Recent events have shaped the perception, fairly or unfairly, that downtown is no longer a safe place to live or work, and it’s time for everyone—public officials, civic leaders and business execs—to come to terms with that fact.
We’ve heard the tales all summer—that Chicago’s downtown area has been damaged both literally and figuratively by the recent unrest as well as COVID. Now, thanks to reporting that’s exclusive to Crain’s, we have figures to back up what until now has mostly felt like unsubstantiated dread.
This unsettling reality is coming into sharper focus, and it’s something that should worry even those who don’t live and work downtown: The pandemic, crime and lingering concerns over the city’s and state’s financial health have combined to form a toxic triple-whammy that threatens to have a lasting impact on the economic viability of the Loop and its perimeter.
Similarly, Crain’s Alby Gallun reports in this week’s issue that apartment dwellers are also voting with their feet. The downtown apartment occupancy rate was down to 89.2 percent in the second quarter, its lowest level since 2002. Some tenants are fed up with the violence and mayhem that has resulted in boarded-up storefronts and made them uneasy. Others who now work from home due to the coronavirus pandemic are no longer willing to pay sky-high rents to live near an office that’s closed, or in a once-vibrant central business district that’s suddenly sleepy.
“The Loop’s like a ghost town,” says one renter who has decamped for his second home in Tampa, Fla.
Suburban landlords, meanwhile, are doing OK. The suburban occupancy rate has edged lower, to 95.1 percent from 95.3 percent in second-quarter 2019, Gallun reports, but the median net rent has risen 1.6 percent.
And in a troubling sign for the Chicago-area office market, less than a third of businesspeople say they’re going to need all the space they currently occupy when the COVID-19 pandemic finally passes. That’s one of the findings of the inaugural Harris Poll Chicago Executive Pulse, a survey of 200 Chicago-area business leaders conducted for Crain’s Chicago Business by the Harris Poll that’s highlighted in this week’s issue.
The survey, conducted online from Aug. 4 to 14 of owners and executives of small and midsize companies, indicates recovery from the pandemic is going slowly and may well be affected by concerns over violence and crime in the city, as well as continuing pension woes. Crime emerged highest on a question about important factors in “keeping your business located in Chicago.” Eighty-eight percent listed “public safety,” followed by the cost of doing business at 87 percent and level of taxation at 82 percent.