CHICAGO: In one Chicago suburb, a shot at the American Dream looks something like this: Balloons, fanfare and a National Football League ( L) Draft-style raffle, with the 20 chosen ones given five minutes to pick a house priced at roughly US$500,000 each.
It’s the brainchild of Craig Johnson, Mayor of Illinois’ Elk Grove Village. If approved by the town’s board, it would be the first new residential subdivision there in more than 20 years.
Lately, the town has been known more for houses demolished in favour of artificial intelligence infrastructure.
Stream Data Centres bought – and then promptly tore down – an entire 55-home subdivision about two years ago to build a trio of data centres.
Just this week, a borrower known as Elk Grove Village Property LLC marketed US$900mil of junk bonds to build a facility tied to CoreWeave Inc.
It’s a clash of two of the most dominant trends in real estate: the need for more housing in the face of a supply shortage that’s left many Americans unable to afford homes, and the competing demand for land to build data centres.
Smaller towns outside of big cities have emerged as a hot spot for this battle.
Outraged community residents are fighting back against data centre construction, with some successfully forcing companies to scrap their plans.
Illinois currently offers tax incentives for qualifying data centres.
Plus, some data centres in Elk Grove Village can apply for Cook County’s Class 6B property tax classification, which reduces the property assessment rate down to 10% from the standard 25% for a decade.
However, Illinois governor JB Pritzker proposed a two-year moratorium on new state-issued tax credits for data centres during his February budget address, though lawmakers didn’t approve the measure as part of the budget passed.
For Johnson, who has likened the excitement around raffling off homes to the L Draft, the initiative boils down to one thing: keeping people in Elk Grove.
“The American Dream is to have a home and the place to be is Elk Grove Village, that’s why residents will have their first chance at this,” Johnson said.
“It’s a unique way to get the housing shortage addressed.” The Chicago suburb is partnering with Tonne Grove LLC to redevelop a former church site into 20 single-family homes. — Bloomberg
