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Residential construction starts have cratered in Chicago
Coronavirus crisis led to a 35% drop in new resi projects from January through May
The coronavirus crisis has sent residential construction starts cratering as Chicago developers have held off on breaking ground.
From January through May, residential new construction was down 35 percent compared to the same period in 2019, according to Crain’s, citing the latest numbers from research firm Dodge Data & Analytics. Over the first five months of the year, residential construction starts totaled $1.55 billion compared to about $2.4 billion in 2019.
Nonresidential construction was not as affected, tallying $2.63 billion from January through May, just a 2 percent dip compared to last year, according to the data.
Overall, that meant Chicago’s $4.18 billion in construction starts from January through May represented an 18 percent falloff year-over-year.
Across the country, construction starts dipped 12 percent through May 31, compared to the same period in 2019, according to Dodge Data cited by Crain’s.
Last month, the city saw a 42 percent drop in total construction starts. Just $1.1 billion of new residential and nonresidential construction was begun in May, down from about $1.9 billion in May 2019.
Development in Chicago had been riding high in recent years, with massive projects rising and other enormous developments like Sterling Bay’s Lincoln Yards and Related Midwest’s The 78 getting the go-ahead. Chicago’s top five general contracting firms were approved to build over 9 million square feet of new development between June 2018 and May 2019, according to a Real Deal ranking last year of the city’s most active general contractors.
While Gov. J.B. Pritzker has allowed construction to continue statewide throughout the pandemic, financing those developments has proven far more difficult, with lenders tapping the brakes on deals and some developers also choosing to delay work.
But experts say the virus will only push back those projects, most of which will start work in the coming months. Ron DeVries of Integra Realty Resources told Crain’s he expects just 1,800 new apartments will be built in downtown Chicago next year, compared to his original estimate of 3,000. Because of coronavirus-related delays, he upped his estimate for 2022 to 4,800 new units coming online. [Crain’s] — Alexi Friedman