aware of these laws and most landlords follow them to some extent or another. They may not know all of the specific protected classes for housing, as Chicago has more than other cities and states, but they do the best they can.

High credit scores, verifiable income of a reasonable amount and a clean prior rental record remain the holy trinity of landlords’ criteria for approving a renter. They allow a landlord to make a decision on the main issues that matter without risking a fair housing lawsuit. However, in the interest of protecting their buildings and minimizing maintenance costs a landlord may use some secondary, non-protected criteria in addition to the big three. Today we’re reviewing some of those surprise factors that could kill your chances of landing your dream apartment so that you can plan around them. (more…)

# Confronting our Agoraphobia, Part III: The Long Road Back

(This is part 3 of a series that started with Confronting Agoraphobia, Part I: Carefully Taught and Confronting our Agoraphobia Part II: The Bad Guys are Winning.)

## Where We’ve Been

Over the past two entries in this series we’ve reviewed how bargaining has gone from common to rare, and how shopping in America has become a passive experience. We’ve discussed how the evolution of marketing and discounting have consolidated the power of pricing entirely in the hands of the manufacturers. We’ve discussed the potential gain from choosing to haggle – a peak negotiator saved \$2500 in a year. That means an average negotiator could save about \$1500. What we haven’t discussed is how to work our way back to an even distribution of power.

Let me expand on that number a bit. \$1500 saved per person, per year. 206 million adults in the United States, give or take a hundred thousand or so.[1] Roughly 10% of them are incarcerated.[2] If the rest of them saved \$1500 per year, that would total \$278.2 Billion saved. Annually. (That’s about 2x the annual revenue of Wal-Mart as reported to the NYSE,[3] or, sadly, just 1.7% of the national debt at this moment.[4])

Let’s have one more quote to get things moving forward:

“A recent Consumer Reports survey showed only 28 percent of Americans haggle over prices. A separate report from market research firm BIGresearch found 45.1 percent of adults haggle for things other than cars and homes.

However, the Consumer Reports survey found that consumers who haggle succeed as often as 83 percent of the time in landing a better bargain.”

— Yuki Noguchi, “Haggling picks up steam during recession,” NPR.org, August 2009.

1. [1]Wolfram alpha: What is the adult population of North America, July 2012.
2. [2]NY Times: Adam Liptak, “1 in 100 U.S. Adults Behind Bars, New Study Says,” Feb 2008.
3. [3]Ycharts: Wal-Mart Stores Revenue (WMT) as of July, 2012
4. [4]US National Debt Clock, July 2012

# Confronting our Agoraphobia, Part II: the Bad Guys are Winning

This is part II of a series that started with Confronting Agoraphobia, Part I: Carefully Taught.

## Rollback Further

My folks have a good friend – we’ll call him Doug – who’s learned a thing or two about saving money. A wunderkind who made an early fortune in the evolution of microloans, he knows that small amounts add up. He’s also learned that to most businesses any sale is better than no sale. Doug haggles for everything. He will walk to the counter at Wal-mart with a \$25 pack of t-shirts, toss it on the belt, and tell the clerk “I’ll give you \$15.” He renovates kitchens for a living. He will go to furniture stores and open with a bid at 50% of list price.

You’d be amazed at how often he gets the discounts he requests.

Did you think you couldn’t haggle at Wal-mart? Have you ever tried? If you haven’t, you’re probably not alone, and you aren’t entirely to blame. It sounds like a fairy tale because you’ve been on the receiving end of a lengthy, multifaceted agenda to make you think bargaining is scary, difficult, time consuming and futile. Let’s take a look at how outside forces, both intentionally and accidentally, have contributed to the decline of negotiation in commerce. (more…)

# Confronting our Agoraphobia, Part I: Carefully Taught

## Fear of the marketplace

“Let us never negotiate out of fear. But let us never fear to negotiate.”

— John F Kennedy

“In North America and Europe bargaining is restricted to expensive or one-of-a-kind items (automobiles, jewellery, art, real estate, trade sales of businesses) and informal sales settings such as flea markets and garage sales. In other regions of the world bargaining may be the norm even for small commercial transactions. In Indonesia and elsewhere in Asia where locals haggle for goods and services everywhere from street markets to hotels, haggling is a strong cultural tradition that even children learn from a young age.”

