In 2000 Champaign County had almost 180,000 residents, with about 110,000 of that figure residing in the Champaign-Urbana area. Champaign is 15 square miles and Urbana is 8 square miles. The University of Illinois Champaign-Urbana is set on 1500 acres of those 23 square miles.
The population of Champaign County is 186,800 and growing at a four percent rate. This increase in population may explain the rise in the average cost per building with a median local home value of $91,300 that is appreciating yearly. Champaign is also experiencing a boom in the construction of new homes. The cost of a new home is $116,600 when averaged over a five year period yet the last year for which figures are available shows that 187 new buildings were permitted at an average cost: $173,900 so more luxurious homes with a higher value are now being constructed.
Neighboring Urbana has a median house value of $89,300 for an existing housing stock of 15,243 units with just over 14,258 occupied. 5247 were owner occupied and 9011 renter occupied. This figure of course reflects the student population of the University of Illinois that straddles the border between the two cities. New building permits for Urbana show the average cost of a new home as $120,600 while most renters live in one or two bedroom housing units or apartments and pay from $350-$550 rent per month.
The National Association of Real Estate Agents, which tracks home prices across the nation has found the Champaign-Urbana region with the second highest level of home appreciation in the State of Illinois with home prices rising on average 14 percent per year. The Champaign News-Gazette has reported, “Low interest rates and lean inventory have turned Champaign-Urbana, Ill., into a seller's market. According to the NATIONAL ASSOCIATION OF REALTORS, the area ranked 13th in the nation in terms of appreciation, with the median price skyrocketing 17.7 percent from $95,100 in 2002's first quarter to $111,900 the same period this year. The city surpassed Los Angeles, Miami, and New York/New Jersey/Long Island in percentage gains and also outranked all other metropolitan areas in Illinois”.
”Homes with price tags lower than $120,000 are selling fast,” says Champaign County Association of REALTORS President Pam Borowski. She adds, “The market is also attracting out-of-town buyers whose children attend the University of Illinois. They can buy a property to house their children and rent out the extra rooms, saving money on rent while fostering a profitable investment.”
This demonstrates the influence of the average age of the population reported by both towns. The large student body of the University is reflected in the median resident age of 25.3 years and household income of: $32,795 of the area.
There are 77,236 total housing units in Champaign County and of this number 35.6% are units in multi-unit structures. There are 70,597 occupied households making for a very limited number of vacancies in the Champaign-Urbana area making it an excellent place to purchase a duplex, triplex or apartment building as an investment property.
The City of Urbana is making a very strong effort to encourage the building of single-family homes. Even though the student population is high there are still a significant number of families in the community with the University alone as the largest employer in the county with over 20,000 employees. In order to alleviate the housing crunch, Urbana has instituted the Single Family Home Tax Rebate Program. This program allows property owners of newly constructed single-family homes to obtain a tax rebate for five years. Even though the rebate was for homes permitted between March 1, 2001 and December 1, 2002 the rebate remains transferable to subsequent owners within the five-year time frame of the rebate. The basic rules are that the home must have been built within Urbana City limits and for each qualified home, the City of Urbana will reimburse the property owner the differential amount in real estate taxes between the City of Champaign and the City of Urbana, for a period of five years.
The City of Champaign has been particularly forward thinking about it’s development future. Beginning in 1992 it developed its first comprehensive city plan, which it revised and updated again in 2000. Some highlights include ideas such as planning and developing “complete neighborhoods” and revitalizing the Central City. The plan attempts to preserve historic character and enhance the quality of life for all citizens while allowing for growth and economic development.
Champaign uses three main tools for promoting economic development, which include Tax Increment Financing Districts (TIF), a Redevelopment Incentive Program (RIP) and Enterprise Zones. Tax Increment Financing (TIF) is a tool used to halt and reverse blighted conditions. A community can establish a geographic area in a base year and the increase in property and sales tax over time, accrues to a special fund to be used for improvements within that district for up to 23 years. The City currently has three separate TIF Districts, located around North First Street, East University Avenue, and the North Campustown area.
The Redevelopment Incentive Program (RIP) provides assistance for permanent building improvements, encouragement of residential development, and design work for new structures within the Downtown area. There are also opportunities within Enterprise Zones for businesses locating or expanding within defined areas to take advantage of state and local tax incentives such as property tax abatement, sales tax exemptions, investment and job tax credits, and state utility tax exemptions for larger businesses.
Since the suburban boom of the 1940’s, development has predominately focused on converting agricultural land into residential, commercial and industrial uses. Champaign is striving to keep down service and infrastructure costs to its residents by encouraging developers to look to appropriate vacant or underdeveloped land within the city itself or to areas that can be easily serviced by either existing or planned infrastructure and other urban service extensions (such as waste removal or recycling) thereby helping to control costs for current as well as future community members.
Of particular importance is the compatibility of land development with the preservation of natural resources and environmentally sensitive areas, such as prairie lands and natural waterways. The city government has taken the point of view that communities are economically sustainable when a mix of urban uses is present and that a variety of neighborhoods with different characteristics is desirable. To increase the long-term sustainability and stability of the community, a mix of commercial, residential and recreational uses is encouraged throughout Champaign. This is realized when developments are well planned or when single use developments are in close proximity. Further new development should be accessible to all forms of surface transportation, whether pedestrian, bicycle or automobile. Another component cited by Champaign planners is urban design and aesthetics, because this creates the highest quality of life for a community.
The revision of the city’s master plan in 2000 recognized that availability of sanitary systems, roads, public transportation, public services such as fire and public safety and community facilities can drive development decisions. Champaign recognizes that policy and regulation will impact market decisions and always takes that into account. The City knows it can also impact the market by extending and paying for infrastructure when appropriate and if city government is proactive in extending services; the land values of the serviced land rise. In addition, stabilizing and growing a healthy central city, both residential neighborhoods and commercial areas are vitally important to the overall health of the real estate market.
The philosophy of community planners is that all of these considerations add up to not just a high quality of life, but also an attractive environment for living and doing business. Ultimately that is what provides a stable base for the long-term economic growth of the city and its residents.
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