Why is it so expensive to live in a major city? There are many variables; escalating rents, excessive licensing and permitting for small businesses, ever-escalating property taxes, and much more.
What follows is NOT journalism. It is OPINION. And that’s a bit of transparency badly needed in today’s 24-hour news cycle reporting.
But these are opinions made by observing conditions in a single major city for well over a 10-year period. I’m talking about Chicago, Illinois and my time spent living there as an independent writer, artist, and filmmaker.
Life In An Expensive City
I spent a lot of time in 2007 searching for a rental property to open an art studio in; what I learned in doing so explained a great many things about why it’s so expensive to live in cities like Chicago.
One of the first things affecting your ability to afford to live there? The amount of money you are required to pay for everyday requirements (city or state law) such as the TWO stickers you are required to carry on your car at all times; the “City Sticker” you buy from the City of Chicago, and the State-required vehicle tags.
Snow, Parking, and Towing
Another aspect of operating your car in Chicago that eventually makes it more expensive to live there? Arbitrary and randomly enforced parking laws including one that until 2020 included a “three parking strikes and you’re towed” policy.
Chicago is rife with “snow routes” that are legal to park on until there is two inches of snow on the ground. Go to bed at 11PM with no snow and wake up with four inches, and your previously legally parked car may be on its way to the impound lot.
There are no rent controls in Chicago, and rents traditionally go up in any neighborhood that is gentrifying or under development. Why do rents go up in general? A landlord’s expenses to maintain the property increasing will do it; Illinois is a state infamous for its’ ever-increasing property taxes. When the landlord’s taxes go up, your rent may go up as well.
Life in a big city prone to use property taxes “like an ATM machine” as some might put it, gets more expensive as a result.
Why do the prices keep going up in Chicago restaurants over the years? What factors make nightlife so expensive there, too? The previously mentioned property tax issue is one part of that equation, but consider what a friend of mine, who ran a small business in a well-to-do neighborhood explained to me about how he passed his fire inspection.
This small business operator was inspected one day and informed that he was missing the correct placement of his fire extinguisher and an exit sign. He was ALSO told that he could pass his NEXT inspection. He was ALSO told that a contribution to an inspector’s retirement fund would make sure that happened.
In another case, someone I knew had a sister running a restaurant that was quickly gaining popularity in the area; her health inspector attempted to tie a passing grade on the inspection with the purchase of multi-level marketing merchandise.
City and state corruption are another contributing factor in the ever-increasing expenses of doing business and working in a major city like Chicago. A 2011 anti-corruption report published by the University of Illinois At Chicago Department of Political science includes the following:
“The cost is high. In Chicago and Cook County there have been more than 340 convictions of public officials and business people since 1970, including three governors, 31 aldermen, more than 40 city employees in the “Hired Truck” scandal, 21 people in building inspection payoffs, and dozens of park district employees.”
Those are just some of the most well-known incidents. The report adds that this sort of corruption “cost Chicago, Cook County and Illinois taxpayers an estimated 500 million dollars a year.”
It All Adds Up
Why is it so expensive to live in the city of Chicago in particular? There are, as we see from the above, multiple causes. No single one of them adds up to be the sole culprit, but a perfect storm of these problems makes it much more costly to live in the big city.
I didn’t wind up renting an art studio space in 2007. I gave up on it for a bit because of all the permitting issues I would face; I needed to apply for a separate permit to place a sandwich board type sign in front of my own studio and was informed that a second permit would be required to load any merchandise or other materials through my own shop front door.
Other Options…For Some
I later learned there were other options for me; I wound up renting art studio space in Chicago’s historic Flatiron Arts Building in Wicker Park. The studio was one of many and not a standalone; that spared me many permitting headaches. But the expense of those permits for all the other businesses that DO require a standalone shop on the corner instead of renting a space or stall in a larger collective makes it very expensive to do business there.
Have policies changed since my time in the Windy City? Unknown to me, but as an object lesson in the many things that wind up costing you more money in the expensive city, it was quite valuable.
Joe Wallace specializes in personal finance, military affairs, and consumer protection topics. Since 1995, his work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and collects unusual vinyl records, which gives him an excuse to write the vinyl blog Turntabling.net.