The saying goes that there are two seasons in Chicago: winter and construction. But this year, builders say, the pace of construction has picked up even through the winter months.
“Business is booming these days,” said Yarek Sakowicz, a cabinet-maker. He has seen a 50 percent increase in projects since January 2012.
Sakowicz says a lot of his business comes from individuals wanting to remodel their homes. The Bureau of Labor Statistics reported that in January, construction was one of the largest growing industry sectors with an increase of 28,000 jobs. Overall, construction has grown by 296,000 since the January 2011 low.
Mark Vitner, senior economist at Wells-Fargo, agreed the latest employment report showed a “budding recovery in the residential sector” in an otherwise “steady-as-she-goes” job market.
Chicagoans involved in housing-related construction say they’re seeing the recovery gain momentum.
“The apartment market has grown exponentially in Chicago for the last 12 months,” said Michael Meagher, senior vice president at James McHugh Construction Co., a local builder with four major projects underway in downtown Chicago.
Brian Gordon, senior vice president at Magellan Development Group, echoed Meagher’s comments: “Right now, multi-family or apartment rentals are the hottest.” Since loans for condos are almost impossible for many potential buyers to get and the mortgage restrictions are tight, investors are looking for apartment buildings because they offer desired flexibility, Gordon said.
This generation wants the transience of apartment living but the added quality of a condo. So McHugh and Magellan have focused on building higher-end apartments.
“They’ve got pools, granite countertops, spas—they are just nicer places to live,” Meagher said. Sakowicz agrees that, for clients, the craft involved in his cabinet making is an important aspect: “They really want to see that it’s done well.”
Renters are also keenly interested in energy efficient apartments. However, Meagher says retrofitting is often more expensive than rebuilding. Closer to downtown, his company has been tearing down parking garages and clearing vacant lots for new multi-family housing.
Gordon says construction often includes new opportunities for retail and service industries. Magellan is a big proponent of multi-purpose property alongside the apartment complexes. “Right now hotels are doing very well in Chicago, so that’s where our focus is.”
At the same time, retail is growing alongside construction. Bloomberg reported that plans a 14 percent increase in seasonal hiring. In January, the “private service provider industry” grew by 91,051 jobs nationally. This industry includes retail trade, wholesale trade, healthcare and restaurant services.