Chicago BY CHARLES B. CLEVELAND

The city goes condominium

IF YOU want to consider how rapidly times have changed, take the word "condominium." If you look it up in a dictionary printed 20 years ago, it is a brief notation that tells you it is a relatively obscure word covering those instances in which more than one nation controls a piece of land, usually a small nation or city-state.

Today that definition is almost forgotten, but condominium (usually abbreviated to "condo") is a third new force in the housing market, falling somewhere between renting an apartment and owning a home. Once limited to a few wealthy families in Chicago, condos are now mushrooming through-out Illinois.

According to Don DeBat, real estate editor of the Chicago Daily News, more than 50,000 Chicago area apartments have gone condominium, making Illinois the third state (behind Florida and California) in total condominiums established.

On Chicago's Near North Side alone are more than 5,600 condos, and this past summer some major city apartment buildings, including Marina City, Lake Point Tower and others have "gone condo." So many apartment buildings have been converted that there is a growing shortage of available rental units in the Chicago area.

A condominium is a hybrid form of housing. Overly simplified, it is a multi-family structure in which the tenant owns his own living quarters but shares the use (and costs) of the "common" areas such as hallways, entrance, elevators and surrounding land. It may be as simple as a row of townhouses or as complicated as a multi-story skyscraper like the Hancock building.

Its popularity is based on a number of factors. There are tax advantages in home ownership over renting. Also, in a booming real estate market, values have been skyrocketing, and a well-located condominium has gone up in value faster than the most speculative stocks.

There is the negative side too. More than one building has been converted from apartments to condominums by quick-buck operators, stranding the new tenant-owners with failing plumbing, leaking roofs and aging electrical service.

Some of the problems stem from me fact that condominiums are so new there aren't adequate laws to cover them. In the spring session of the Illinois General Assembly Sen. Jack Merlo (D., Chicago) and Rep. Arthur Telscer (R., Chicago) introduced a series of bills regulating condominiums, the first such regulations in 15 years. (The governor had not signed the bills as of Sept. 12.)

The city of Chicago, the primary source of new condos, failed to produce a new ordinance after more than a year of study, and elsewhere the whole housing concept has been without meaningful regulation and has caused problems.

For example, tenants in an apartment are usually given the first option to buy when their building is being converted. For many, this is a "move or else" situation. They were comfortable as renters but did not want to get involved in ownership. Still others, particularly elderly or retired persons on fixed incomes, may not prove good risks for the mortgage-lender, and down payments are a severe economic shock for most of us.

There are offsets, of course. Many developers say they give extra time for renters to convert. Some say the real complaints come from those who were getting by with "cheap rent." From a community standpoint, they assert the condominium owner is now a property owner and a much more responsible citizen than the renter who may move on when his lease expires.

The new condominium legislation spells out the rights of tenants and provides for longer periods for the tenant to decide whether to buy or move.

The real test of the condominium concept probably won't come from state or local laws, but by the day-to-day operations of the housing market. If you rent an apartment, you can move when your lease expires and, assuming you can find a suitable apartment, you are free to move when and where you chose. A home owner doesn't have that freedom. He (or she) has to find a person who is willing to buy the house at a price they can both agree upon. It also normally requires a third party willing to participate in the process — the bank or savings and loan which supplies the mortgage.

A condominium owner has all these concerns plus the fact he doesn't quite own his own property, and the "quite" covers a lot of territory. Basically the condo owner owns his unit, but frequently he can't sell to just anybody; his fellow condo owners can have some say, if only the right to buy it themselves. Which brings on another fundamental of condominium ownership: most owners have no direct control over costs.

Commonly, the condo owners elect a board of managers which has the power to hire and fire employees, pay bills for common expenses such as snow removal, blacktopping parking lots, painting halls, running elevators, repairing furnaces, etc. This should result in individual savings.

The condominium concept is also necessarily based on close to full occupancy of the structure and a reasonably harmonious group of owner-tenants with relatively comparable housing needs and standards. 

34 / October 1977 / Illinois Issues