Hybrid Work Brings New Office Paradigm

Hybrid Work Brings New Office Paradigm

Hybrid work is the buzz phrase right now in HR and recruiting. And of course, a lot of us are spending time working from home now but to employees, hybrid means they want flexibility in their schedule. Rather than a fixed schedule where it’s like, okay on these days you come into the office and these days you work from home, they want to be able to come and go when they want. Hiring talented people is very challenging right now in almost every industry. Much like in real estate, we have a sellers market for job seekers and employers are finding that they need to step up their game in order to attract top talent and that means to provide the right work environment. People in the workforce now are expecting to be treated like adults who are capable of making good decisions about when they need to be in the office and when they can get more done at home or from another remote location. Top companies, those are the ones that win awards for best places to work and things like that, they realize that a good hire is going to thrive with this flexibility and that that’s the person that they want to hire for the growth of their company. If you’re interested in investing or building, developing for yourself, even if it’s in a small way, it’s really important to understand the deeper trends that are driving the market. And just like in trading stocks or anything else, profits are made by riding that wave of the trend and that’s the way you do it.

West Loop & Fulton Market Hybrid Working

West Loop & Fulton Market Hybrid Working

You know since the pandemic, we hear a lot about Hybrid Working, but I find that a lot of people, and I mean even real estate people here in Chicago aren’t really aware, that this hybrid work model has already been driving huge changes in the office market here for a few years. In the past , when we think of downtown offices it’s always been high rises in the loop, but with hybrid working, people need to be able to come and go easily, to and from work, at any time of day and they don’t want to have to fight their way into the loop. Now Chicago is turning into and important hub for Venture capital startups and tech businesses, but of course just about every business today needs to be a tech business, right? Young people are getting high paying jobs and they want a cool place to live that’s near work, friends and social activities. Most aren’t interested in owning cars and they need to be able to get back and forth easily by walking, bike or Uber. These are the people who are renting all these cool, new construction high rises, that we see going up all around us and these new buildings have great amenities to help make it easy and convenient for residents to work from home. Now of course if you live in a cool new place with all the latest high tech amenities, you’re naturally going to expect your workplace to offer the same. Smart companies know they have to stay out in front of this and position themselves to attract top talent and real estate developers are helping them do that by putting up some really awesome new office projects. So It’s about “Work Near Where you Live!” and the West Loop and Fulton market areas are where you see some great new office developments going up right alongside all the the new residential projects. Take a look at this article from Curbed Chicago. On their map they are showing 58 office and residential developments now under way in the West loop and Fulton Market Districts. Some are still up for approval, but most are already approved and under construction. You can scroll through to read about each of them. First is Focus Development and Shapack Partners 167 N Green. This is a great looking office project that is located right across the street from the Parker which is this residential building that they finished recently. We see quite a bit of this in Fulton market where a developer will put up both office and residential projects adjacent, or near one another. Most of these office projects include a lot of new amenities like sidewalk galleries where pedestrians have a covered walkway, touch-less entry paths, bike rooms on the ground floor, gyms, cafe’s with space to relax and collaborate, meeting rooms and easily accessible outdoor space. They are designed for high connectivity and with high tech ventilation and air filtration systems. Many also have attractive retail / restaurant components on the ground floor or maybe a mezzanine level with outdoor space. If you haven’t been through the West Loop or Fulton Market lately, take a ride one afternoon and check it outl!
Chicago Residential Zoning for Single Family Homes

Chicago Residential Zoning for Single Family Homes

Chicago Residential Zoning

One of the first questions that people often ask me is what can I build on my lot or if they’re looking to purchase a lot, what what type of zoning do I need in order to build what I’d like to build. So, in order to understand this, we have to take a look at the Chicago zoning code

The Zoning code designates R Districts for residential, B districts for business, C districts for Commercial, D districts “downtown” (that allow taller buildings), PMD for planned manufacturing and PD for planned developments where a developer brings a plan in front of the plan commission for approval of a specific plan outside of normal zoning designations.

Each of these R, B, C and D districts are divided into a number of different sub designations, like RM 3, RT 4, B 1-3, B 3-2, etc. and each of these has a different set of allowances (or limitations, depending how you want to look at it).

R districts are divided into: RS for single family,
RT for Single family, Two flats, three flats or small multi family and
RM for bigger multi family
let’s take a quick look at the zoning map;

if I pull up our Chicago zoning map here I’ll just put in an address let’s say 1600 N. Wolcott. This is a busy commercial stretch on North Avenue so you can see mainly B and C zoning in these type of zoning districts don’t allow Residential on the ground floor, so you have to store fronts and businesses.

If we look at the side streets we can see a bunch of different zoning here but mainly we see a lot of RS three and RT for zoning and teaser a couple of residential Carmen Residential districts no. Now looking at all the different types of zoning in this neighborhood it probably seems quite random but keep in mind this is a very old neighborhood which has undergone several changes in demographics over the years. The zoning code has also been changed a number of times over the years.

So what we see now is taking into account what’s already existing and also taking into account the city’s plan for continued development in this area.

So let’s just look at RS 3 zoning as an example. In RS 3 districts the code in effect limits you to single-family homes in effect by designating a minimum lot area per dwelling unit of 2500 ft.². So, on a standard lot which is 25 x 1 25 or 3125SF, you’d only be allowed one dwelling unit.

Probably the most important concept that you need to understand is the idea of floor area ratio or what’s called FAR. This is is an allowance for how much area can be built on the site as a ratio to the land area.

RS 3 designates an FAR of .9 so if you multiply our 3125sf times .9 , we get about 2800sf. This is the floor area you’d be allowed to build on a standard lot in RS 3 zoning. (keep in mind basement space below grade does not count against your FAR). So, another words on that standard lot, you could bill 2800 ft.² above grade plus your basement

Now RS 3 also designates a height  limitation of 30 feet so assuming you have a basement that brings your first floor level up to 5 or 6 feet above grade you’re effectively limited to a two-story house plus basement there’s really no way to get a three-story house in here unless you built three stories on grade, but then each level could be a maximum of 2800÷3 = 930 sf . That’s too small of a footprint, so it wouldn’t make sense for anyone to do that.

So if you divide your 2800 by 2 your max is two floors of 1400 ft.² and you also can have a 1400 square-foot basement so your total square footage can be up to 4200 ft.². Pretty good sized house, right? But it’s only 2 stories.

Now there are also limitations for your setbacks on your side yards and your front and rear yard which can affect the footprint of the property allowed. So it varies by the building type.

RT 4 zoning has a minimum lot area of 1000SF per dwelling unit, so our standard lot can accommodate up to 3 units.
in RT 4 for example, your FAR is 1.2. So a standard lot would allow 3125 x1.2 = 3,750 SF. In 38 ft, you can build 3 floors plus a basement,
so for example, if you just divide that 3750 by 3 floors, you could build 1250SF per floor plus 1250 basement.

You could divide it up different ways, for example you might make the lower floors a bit bigger and the top floor a bit smaller, Maybe doing an owners unit with  roof deck.

RM zoning expands your FAR and you height limit goes up to 45 feet or more which can allow another floor. Minimum lot areas required per unit drop to 700SF or less, but the number of units you can build is practically limited by how many parking spots you can get on the site.

As you get into bigger and bigger projects the considerations with zoning and building codes get more and more complex.

This is but one of the reasons that architects need to be licensed. They are ultimately responsible for interpreting the codes and designing your new building to be in conformance.

Bigger projects, often require an experienced zoning attorney to apply for zoning variances or to apply for zoning changes, neighborhood approvals or apply for a Planned Development, but sometimes we might need a zoning attorney even for a small project.