The ULI Fall Conference took place on October 11-14, 2021 in Chicago, IL

My ULI experience began with a walking tour of uptown Chicago, named one of the “40 Coolest Neighborhoods in the World” by TimeOut Magazine, and seeing its transformation from a forgotten urban jungle into a desirable community to live, work, and play. Vibrant street life, programmed events, food cooperatives, entertainment venues, and a rehabbed train station draw regional and national visitors. Street art and locally owned ethnic food restaurants dot the area, in what has become the new hip neighborhood to explore. The Draper apartment building renovation is worth a visit–the innovative use of space, creative solutions to amenities, and engagement with outdoor spaces create community in the tallest and most dense project in the neighborhood. 

Mural seen on a walking tour of Updtown Chicago

Trends & Takeaways

Housing affordability and climate change were the top two topics highlighted by  panelists and attendees at the conference. Topics like supply chain issues, labor shortages, and inflation’s impact on the multi-family industry were discussed, debated, and recognized for merit through the lens of Environment, Social, and Governance (ESG).  

Credit ULI

Top industry executives spoke on “ESG: The Strategic Perspective” (photo credit: ULI)

Housing Needs for a Post-lockdown World

General trends from the seminars and general sessions I attended point with optimism towards a post-lockdown desire to move on. There is pent up need for housing of all types, and it will not slow down anytime soon, as construction has not kept up with migration patterns and increased demand in most parts of the country. Both single family and multi-family units are lagging, but none more than the affordable sector which has stagnated due to commodities and labor costs. Construction replacement values have risen by over 25% in the last cycle. While rent escalation has closed the gap for market rate deals, low-income renters continue to struggle as demand outpaces supply by a factor of 4x in this sector. Regulatory agencies have doubled down on energy reduction requirements and the cost gap to Net Zero has increased significantly, making it much harder to provide critically needed affordable housing. 

An emphasis on wellness and quality of living is here to stay, accelerated by COVID-19 along with technology enabling touchless systems, online purchasing, and remote working. Outdoor gyms, larger gathering spaces, and tight communal functions are expected to return to pre-pandemic levels along with extra cleaning and social distancing. 

The Draper apartment building in Uptown is focused on building community.

Other Economic and Social Trends

In the economic trends seminars, most charts show the huge dip early in the cycle recovering to pre-pandemic levels, and many indicators are now at levels even higher than when the lockdowns began 18 months ago. 

Senior housing saw a demand increase of over 12,000 units with only 3,500 units constructed in the past year. As production continues to lag supply in all housing sectors, prices will increase, making both home ownership and rental models more difficult to pencil out. The good news is, there is plenty of liquidity in the market and large institutional investors (national and international) focusing on housing as a sector of interest.

Multi-family in secondary markets and transit-oriented development (TOD) in tertiary markets are in high demand, and we continue to be in a sellers’ market. Single Family Rentals (SFR) and Built to Rent (BTR) communities have outpaced traditional multi-family construction, and this trend appears to be getting more traction from high net worth and institutional investors. Competition and land availability is the biggest barrier to entry in this space. 

Inflation is predicted to go higher, interest rates will remain low, and the supply chain issues will delay equilibrium by at least two years, forcing the new cap rate to be around 4% for multi-family, and even lower for industrial properties. 

As the work from home phenomenon plays itself out, and most will return to the office in the next year, demand for urban core properties should stabilize, even though 70% of office tenants have signed lease deals of less than 5 years going forward. 

According to experts on the “Beyond the Building: Real Estate Strategies for the Social Equity Imperative” panel, it is essential for values like social equity and racial justice to shape the development process, particularly when it comes to development in disadvantaged and underserved minority communities. (photo credit: ULI)


Overall, the vibe at the conference was positive (although not as many live attendees), with most developers I spoke with having a bullish outlook as they expect to increase their multi-family holdings, and actively entitling new properties to come online once commodities stabilize a bit more. Both demand conditions and availability of funding will create significant increased housing development activity in all residential sectors over the next two years.  

Despite some of the challenges mentioned above, Progressive AE is committed to using the lessons learned at this years’ ULI meeting as in years past, to helping our clients explore and develop strategies to make multi-family housing more attainable and sustainable.