REO-to-Rental

Housing analysts have been giddy for the past year about the comeback of their industry, whose collapse led to the Great Recession. 2012 ended up being the third worst year for housing ever, but still beat 2011 and 2010. New and existing home sales, housing starts, and prices jumped in 2012; Countless experts expect an even stronger recovery for 2013.

I imagine people are excited because a major housing rebound typically leads to a broader economic recovery. The logic is as more people put equity into their homes, they experience a psychological effect causing them to feel more free to spend disposable income, increasing economic activity - a phenomenon known as the “wealth effect.”
 
Can bullish expectations for housing actually simulate a long-awaited recovery to Main Street? The more I think about it, the clearer it becomes that it’s not being driven by the typical American families who lost their homes in the economic crash. In fact, it’s being fueled by the banks, private equity firms, and hedge funds whose powerful speculation caused that crash in the first place.

Currently, one of the hottest trends in the financial sector is known as “REO-to-rental.” Over the past couple years, hedge funds, private equity firms, and the biggest banks have raised massive amounts of capital to buy distressed or foreclosed single-family homes, in bulk, and at bargain prices.

According to a recent JPMorgan Chase report, the top ten most active REO-to-rental investment firms have already collectively raised enough capital to purchase 15% of all bank-owned homes.  Blackstone is spending over $100 million a week on buying homes.

The strategy involves fixing up, or "rehabbing," distressed houses to rental standard, then renting them out usually for a duration of 3-8 years. By converting distressed properties into strong, steady cash flows for a few years before reselling them, part of this investment strategy essentially entails a macroeconomic bet that prices will significantly appreciate in the nearby future.

Most firms are scooping up properties in the hardest-hit areas, promising high returns from rental revenue streams, usually at least 10% percent annually. It’s the next Wall Street gold rush, with warning signs of a renewed speculative bubble.

-MEHYAR AFKARI

Columbus Park

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Visit our Tour Destination: Illinois page to see the entire tour of the state’s
Save America’s Treasures sites.

The circle ring at Columbus Park, designed by landscape architect Jens Jensen.
© James Iska

Columbus Park

500 South Central Avenue

Chicago, IL

Website:  Chicago Park District – Columbus Park

Columbus Park:  The Prairie Idealized

The Treasure:  Celebrated landscape architect Jens Jensen considered this 135-acre park to be his finest achievement.

Accessibility:  Columbus Park is open from 6 a.m. to 11 p.m. on weekdays and 8 a.m. to 9 p.m. on weekends.

Background:  “You cannot put a French garden or an English garden or a German or an Italian garden in America and have it express America…  Nor can you transpose a Floridaor Iowa garden to Californiaand have it feel true, or a New England garden to Maine.  Each type of landscape must have its own individual expression.”

                                                Jens Jensen (1860-1951)

                                                Quoted in the Saturday Evening Post,

March 8, 1930

The children's shelter in the playground area
at Columbus Park.  © James Iska

One of only a few urban parks listed in its entirety as a National Historic Landmark, Columbus Park is Jens Jensen’s iconic Chicago park.  Nearly all the groundbreaking ideas that Jensen pioneered were integrated into the landscape design that Jensen realized in this park on the western side of the city.  In Columbus Park, he incorporated native plants, molded existing features of the landscape to heighten their effects, celebrated American ideals of democracy and community, and provided opportunities for recreation, relaxation, and even spirituality for city dwellers.  Jensen had a larger canvas to work with than usual (144 acres in its original conception) and he took full advantage of the opportunities presented.

Originally farmland, the property was acquired by Chicago’s West Park Commission with the intention of creating a major park to serve Chicago’s fast-growing west side.  Jensen was the biggest name in the region when it came to landscape architecture, having served as West Park Commission General Superintendent and Chief Landscape Architect and then moved on to acclaimed work in private practice.  He was a man ahead of his time, with a very distinctive vision of the future of American landscape architecture.

The creation of Columbus Park was a five-year project running from 1915 through 1920.  In designing the park, Jensen carefully studied the existing landscape to build upon its natural attributes.  He placed a nine-hole golf course and other athletic fields within a relatively flat expanse that was to recall the native prairies.  Along the outskirts, he planted small groves of native trees and vegetation.  Inspired by traces of ancient sand dunes, he introduced an artificial prairie river, two attractive waterfalls, and two brooks.  Jensen incorporated a children’s playground area, a wading pool, an outdoor theater, and one of his most distinctive elements—a council ring where local folk could gather for talk and entertainment.

