Mike Glasser | RPBG President
In the late ‘60s, before it was common for middle-income families to travel long distances for vacations, my parents and their friends would gather (often over their Saturday night Bridge Club dinners) and discuss their upcoming vacation plans.
Said one family: “We are going to a resort in Indiana.”
Another family opted in: “We hear that Michigan has some great spots. We are going there.”
Not to be outdone, another family chimed that they were visiting Ohio.
I have been recently reminded about these discussions my parents had with their friends during a few meetings I had with a few of my real estate colleagues.
During these discussions, we cover issues that many of us deal with owning and managing our local real estate holdings.
We cover a wide array of topics, mostly centering on our frustrations doing business in Chicago and in Cook County.
At times, we might focus on the amount of time it takes for the County Sheriff to process orders for possession and confusing processes for implementing them.
Other times, we lament huge increases in fees – for instance, water and sewer rates that have spiked in recent years.
We discuss the Residential Landlord and Tenant Ordinance (RLTO) which, among other things, puts property owners at risk of being held liable for triple damages and attorney’s fees for not strictly complying with its requirements, and which gives judges no discretion when issuing severe penalties for even the slightest mistake.
Complaints abound about our property tax assessments, and the insanity of the tax appeal process where we end up paying our tax lawyers a substantial portion of the ‘savings’ we incur challenging sky high assessment increases. (Why not get it “more right” the first time?)
We are confused when, on the one hand, we are told that we must carefully screen our tenants and then later told that it might be inappropriate to consider a tenant’s criminal background.
We also see more and more instances where judges seal eviction cases, preventing landlords from knowing if a tenant faced eviction, and state wide legislation possibly gaining steam mandating automatic sealing of evictions during the first 30 days after filing.
Now, the latest: a growing clamor among tenant advocates and certain politicians for the state to lift a ban prohibiting municipalities from instituting rent control. If this were to pass, Chicago politicians would come under intense pressure to interfere with the vibrant and effective free market that is currently in place, and that efficiently sets rents. Under rent control, landlords would likely be prohibited from looking to the marketplace to establish rents, instead being instructed by governmental bodies how much to charge for their apartments.
Often at the same gatherings where I hear my colleagues lament the above, they discuss their latest apartment acquisitions.
“I just bought 84 apartments in Indiana,” says one.
“I just bought an apartment community in Michigan,” says another.
“We are pursuing a portfolio of units in Ohio,” says a third.
No ‘fake news’ here. My colleagues are acquiring apartment units in these other states, and all are expressing their pleasure at how much easier it is for them to do business outside of Chicago and Cook County.
As much as some of the taxes may be needed to cover city, county and state budgetary needs, and despite the progressive nature and noble intentions behind some of the proposed legislation, the cumulative impact can and will impose dire consequences on the public at large.
My prediction? If the City and County continue squeezing those of us who make a voluntary choice to invest in our own neighborhoods and communities, we will soon see more of these providers of housing choose to invest elsewhere.
No offense to the great states of Indiana, Michigan and Ohio, but I would prefer to see investment dollars and our professional expertise in owning and managing properties remain right here.