— Wikipedia, “Bargaining

There are some places in the world where to get a bargain means that you’ve used your market savvy to nick some of the vendors’ profit back for yourself. It’s a win in the game. In America, getting a bargain generally means the vendor had decided to lower her list price on a certain item for a short period of time. There is a “win” involved, but it’s more like winning at slots than winning at chess. You’d not believe it from looking at the crazed shoppers waiting out front of Wal-Mart on Christmas Eve, but American-style bargain hunting is a far more passive experience than it is elsewhere.

I have a hypothesis that Americans are afraid of haggling. It’s a carefully taught agoraphobia – in the true translation of the term, “fear of the marketplace.” It has a twofold basis. On one side, the dogma that only the most clever can successfully negotiate a deal. On the other, the forced separation between buyers and sellers. Transactions are automated and anonymized. The pace is quickened to limit a consumer’s ability to research actual value.

This is a pretty major topic, so I’ll be doing this as a multiple article series over the next couple of weeks. To give you an idea of where we’re headed, I’ve provided this handy timeline.

Spiffy, no?

# Chicago Real Estate Statistics: Porker’s Index

Harper’s Index has always been one of my favorite sources for trivia. I’ve nicked their format once before and it was a blast. Since Friday is the day when I count things for you it’s time I return to that format for a smattering of curious figures.

Number of true search results in Amazon’s library for:

• “How to be a good landlord”: 91
• “How to be a good homeowner”: 100
• “How to be a good tenant”: 0
• “How to be a good manager”: 2,535
Source: Amazon.com as of June 10, 2012

Number of Google search results for:

• “I hate my tenants”: 47,500
• “I love my tenants”: 118,000
• “I hate my landlord”: 985,000
• “I love my landlord”: 3,480,000
• “I hate my job”:Â 6,130,000
• “I love my job”: 29,600,000
Source: Google.com as of June 10, 2012

Number of new Chicago Craigslist postings in an hour for:

• Apartments for rent: 950
• Jobs – all categories: 26 (note: Craigslist charges to post job ads in Chicago)
• Computers for sale: 15
• Missed connections: 6
Source: chicago.craigslist.org between 6:25pm and 7:25pm on June 10, 2012

Average student loan debt for 2010 grads:

• Illinois state average for 4-year college graduates in 2010: \$23,885
• School of the Art Institute of Chicago: \$39,306
• University of Chicago \$22,359
• NEIU: \$10,976
Source: projectonstudentdebt.org

Other things you could buy for \$23,885:

• 3/4 of a year’s rent in a luxury 2 bedroom Chicago West side Loft condo (Source: ConnectMLS)
• A 2012 Ford Mustang. (Source: [1])
• 28.8 Top end Ipads with Cell service. (Source: apple.com)
• 31.4% of one year of an average Chicago public school teacher’s salary (Source: [2])
• 55.4% of one year of an average rookie Chicago cop’s salary (Source: [3])
• 871 shares of Facebook stock today.
• 42 shares of Google stock today.
• 19% of a single share of Berkshire Hathaway stock today.
Stock sources: Google Finance

Average list price per square foot per month for:

• Lakeview 2 bedroom rental (assuming 700 sq ft per 2 bed): \$3.27
• Lakeview 2 bedroom condo purchase distributed over 30 years: \$1.30
• Lakeview storefront rental up to 700 sq ft: \$1.83
Source: ConnectMLS

US National Interest rate averages as of mid-June 2012:

• 36 month new car loan 3.44%
• Standard 30 yr Fixed Mortgage: 4.21%
• Stafford student loan: 6.8%
• PLUS student loan: 8.5%
• Average Business credit card w/o “rewards” APR: 13.13%
• Average “Student” credit card APR: 13.16%
• Target Credit Card: 25.24%
• Chicago payday loan, repaid in 2 weeks: 405%
Sources: (Bankrate.com, [4], [5], [6])

Base Rent rates for interesting commercial spaces:

• 7500 sq ft of storefront space on Division in Wicker Park: \$23750/mo
• 8000 sq ft next to Circuit Nightclub on North Halsted: \$13000/mo
• 2400 sq ft former 7-11 with parking lot in Lincoln Square: \$4800/mo
• 6250 sq ft dog care facility w. equipment on Western in Roscoe Village: \$3500/mo
• 5000 sq ft church in Austin for Sunday afternoons and one weeknight: \$1500/mo
Source (Loopnet)

# “Affordable.”

I guess we all get a little nervous when new people move to town.

