Stepping-stone
Townhouses boost space and privacy for move-up buyers without the cost and maintenance of single-families.
So why aren't more getting built?

by Sarah Unke

When Chris and Maura Ryan’s West Loop loft no longer could hold the couple and their increasingly mobile two-year-old, they searched for more space. They considered a single-family home, but after seeing the prices of detached houses, decided they wanted more time to work and save before buying one. For now, they have settled on a townhouse at Kilbourn Court, a development by Dubin Residential on Chicago’s Northwest Side, as a good solution to a common dilemma: how to find more space and privacy in the city without breaking the bank.

The Ryans are one of many fledgling families buying townhouses to get the room they need without leaving Chicago. Typical townhouse developments offer units with anywhere from 1,500 to 3,000 square feet, private yards or decks and attached garages. That’s larger than the average condo, but the way the space is configured can be just as important as the square footage for some buyers. Although townhouse residents share demising walls with adjoining homes, they don’t have to worry about neighbors above or below them, and multi-story layouts mean more privacy within the homes for family members.

But townhouses are not just for families, and they’re not just the second-best option when detached single-family homes prove too expensive. Singles and empty nesters are drawn to the low-maintenance lifestyle at many townhouse projects, where associations take care of things like shoveling snow and cutting grass. For retirees downsizing from large suburban single-families with yards – a growing part of the audience for new construction in Chicago – townhouses also can feel more comfortable than single-level condominiums that have little or no private outdoor space.

Condominiums continue to dominate the city market, but with more than 30 townhouse developments totaling nearly 1,000 units underway throughout Chicago, buyers have plenty of options. The homes typically have two to four bedrooms, two to four levels and prices that range from the $300s to the $800s.

But, as their numbers attest, building townhouses is riskier and more difficult for developers than building condos. Builders can fit many more condominiums in a mid-rise or highrise building than they can in a low-rise townhouse project on the same piece of land. Fewer units can mean higher costs and lower returns. Still, many developers stay in the townhouse market because of strong demand for this type of space and in some locations, because of neighborhood opposition to the dense condo buildings that have increased congestion throughout the city.

Affordable house in town
People looking for more space tend to shop for both single-family homes and townhouses, but the price difference between these products can be significant. Buyers spending $900,000 on a townhouse might have to spend $1.5 million to get the same square footage in a single-family home, says Alan D. Lev, president of Belgravia Group. Belgravia recently sold out its latest townhouse development, Chelsea Townhomes, at 1042 W. Monroe St., in the West Loop.

Townhouses are more affordable to build than detached homes for the same reasons that condos are more affordable than townhouses. Builders can fit more townhouses than single-families on the same site, and the efficiencies of constructing attached units result in lower costs.

Lev, whose company also builds major condo developments, currently is considering a townhouse project on the edge of Lincoln Park.

“Townhomes are the intermediate step, or maybe only step, for a buyer who wants to move out of a condo,” says Lev, who estimates that buyers currently are paying around $225 to $250 a square foot for the average townhouse in Chicago.

Why would a townhouse be the last step for a buyer moving out of a condo?

In part, because many of the developments have gone upscale. According to Gail Lissner, vice president at Appraisal Research Counselors, developers are building few inexpensive townhouses, and price points on higher-end townhomes are now comparable to those of single-family homes.

Consider the Mansions of Prairie Avenue, a development five-story rowhomes by Rezmar Development in the South Loop. The $2.5 million to $2.9 million attached homes, which recently sold out, seem, as their name implies, more like single-family mansions than townhouses. They include private elevators, fifth-floor decks, media rooms, climate-controlled wine storage, full-floor master suites and around 5,800 square feet. Remaining townhouses at the 26-unit City Club, at 460 W. Superior St. in River North, are priced from the $900s to $1.4 million and include four levels, custom kitchen cabinets, marble master baths, dual-zone heating and air conditioning, and two- or three-car garages.

The escalation in prices, however, has pushed some out of the townhouse market.

“We continue to see very strong unfulfilled demand for low-end townhomes,” Lissner says. “There’s a lot of depth in that market.” About one-third of all current townhouse developments have prices starting higher than the $450s. In some cases, much higher.

But affordable new-construction townhouses are available. Adams Place, a 44-unit development at 2310 W. Adams St., has homes with two or three bedrooms and two or 2.5 bathrooms. The three remaining units at Adams Place, developed by Lyonhart Group, were priced in the $330s at press time. McKinley Gardens, a newer project by developer William Warman, has 69 units with three or four bedrooms, attached garages and private yards in McKinley Park, on the Southwest Side. The development opened in spring of 2005 with prices that started in the $280s.

Move-up buyers in their late 20s to early 40s are the prime audience for townhouses, says Mike Kelahan, director of sales and marketing for Dubin Residential, which has three townhouse developments on the market. Kelahan says that the condos and lofts many of these buyers purchased several years ago have appreciated well, and they are using that equity to trade up to larger spaces.

Better design
During the ‘80s and early ‘90s, buyers often traded down in design as they were trading up in space at Chicago townhouse developments. Builders shoehorned as many units as possible onto townhouse sites. Courtyards were tiny or nonexistent, grass was sparse, and garages and blank end-walls faced the street.

In the ‘90s, however, the city passed townhouse ordinances that prohibited street-facing garage doors while requiring lower density and more green space at townhouse developments. These mandates have made townhouses, which had become something of a blight in communities like East Village, easier on the eyes and more neighborhood-friendly.

“I agree with these design dictates wholeheartedly,” says Roy H. Kruse, principal at Roy H. Kruse & Associates. “I think they’ve improved the units by taking the garage door off the front of the units and adding more open space.”