The council ring before restoration.
Photo courtesy of
Chicago Park District

By its nature, landscape architecture is difficult to preserve.  This has been particularly true for Columbus Park which was significantly changed by the construction of the Eisenhower Expressway in the 1950s which lopped off some southern acreage and led to rearrangement of the athletic facilities.  The 2002 Save America’s Treasures grant offered a rallying point for renewal, meshing nicely with other city and neighborhood initiatives.  Save America’s Treasures work focused upon the restoration of the historic children’s playground area, the brooks and the paths around them, and the council ring.

The council ring after restoration.  © James Iska

Historic photo of the wading pool at Columbus Park.
Photo courtesy of  Chicago Park District Special Collections.

Notes from the Editor:  With nearly 100 blog entries to date, this is the first time that Tour America’s Treasures has focused on the same artist twice.  Find more information on Jens Jensen in our entry on Jens Jensen Park in Highland Park, Illinois.

Other Recommended Sites:  Pay further Other examples of Jens Jensen’s landscape design can be appreciated at the Chicago Park District’s Humboldt Park, Garfield Park, and Douglas Park, as well as Lincoln Memorial Garden in Springfield, Illinois.

Pay further respect to the visionary genius of Jens Jensen by visiting Forest Preserve District of Cook County and the Indiana Dunes State Park and National Lakeshore.  A deeply committed conservationist, Jensen was a potent force in organizing for the preservation of natural landscapes like these in the early years of the conservation movement.

Historic photo of one of the waterfalls at Columbus Park.
Photo courtesy of Chicago Park District Special Collections.

Tour America's Treasures Itinerary

Monday’s destination:  Fountain of Time

© 2013 Lee Price

Our New Website!

Visit our new website to learn about us and check future events!

http://nyufinancesociety.com

Chicago Urban League Records

View Chicago Urban League Records in a larger map

Visit our Tour Destination: Illinois page to see the entire tour of the state’s
Save America’s Treasures sites.

Children on the staircase of the Chicago Urban League headquarters,
4500 South Michigan Avenue (at Grand Boulevard).
Photo 74, Chicago Urban League Records, University of Illinois at Chicago Library.

Chicago Urban League Records

Richard J. Daley Library

Special Collections and University Archives Department

University of Illinois at Chicago

801 South Morgan Street

Chicago, IL 61301

Website:  Chicago Urban League Records

The Treasure:  The vast files of the Chicago Urban League, serving African Americans in Chicago since 1916, depict a city on the forefront of powerful social and cultural movements.

Accessibility:  The library is open daily, but you can access a great deal of information and images without even leaving your computer.  The finding aid for the full Chicago Urban League collection is here.  Go to the Chicago Urban League Photo page and select Browse Collection on the left to view 255 digitized images from the collection.  And there’s a fascinating online exhibit, “Fight School Segregation,”that showcases documents from the records of the Chicago Urban League.

Background:  Background:  The demographics of Chicagochanged fast in the early years of the 20th century.  In a movement often called the Great Migration, African Americans traveled from the South to Chicago in search of expanded economic opportunities and a better life.  The Chicago Urban League formed in 1916, just as this migration began in earnest.  Word quickly spread through the South that Chicago’s industries were hiring to meet new World War I demands for manufactured goods.  The black population of Chicagorapidly expanded, establishing a new culture within the city that reflected many southern and rural traditions. The Chicago Urban League worked with organizations like Travelers’ Aid societies to welcome the new arrivals and offer advice and resources.  From November 1917 to October 1918, nearly 21,000 people came to the Chicago Urban League’s Bureau of Advice and Information, most of them looking for help with housing and jobs.

Black Power movement at the Chicago Freedom Movement
Rally, Soldier Field (Freedom Sunday), July 10, 1966.
Photo 54, Chicago Urban League Records,
University of Illinois at Chicago Library.

Preserved through a 2005 Save America’s Treasures grant, the records of the Chicago Urban League tell the story of the institution from its founding to the very recent past. The records reflect a volatile city and society in constant transformation.  From the early days, the Chicago Urban League worked closed with the University of Chicago’s School of Sociology to document and study urban change as it occurred, as well as to identify and develop solutions to emerging problems.

It was a turbulent century and Chicago was frequently at the center of things.  The Chicago Urban League records cover the brutal five days of race riots in July 1919, the toll of the depression upon the city, the emergence of the civil rights movement in the 1950s, and the ongoing struggles for economic empowerment.

Under the care of the Richard J. Daley Library at the University of Illinoisat Chicago, the collection includes correspondence, research papers, photographs, artifacts, and news clippings, originally brought to the library in about 400 cartons.  All of the history is valuable, but the black and white photographs are particularly inspiring. Browse through the 255 digital imageson the library’s website to get a feel for black Chicago in the mid-20th century, as community members fought for full equality, forged new political connections, and endeavored to make a better life in the city.

Martin Luther King, Jr. speaks from a car.
Photo 168, Chicago Urban League Records,
University of Illinois at Chicago Library.

