A developer’s plan to build “efficiency homes” in Evanston’s 7th Ward goes before city council members Monday night.
The developer says he hopes to sell each of the dozen proposed 600-square-foot detached single family homes for around $369,000.
By comparison, the median size of 28 single family homes currently listed for sale by Zillow in Evanston is 2,854 square feet and the median listing price is $937,000.
That’s more than four times the size and two-and-a-half times the price of the proposed new efficiency homes.
The median price per square foot for the existing homes is $321 — barely over half the projected $615 price per square foot of the proposed efficiency homes.
But if a prospective buyer in Evanston wanted something around 600-square-feet in size, it simply isn’t currently available in a detached single family home at any price.
The smallest house on the the market has 980 square feet and a listing price of $350,000.
And none of the homes on the market are new construction. That smallest one is 70 years old.
David Wallach of Blue Paint Development says his new homes would be energy efficient — using a prefabricated steel wall panel system from Wally Walls another firm he owns — reducing annual operating costs for the owners.
Wallach, through a third firm he owns, Chicago Granny Flats, has built several accessory dwelling units in Chicago and Evanston.
Neighbors of the project site, at 1915-1917 Grant St., are opposed to the plans, claiming — among other things — that they are so expensive that only investors who might rent them out as Airbnb’s would be able to afford them.
The Plan Commission voted to recommend against the project and to add more hurdles to any similar projects in the future by requiring that they go through the city’s complex planned development review process.
A bad idea that just won’t die.
Evanston Resident
I continue to be confused about this housing plan: why would someone pay $369,000 for a 600-square-foot home (unless they plan to rent it)? The benefits of a detached single-family home are not so great that a buyer would choose these units over a much, much larger condo for the same price. Any research supporting this?
Hi Debra,
The developer presented a fairly detailed market study, along with a very extensive report from Ashville, North Carolina, of efforts to provide “missing middle” housing there — which would seem to suggest there is some demand.
(Caution, combined they are more than 200 pages long.)
The developer is convinced that some people in Evanston — not necessarily you or me — would find this housing option attractive.
As for the prospect of the units being rented out, the usual rubric is that an owner needs set a monthly rent of roughly 1% of the value of the property to cover costs.
If you don’t think anyone would buy such a property for $350,000, what makes you think someone else would be willing to rent it for $3,500 a month? And why would that person be a worse neighbor than the owner?
— Bill
Year built and location would also have an effect on price per square foot of a house. I am sure part of the price premium for this proposed project is attributable to those effects.
However, it is intuitive that either apartments or townhouses would be more efficient to construct, and provide relative affordability. In fact, just a block away there are townhouses on the 2000 block of Grant St.
If the owner wants to build SFD’s then I don’t see whay the City should interfere. The density is not out of line with what is in the neighborhood, and there is no request for money from the City to do the construction.
Will the high cost per sq ft be translated to larger existing homes nearby when the next tax assessment takes place? That is, are assessments based on similar houses with similar sq footage, or average price per sq ft in the neighborhood?
Hi Channahk,
Based on similar houses of similar size in the neighborhood.
For details see: https://www.cookcountyassessor.com/how-properties-are-valued
So the presence of smaller homes next door should not impact the assessment of your home — unless the presence of such homes makes potential buyers discount what they’re willing to pay for your house.
— Bill