CityPads Chicago plans a 136 unit apartment building near the intersection of North and Clybourn Avenues which will be pushed to create essential affordable housing for people of moderate means. The building will be located at 1523 N. Fremont St, less than a block from the busy crossroads on the Near North Side.
The project will include:
- 4 story building
- 500 square feet average size of apartments
- Studio, one bedroom and two bedroom units
- Total of 136 Units
Crain's Chicago Business states that the rents will be affordable for people who earn 60% to 140% of the area median income according to CityPads' Principal and Managing Partner Andy Ahitow.
"The concept is to create housing for people who are working in the area. It's desperately needed. People call it the missing middle. Not enough developers are building apartments that average people can afford."
CityPads' Principal & Managing Partner | Andy Ahitow
These types of essential housing focus on the middle of the market and CityPads is also developing a 120 unit building called Tapestry Station in Evanston that is expected to open at the end of next year. In Edgewater, CityPads completed a 105 unit project called Edge on Broadway in 2020.
The development site is a few steps north of a $250 million apartment project that Structured Development is building on the former site of the Big Deahl studios.
Even though CityPads' projects are affordable to middle income renters, they are actually more profitable than a typical high-end apartment development. Due to the fact that these units are smaller, CityPads can collect a higher rent per-square-foot overall, even if its rent per unit are lower. Renting more units at lower prices can generate more revenue than fewer units at higher prices.
According to the zoning application, by complying to affordable housing rules, CityPads plans to set aside 20% of the apartments in its project, or 27 units, as affordable to tenants who earn 60% of the area median income on average. That would be $43,800 annually for a one-person household and $102,200 for the 140% of the area median income.
Construction is expected to be completed by late 2024. The firm will finance its pre-construction costs through a $10 million general partner fund that was recently raised according to Ahitow. CityPads also plans to use money from the fund to expand to the Los Angeles market.
Before any construction begins, they will still need the zoning change approval from the City Council and must also secure construction financing to pay for it. Rising interest rates and volatile financial markets are making it more difficult to obtain equity and debt financing for multifamily projects.