Alley clean up.
Photo 14, Chicago Urban League Records,
University of Illinois at Chicago Library.

Chicago Urban League volunteer Glenn Harston distributes
Membership Campaign worker's kits at First National Bank, April 19, 1974.
From left: Rev. Lucretia Smith, Third Vice President of the Council
of Religious Leaders; Veronica Fickling; Willie Pittman;
William O. Stewart; and Maude Tancil.
Photo 94, Chicago Urban League Records,
University of Illinois at Chicago Library.

Other Recommended Sites:  Chicagois home to the DuSable Museum of African American History, the first and oldest museum in the country dedicated to the study and preservation of African American history, culture, and art.

To Be Equal by Whitney M. Young, published in 1964.
Photo 225, Chicago Urban League Records,
University of Illinois at Chicago Library.

Tour America's Treasures Itinerary

Tuesday’s destination:  Columbus Park

© 2013 Lee Price

Finance Society Spring Kickoff

Hegeler Carus Mansion

View Hegeler Carus Mansion in a larger map

Visit our Tour Destination: Illinois page to see the entire tour of the state’s
Save America’s Treasures sites.

East side of the Hegeler Carus Mansion at sunrise.
Photo by Joe Balynas, courtesy of the Hegeler Carus Foundation.

Hegeler Carus Mansion

1307 Seventh Street

La Salle, IL 61301

Website:  Hegeler Carus Foundation

The Treasure:   A 19th century architectural gem by architect William W. Boyington, the Hegeler Carus Mansion additionally offers a rare opportunity to see a well-preserved and authentic High Victorian interior.

Accessibility:  The Hegeler Carus Mansion is open year-round, with tours offered Wednesday through Sunday at noon, 1 p.m., 2 p.m., and 3 p.m.

Background:  Virtually unaltered since its completion more than a century ago, the Hegeler Carus Mansion is at once a family home, an example of high artistic achievement in architecture and interior design, and the site of historic accomplishments in industry, philosophy, publishing, and religion. Visitors today experience the grandeur of a bygone era and the heritage of a fascinating family whose history is woven tightly with that of the IllinoisValley and the United States. Operating on the ground floor of the Mansion for many decades, the Open Court Publishing Company—a scholarly press under the leadership of Dr. Paul Carus—published cutting-edge material promoting interfaith dialogue and philosophical discussion for an international audience.

Historic photo of the Hegeler Carus Mansion.
Photo courtesy of the Hegeler Carus Foundation.

Architect William W. Boyington designed the Hegeler Carus Mansionin 1874. It is recognized as an authoritative architectural statement of the Second Empire style, as indicated by the steeply sloped, or mansard roof; dormer windows; molded cornices; decorative brackets; and the tower crowned by a 30-foot cupola. Known for his neo-Gothic style, Boyington arrived in Chicagoin 1853 and immediately began designing a wide variety of structures, including homes, opera houses, hotels, and churches in that growing metropolis. Because they survived the Chicago Fire of 1871, the Chicago Water Tower and Pumping Station are the most famous of his Chicagostructures.

The Hegeler Carus Mansionis also one of the most intact examples of interior designer August Fiedler’s work. It is rare to have an intact interior in buildings as old as the Mansion. Typically, a building would be built and then decorated. As times and tastes changed, residents would paint over or entirely replace the original décor. Therefore, the work of the interior designer—in terms of colors and decoration—would last only as long as the first decorative scheme. There are few places where home owners have not only recognized the intrinsic quality and value of a home’s original décor, but also possessed the foresight to preserve it for the enjoyment of future generations, as was done with the Hegeler Carus Mansion. The result is a rare glimpse into the original conception of a unity of architecture with interior decoration, created as an ensemble.

The Save America's Treasures grant provided the
opportunity to restore the Mansion's Reception Room to
its former magnificence after suffering water damage,
nearly destroying the west ceiling and flooring.
The west ceiling was plastered and then repainted using
stencils of the intact east ceiling as well as the interior
designer's original drawings.  A local flooring specialist
replaced the west portion of the parquet floor.
Photo by Amanda Whitlock, courtesy of the
Hegeler Carus Foundation. 

In addition, it is exceptionally rare to have the original design renderings of the interiors, including not only ceiling and floor designs but furniture and carpets as well. The interiors of the Mansion do indeed still match the drawings.

A recipient of National Historic Landmark status and on the National Register of Historic Places, the Hegeler Carus Mansion remains a testament to the talent, vision, and skill of both W.W. Boyington and August Fiedler.

