Henry Grabar wrote an article for Slate titled How Condo Buildings End: Aggressive developers looking for a way in—or desperate homeowners looking for a way out (August 4, 2015).
« Bertrand Goldberg’s famous River City complex in Chicago looks like nothing so much as an old bus operator’s coin dispenser, glass windows stacked inside its joined concrete cylinders… In 2001, one cycle of gentrification later and at the start of a massive run-up in the Chicago housing market, the concrete icon was converted to condos. But prices never recovered after the 2008 crash, and owners soon found themselves unable to recoup their investment and facing major maintenance bills. Investors trying to cash in on Chicago’s hot rental market swooped in. »
« Making condos is easy. Unmaking condos is hard. When River City became a “deconversion” target in 2016, Chicago required 75 percent of owners to vote for a sale. (It’s now 85 percent.) Once that happened, everyone else was compelled to sell at the agreed-upon rate. »
« Lawsuits abound, and some Chicago condo boards are starting to play defense by amending their bylaws to head off takeovers. But there’s another side to the story, in which deconversion is the only way out for condo owners stuck in deteriorating properties. In June, the collapse of Champlain Towers South in Surfside, Florida, drew attention to the challenges that confront condo boards as they assess structural damage and raise money for repairs. Maintenance bills for the Great American Condo Boom of the ’70s and ’80s are starting to come due in areas like South Florida. »
«Chicago is the nation’s capital of deconversion »
«While states like Florida, California, and Hawaii saw tons of new condo construction in the decades after the concept was established in the 1960s, Chicago saw a different kind of boom: older buildings becoming condos. Fearing rent control, facing declining profits, or saddled with obsolete prewar commercial space, landlords in Chicago raced to sell off their units in the 1970s. Yuppies and middle-class workers gobbled up these starter apartments, which provided an easy and cheap entry point to homeownership. »
« Fifty years later, those buildings are among the oldest condominiums in the country. Owners who have not kept on top of maintenance, and even some who have, sometimes find themselves facing massive repair bills. »
« Newer buyers rightly realized they’d be paying a huge assessment for a 40-year improvement that would never make its way into their resale price when they flipped in four years.»
« “The Kennelly Square deconversion should live on in the annals of condominium history as an example of what can happen when board members do not perform needed maintenance on a timely basis,” the broker Bruce Theobald, who owned a condo in the building and voted to sell, emailed to Crain’s Chicago Business.»
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