Development drain? More local firms seek projects outside Chicago

Property tax increases and the push for more affordable housing are among reasons leading developers like Sterling Bay and Magellan into other markets

Chicago /
Jan.January 02, 2020 01:00 PM
Property tax increases and other factors are encouraging hometown developers to seek projects in markets outside of Chicago (Credit: iStock)

Property tax increases and other factors are encouraging hometown developers to seek projects in markets outside of Chicago (Credit: iStock)

Some prominent Chicago developers are setting their sights and sites on other markets in 2020, concerned over rising property taxes and the push for more affordable housing.

Firms like Magellan Development and Sterling Bay are pursuing investments in places like Los Angeles, Miami, Atlanta, Dever, Austin, Dallas and Nashville, according to the Chicago Tribune.

Lincoln Yards developer Sterling Bay is working on projects in Miami and in Portland, Oregon.

Developers cited Chicago’s affordable housing requirements, the push for rent control and Mayor Lori Lightfoot’s plan to reform tax increment financing among the reasons for their eyeing other cities, the Tribune reported.

Cook County Assessor Fritz Kaegi has also boosted the assessed value on properties in Chicago suburbs, and assessments for Chicago are expected in 2021.

Big developers often have projects in different cities, but a pullback in investment in Chicago could affect home values and the employment rate, among other things.

“We love Chicago but are super nervous about the headwinds Chicago faces,” Magellan CEO David Carlins told the Tribune. The firm is building Vista Tower, set to be the city’s third-tallest skyscraper. [Tribune] — Brianna Kelly


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