Notes from the Editor:  A huge thank you to Heather B.P. Wallace, Executive Secretary at the Hegeler Carus Foundation, for preparing the above background section! The material that she sent me matched the style of Tour America’s Treasures so closely that I simply had to drop it in. That doesn’t happen very often, and it’s truly appreciated!

Other Recommended Sites:  Here’s a useful link to the museums, parks, and historic sites of LaSalle County, Illinois. Naturally, the Hegeler Carus Mansion is at the top of the list, but there’s plenty else to visit in the county, too. There’s the Reddick Mansion, a 22-room Italianate mansion built in 1858; a canal boat tour; the Weber House and Garden; and much more.

Historic photo of the Hegeler Carus Mansion with children playing in the yard.
Photo courtesy of the Hegeler Carus Foundation.

Tour America's Treasures Itinerary

Thursday’s destination:  Chicago Urban League Records

© 2013 Lee Price

Cahokia Mounds

View Cahokia Mounds State Historic Site in a larger map

Visit our Tour Destination: Illinois page to see the entire tour of the state’s
Save America’s Treasures sites.

Aerial view of Monks Mound, the largest of the huge earthen mounds
at Cahokia Mounds State Historic Site.
Photo courtesy of Cahokia Mounds State Historic Site.

Cahokia Mounds State Historic Site

30 Ramey Street

Collinsville, IL

Please note that Cahokia Mounds is not in the city of Cahokia.  It is located in Collinsville.

Website:  Cahokia Mounds State Historic Site

The Treasure:  By studying the enormous earth mounds and their associated artifacts, archaeologists are slowly unraveling the story of a great pre-Columbian urban complex that existed in the heartland of the North American continent.

Accessibility:  During the peak summer season, Cahokia Mounds is open daily from 9 to 5. Check the website for winter hours (generally closed Monday and Tuesday).

Archaeological dig at Cahokia Mounds.
Photo courtesy of Cahokia Mounds State Historic Site.

Background:  Places like Cahokia Mounds remind us how little we comprehend about pre-Columbian America. Thanks to the patient work of archaeologists, we know that a great urban center existed at Cahokia one thousand years ago, serving a powerful and complex culture. But how many lay people have incorporated an image of the teeming urban life of Cahokia into our stock mental images of Native American life in North America? I know I struggle to do this.

To begin to grasp the achievement of the Native Americans who built Cahokia Mounds, first climb the 156 steps of Monks Mound to survey the vast flat floodplain of the nearby Mississippi River. It’s a view that could either suggest awesome political power or a spirituality of the land, but which impulse served as the primary original impetus for building these vast mounds of earth remains stubbornly unknown. Nearly one thousand years ago (the heyday of Cahokia was 1050 to about 1300 A.D.), some bold and powerful catalyst (a leader? an event? an idea?) must have sparked here. But without a written record, or even a clearly passed-down oral tradition, the nature of Cahokia’s origin remains mysterious.

Magnificent murals in the Cahokia Interpretive Center can help visitors imagine how this urban center might have looked centuries ago. The entrance mural by artist L.K. Townsend provides a breathtaking look at the central area, circa 1100 A.D., as seen from a top-of-a-mound perspective. The imposing Monks Mound is in the distance with the Grand Plaza in the foreground. Hundreds of thatched houses form the periphery, with an large stockade fence enclosing the city proper.

Cahokia Interpretive Center's entrance mural by L. K. Townsend.
Image courtesy Cahokia Mounds State Historic Site.

To help with orientation, here’s an overhead map/image of the Cahokia Mounds settlement, prepared by Bill Iseminger and Mark Esarey with artwork by Greg Harlin:

Overhead view of the Cahokia Mounds settlement by Bill Iseminger.
Image courtesy Cahokia Mounds State Historic Site.

And now we move in for a closer look at community life at Cahokia, via the art of Michael Hampshire:

Mural by Michael Hampshire of community life at Cahokia Mounds.
Image courtesy Cahokia Mounds State Historic Site.

And a Cahokia market scene, also by Michael Hampshire:

Mural by Michael Hampshire of a Cahokia market scene.
Image courtesy Cahokia Mounds State Historic Site.

For a large and thriving culture, this was life in the American Midwest, 400 years before Columbus.

Other Recommended Sites:  Just ten miles northwest of Cahokia Mounds, the Lewis and Clark State Historic Site marks the official starting point of the Lewis and Clark Expedition. There’s a visitor center with six galleries of exhibitions. In the other direction, ten miles southwest of Cahokia Mounds, the Cahokia Courthouse dates back to 1740 and is the oldest surviving courthouse in Illinois.

Pottery exhibit at the Cahokia Interpretive Center.
Photo courtesy of the Cahokia Mounds State Historic Site.

Tour America's Treasures Itinerary

Thursday’s destination:  Hegeler Carus Mansion

© 2013 Lee Price