Kruse designed townhouses at University Village, a large planned community that also includes single-family homes, retail space and other uses, at 1440 S. Halsted St. His biggest goal in designing the units, Kruse says, was to provide open floor plans with a homey feel.

Townhouse buyers appreciate the fact that these attached units can have the feel of single-family homes. They prefer private parking to the massive basement garages in condo buildings, and they’d rather have neighbors side-by-side than all around.

Leeann Morales, an information technology professional, moved to a Kilbourn Court townhouse from an apartment in part for more space and the feeling of a single-family home. Morales considered buying a detached single-family, but with a townhouse, she could afford to double her living space and buy brand new construction.

“I could have bought a house in the same neighborhood for about the same price, but not new,” Morales says.

Kilbourn Court, 4506 W. Belmont Ave., has 116 three-story townhouses with two or three bedrooms and prices from the low $300s.

The low maintenance of a townhouse, where the homeowners’ association takes care of common areas, was another important perk, according to Morales. “For a lot of single people, what it boils down to is we don’t have time to cut the grass,” she says.

Neighborhood locations
Morales hesitated over the location of Kilbourn Court, which is in Kilbourn Park, northwest of the Bucktown apartment building she owns. Bucktown’s streets are lined with trendy bars and boutiques. Kilbourn Park is a quieter residential setting and unlike Bucktown, not a destination for dining or entertainment. Eventually, low prices and high potential made the decision for her.

“It’s an up-and-coming area,” Morales says. “A lot of development is starting, and the prices are more reasonable.”

Most townhouse developments are outside of the downtown area and on the North Side at least, are far from the dense, developed lakefront. They tend to be located in emerging areas or established neighborhoods far from the Loop, often on the South Side or Northwest Side.

“We’re building in more residential areas, more communities. That’s what people want,” Kelahan says.

That’s also where the land is available and comparatively affordable.

In addition to Kilbourn Court, Dubin Residential is building another townhouse project on the edge of the rapidly growing South Loop, at 23rd Street and Wabash Avenue. The Wabash Club, 2301 S. Wabash Ave., includes 62 townhouses with two bedrooms and prices ranging from the upper $300s to the low $500s.

Dubin also has a townhouse development in the West Loop, a popular downtown neighborhood that has been dominated by lofts and mid-rise condos during the last decade. Monroe Place, at 1228 W. Monroe St., offers homes with two or three bedrooms priced from the mid-$400s. One reason that only two of the 33 townhouses remain for sale at Monroe Place is that new townhouses in this sort of central location have become rare.

The projects have pushed farther out, where land is less expensive and more open, but infill townhouse developments, even in dense neighborhoods such as Lakeview, continue to appear. Developer New Haven Homes is replacing a former chain factory on the 1800 block of West Belmont Avenue, in Lakeview, with Honore Court, a 14-unit development of two- and three-bedroom townhouses priced from the $540s to the $760s, according to Jonas Phillips, of Rooney Realty, Ltd., marketing agent for the project. New Haven’s Townhomes on the Square has 31 townhouses with two or three bedrooms priced from the $490s to the $610s at 4949 N. Lincoln Ave., on the site of a defunct funeral home in Lincoln Square. The South Side has emerged as the area with perhaps the most townhouse development – at least 15 projects currently are underway. More land is available on the South Side and open parcels tend to be larger. Prices have risen rapidly, but they remain more affordable than on the North Side. Large comparatively affordable sites are key for townhouses, which eat up more land than condos and usually include more common green space.

About half of the townhouse developments on the market right now are part of super-developments that include condos, rowhomes and single-family homes. These planned communities often have landscaped parks and courtyards.

University Village East, the third phase of the 661-unit University Village development, will have 31 townhouses, 36 single-family homes and 152 condos all planned around the green space of playgrounds and courtyards. The townhouses in the latest phase are priced from the $580s to the $760s and are being developed by the South Campus Development Team, composed of Mesirow Stein Real Estate, Inc., New Frontier Companies and Harlem Irving Companies.

At its Jazz on the Boulevard project, the Thrush Companies has opened sales for 13 townhouses that will overlook a landscaped central courtyard, according to Robbi Davis, director of sales for the developer. The courtyard townhomes range from $350,000 to $397,500 and include two or three bedrooms, two or 2.5 baths, attached one-car garages and around 2,000 to 2,180 square feet.

Mixed-income communities
The Chicago Housing Authority’s vaunted Plan for Transformation also has encouraged townhouse development as part of larger communities. As public housing projects are demolished, the new mixed-income developments replacing them usually include a townhouse component.

Roosevelt Square is a mixed-income community being built on the site of the CHA’s ABLA Homes, at 1200 W. Roosevelt Road. LR Development and Quest Development Group eventually will build 1,351 new homes on the site. The first phase, which broke ground earlier this year, includes 38 townhouses and 195 condos.

Following the typical formula at these redevelopments, Roosevelt Square will be roughly one-third CHA replacement units, one-third affordable housing (for those who make up to 120 percent of the area’s median income) and one-third market-rate. The two- and three-bedroom townhouses at Roosevelt Square start in the $480s.

Park Boulevard, which has a sales center at 47 W. 35th St., is the redevelopment of the CHA’s Stateway Gardens public housing complex. The new community will sit on 37 acres and include more than 1,300 townhouses and condos. Early plans called for the townhouses to have two to four bedrooms and prices starting in the $270s, though at press time, Park Boulevard units were not yet on the market.

Townhouses are likely to continue as part of the diverse offerings at large planned communities and CHA redevelopment sites, as well as on small infill sites, especially in settled neighborhoods wary of denser condo projects. The high costs of land and construction will limit their number, but that’s not necessarily a bad thing for builders in this niche.

“Our developments have been very well received,” says Kelahan, of Dubin Residential. “There is certainly strong demand.”