So this is a practical shelter blog, which means that I’ll be talking about affordable housing quite a bit going forward. People tend to get all up in arms about affordable housing and write me off as some kind of left wing crystal-gripping-mantra-chanting hippie when I use that term so I wanted to take a moment to talk about what it actually means.

“Affordable” does not mean low-income housing. “Affordable” does not mean Section 8 housing. It doesn’t even mean “crappy low-rent vintage housing with leaking windows and creaky porches.” When I talk about affordable housing – in particular, affordable rents – I am talking about housing that costs less than 30% of the average person’s gross income.

So let’s say that you’re earning under \$35k per year. That’s a little above the median income for Chicago rental households. According to a 2011 survey by the Depaul Institute of Housing Studies and a recent study from early 2012 from the National Housing Conference, 75-80% of you guys are paying more than is considered affordable. 24% of you are paying more than half of your income in rent.  This does not make it cool or okay to do so. In fact, I’d go so far as to say that you guys are holding us back economically.  (more…)

# Hype Dodger: You Do Not Live in Chicago

It's down! It's up! It's down! It doesn't matter!

Any statistics that claim to speak for the entirety of Chicago are full of crap.

Any statistics that look at only the downtown area of Chicago are full of crap.

Any statistics stating that the Chicago real estate market is collectively going up, down, sideways or falling into the lake should be collectively and summarily ignored.

## Big City, Itty Bitty Pieces

To paraphrase Douglas Adams for a moment, Chicago is big. You just won’t believe how vastly, hugely, mind-bogglingly big it is. I mean, you may think it’s a long commute to work in your current city, but that’s just peanuts to Chicago.

As the wonderful “Manhattan Elsewhere” map shows, most of Manhattan would fit between Armitage and I-55. Chicago has three “sides,” 77 community areas, 85 zip codes, and over 200 neighborhoods. Each neighborhood has its own downtown area, cultural identity, school districts, parking demands, peak traffic times, dominant gangs and rent/own ratios.

The rent vs buy scenario immediately surrounding North Park University will be very different from what you’ll find right next to the top-rated Edison School for the Gifted just a few blocks away. Distressed properties will appear at higher rates in communities where language barriers made first-time buyers more susceptible to predatory lending practices. Or where dominant cultural traditions left families with single wage-earners more vulnerable to job loss. Or where aging populations forced estate sales in a down market. Areas full of Class B investment properties will not turn into areas full of Class A properties in any foreseeable future.

Besides, you’re going to be living in your home for over 5 years, and look at what happened to Wicker Park condos from 1998 to 2002 (pre-bubble) – sales volume increased 2.7x over and the average sale price increased 60%. As a famous fictional local once said, “Life moves pretty fast.” You, on the other hand, won’t need to move for quite a while if you buy well.

If you were looking to buy property in any small town, suburb or even a smaller city, you’d probably be looking within an area with a population of about 6500 people, and maybe one or two zip codes. It stands to reason, then, that when shopping for property in Chicago that you focus your search and stats on areas of comparable size.

## You keep using that word. I do not think it means what you think it means.

I recently had a conversation with a landlord who was despondent about the length of time it was taking him to rent his condo in West Rogers Park. “I thought this was the peak market!” he said. “Why is it taking so long?” I had to explain to him that yes, rents are up, market times are down, and number of units rented is way up. However, a “peak market” is a very subjective thing.

In West Rogers Park, average market times for rentals have gone from 82 days in 2009 to about 60 days in 2012. Just 2 miles away from my landlord friend in chic Andersonville, the average market time for an apartment has gone from 86 days in 2009 to 26 days in recent months. In both areas the rents have gone up, and in both areas the volume of rented units has more than doubled over the past 3 years. It’s indeed a “peak market” in both places, but the term means something very different depending on whether you’re north or south of Devon Avenue.

Looking at the buyers’ side, let’s tell the story of 3 condo buildings within 2 blocks of each other in Edgewater, in a buyer’s market.

6166 Sheridan is a Class B high rise with 154 units. 7 of them, all 1 beds and 2 beds, have sold for an average price of \$46,857 in the past year. The top dollar achieved was about \$55k. Prices in the past 3 months have been the lowest of the year. Almost every sale was a short or a foreclosure.

