Census Figures Point To A Splendid Future For Downtown, Possible Troubles For The South And West Sides

Figures released last week by the U.S. Census Bureau are preliminary and more detailed data from federal officials will soon flow, but Chicago's direction is already clear.

What was once a geographically small but dense Central Business District is spreading out as gleaming residential towers occupied by affluent office workers rise on all sides. And while many of the city’s Black residents left the South and West Sides for suburban homes or migrated to Southern states, steep growth in the CBD was enough to cover the loss.

Downtown growth has been rock-steady for years, according to data from brokerage firm Luxury Living Chicago Realty, with developers adding around 23,000 new residences since 2016. That’s why CEO and founder Aaron Galvin wasn’t surprised when the first census numbers were rolled out.

“Almost all of these units, prior to the pandemic, were occupied,” he said. “When you add [thousands of] new units, you’re going to have population growth.”

But the census data is not just a snapshot in time. The trends highlighted are likely to continue, including the growth in downtown neighborhoods such as South Loop and River North — growth that resumed even before the coronavirus pandemic subsided.

“It is back at the level we saw prior to the pandemic,” Galvin said.

The census also shows a city growing more diverse, as Latino and Asian residents surge in numbers. But the loss of so many Black families, especially if subsequent data attributes the loss to a decline in working- and middle-class households, could also mean larger geographic areas with endemic poverty, poor housing infrastructure and an inadequate supply of affordable housing, even as the downtown becomes more splendid.

The Habitat Co. Senior Vice President Charlton Hamer, who runs the firm’s affordable housing group, which has developed and managed thousands of apartments throughout Chicago's South and West Sides, said the latest census data contained both the expected and unexpected.    

“I’m not surprised by the decrease in the African American population, but I am surprised by the scale of the loss,” Hamer said.  

The number of Black residents fell to 787,551 between 2010 and 2020, according to the census, a decline of 9.7%. That continues a decades-long trend. The U.S. census counted more than 1 million Black residents in 2000.

Hamer said that may be the result of reverse migration as families that arrived in Chicago from the South generations ago in search of jobs or education decide to return. He has seen evidence of this within his own extended family of aunts and cousins.

“They’ve all left. I am the child of parents of the Great Migration, who came to the North out of the South, in our case from Huntsville, Alabama," he said. "And now the kids and grandkids of that generation are leaving, and they’re primarily going back to the places they came from.”

The reasons for leaving are obvious and in the news nearly every day, Hamer added. The acute level of violence in many areas has left residents weary, as has the loss of many neighborhood schools. Those with the economic means are finding ways to leave and resettle in vibrant cities such as Nashville and Atlanta. One of Hamer’s cousins, a retired teacher, recently put her Far Southwest Side home up for sale. A hot housing market helped make the move south possible.

“It lasted two or three days on the market and got 25% more than the asking price,” Hamer said.

But Hamer added he was pleasantly surprised that even with population declines in many neighborhoods, the downtown expansion and the arrival of so many Latino and Asian residents, kept the city growing. Chicago ended up with a total population of 2,746,388, a 1.9% increase and just enough to keep it ahead of burgeoning Houston, the nation’s fourth-largest city. The Latino population grew from 778,862 to 819,518, a 5.2% boost, while the census found 189,857 Asian residents, a 31% increase since 2010.   

“I think that is a tremendous positive,” Hamer said.

“It’s not growing at the rate of an Austin, Texas, or the Bay Area, but it is still growing,” said Matthew Wilson, senior research specialist at the University of Illinois at Chicago’s Great Cities Institute.

That’s a turnaround from the 2010 census, when Chicago’s population declined by 6.9%, Wilson added. Coupled with the fact most counties in Illinois lost population while suburban collar counties were stagnant or grew slowly, the population increase illustrates the urban core should continue playing an outsized role in the state’s economy. The data also shows the coronavirus pandemic didn’t drive affluent urban residents into rural areas where they could buy cheap houses, enjoy lower taxes and work from home — a worry voiced by many in early 2020.

“That largely hasn’t happened and I don’t think it will,” Wilson said.     

Galvin said he agrees, and evidence about the CBD’s resilience has been piling up for months.

“Starting in April, there was a normalization that occurred in the multifamily market,” he said.

After a period of hibernation, vaccinated renters began signing leases and pouring into new downtown buildings, including Wolf Point East in River North. Galvin’s firm handles leasing for the new 689-unit tower, which is now 98% leased, a milestone reached in just 15 months. Many other new, Class-A multifamily properties in neighborhoods such as University Village and the Illinois Medical District on the Near West Side, as well as those along train lines in Logan Square and Bucktown on the Northwest Side, have seen similar levels of activity.

“Almost all the new inventory has been absorbed,” Galvin said. “A year ago, that was definitely not the case and that’s a testament to the strength of the market.”

Residential developers followed in the wake of the many employers that opened downtown operations. Between 2010 and 2019, the number of jobs in Chicago’s CBD jumped to 613,000, a 28% increase, according to a capital market overview by HFF, a firm later acquired by JLL.

Both office and residential developers are placing bets that the CBD growth will continue, Galvin said. More than 2M SF of new office space was recently or will soon be completed in the Fulton Market neighborhood alone. And due to 27th Ward Alderman Walter Burnett’s decision to open up a big slice of nearby land for new residential buildings, the employees who fill those buildings will be able to walk to work.

In addition, there is still a lot of other land available, including at several proposed megadevelopments such as Sterling Bay’s 53-acre Lincoln Yards site on the North Side and Related Midwest’s 62-acre The 78 site just south of downtown. There are also a lot of parking lots and other underutilized properties that could be cobbled together into multifamily sites.

“We’ve gotten to be a much denser city in the past few decades, but there is still room for growth in the downtown core,” Galvin said.

Amidst all the downtown’s success, Hamer said he hopes no one forgets the neighborhoods that lost residents.

There is already a gap between the supply and demand for affordable units, and both Chicago and Cook County slid backward in the last decade, he pointed out. DePaul University’s Institute for Housing Studies found the gap widened to about 180,000 in 2017, up from 176,000 in 2012, partly due to the loss of two- to four-unit buildings, a critical part of the affordable housing stock.

Between 2012 and 2018, Cook County lost 29,212 such rental units through demolition or conversion, a 9.8% reduction, according to IHS, which used data from the U.S. Census Bureau’s American Community Survey.

“You have a population that is already stretched and stressed in terms of affordability,” he said.

Losing more middle-income families could compound the problem, Hamer added, as grocery stores and other essential retail may no longer be able to survive without these customers.

Wilson said he worries losing such neighborhood institutions would then drive even more residents out, leaving only those who can't afford to move. That would continue another decades-long trend in Chicago, which has seen high-poverty neighborhoods expand in geographic size, even as their total populations declined.

“When does a neighborhood reach its tipping point?” he asked.

Developers need to shift from developing housing to developing communities that add stores, restaurants, banks and other services to residential buildings, Hamer said.

The first phase of Habitat’s $200M Ogden Commons development in the Douglas Park neighborhood includes 50K SF of commercial space occupied by Wintrust Bank, Sinai Health System and Jamaican restaurant Ja’ Grill, among other outlets. And its 43 Green, a transit-oriented development rising on what had been a vacant lot in the South Side neighborhood of Grand Boulevard, will eventually include three mixed-income residential buildings along with street-level retail and commercial development.

“There is a tremendous need in these neighborhoods, regardless of the racial and ethnic demographics,” Hamer said.