Across the street, against the lake, is 6171 Sheridan, also a Class B high rise, with 312 units. 9 of these units, (studios, 1 beds and 2 beds) have sold in the past year. The average was \$76,827 and the top dollar was about \$126k. Prices have stayed pretty consistent throughout the entire year, but again, nearly everything was a short or a foreclosure.

Two blocks inland stands the new building at 1134 Granville, which I would also define as a Class B property due to its lack of amenities. It is also technically a high rise and of comparable density to 6166 Sheridan at 160 units, all 2 beds. 21 of these have sold in the past 12 months, at an average price of \$185261. The lowest price in these units, all selling at full market prices, was \$150k.

Two blocks, three buildings, three entirely different worlds. Sometimes you need to slice and dice your stats into bite-size pieces before they become useful.

## The President and the Professors

Certain sections of Chicago have weathered the downturn quite well. I frequently need to explain to my renter clients that the high end condos for rent aren’t to be found in the immediate vicinity of the Ravenswood Metra station, as the station has kept sale prices high enough that the owners have still been able to sell at decent prices instead of turning into landlords.

On the south side, President Obama and his neighbors in Kenwood have seen a 42% drop in average sales prices for single family homes, from \$904,639 in 2006 to \$523,602 over the past year. Neighboring Hyde Park, stabilized by the presence of the University of Chicago, has seen only a 19% price drop in the same span of time, from \$841,746 to \$680,737.

NorthCenter, packed with excellent schools, has seen the average sale price on a single family home dip only 5% since the market peak in 2006, from \$851,159 to \$808,023. Market times have increased by 18% but that equates to just 19 more days. Meanwhile, in the Irving Park neighborhood immediately to the west, sale prices on single family homes fallen off by 40%, from \$494046 to \$296916, and market times have increased by 70%, or 63 days, in the same timeframe.

The takeaway from today should be a small amount of awareness of how generic stats about Chicago and the real estate industry in general can be incredibly misleading. Between the news and the real estate media wonks, the public is besieged by marketers with known conflicts of interest trying to alternately push them towards panic or purchases by clever use of statistics. While stats have their place, extremely fine-grain knowledge of the city’s neighborhoods is required before they can be successfully interpreted.

So, please: do not base your decision to buy a home on the citywide stats, and certainly don’t base them on any national stats. Even my divisions of Downtown, Name Brand Neighborhoods and Generic Neighborhoods are meant only as surface benchmarks. After all, you’re not buying in Chicago. You’re buying in a very small section of Chicago with a cultural identity all its own. Please treat your new community with the respect it deserves.

Oh, and by the way, if you want me to get you more fine-grain stats for any piece I write, feel free to request them in the comments!

Cover image by Darrell Huff, courtesy of Amazon.com

# Chicago Real Estate Stats: Dorm vs Buy for Chicago Colleges & Universities

A friend of my mother’s has a son who will be attending Lake Forest College in the fall. (Congrats!) She asked via my mother’s Facebook profile whether it would be better for her to board her son in the dorms, with the mandatory bundled meal plan, or to rent an apartment or buy a condo nearby for the duration of his 4 year stay. It seemed like a question that lots of parents would have so I’ve done an analysis not only for Lake Forest College but for 9 other Chicago area colleges and universities as well. (more…)

# Occupy Everything: Breaking Down the Culture of Renting

Someone told me that people like top 10 lists as blog entries. I’ve been writing one for next Monday on things that people used to buy, but now rent instead. Writing the list has made me feel like something of a stodgy relic, thinking nostalgically about the old days… y’know, 5 years ago. Society has definitely shifted away from ownership and towards a culture where borrowing is more the norm.

The most telling shift is seen in Wikipedia’s historical definitions of the American Dream. Originally the concept referred to the low cost to buy farmland in the US. Now it is a “dream” of an equal chance for all to achieve success and prosperity. Success and prosperity are extremely subjective things, and even within that entry there’s some conflict over what indicates that one has succeeded and/or prospered. Is it a chance for equal education and a good job? If so, it’s got very little bearing on material items. However, in that same entry they state: “[h]ome ownership is sometimes used as a proxy for achieving the promised prosperity; ownership has been a status symbol separating the middle classes from the poor.” Personally, I would say that this is no longer true – rather, it now separates the upper class from the middle class, or it’s certainly heading that way. After all, the top 15 private landowners in the world are all either heirs, royalty or Ted Turner. (more…)