It's true: Indiana lures Chicago home buyers, businesses

Construction started on almost 5,000 new homes in the Chicago area in the 12 months that ended in March, but two of the top five communities weren't even in Illinois.

They were a short drive away in St. John and Crown Point, Ind.

Indiana is calling — and Chicago-area residents and homebuilders are answering.

Casting aside long commutes, higher home prices and often mind-boggling property taxes, some Illinois residents are branding themselves as Hoosiers, and more Chicago-area builders are thinking of expanding into Lake County, Ind., to capture that business. Their arrival will change a housing market dominated by local companies for generations and prompt municipalities to act to make sure the growth comes on their own terms.

Three years ago, the region caught the attention of D.R. Horton, the nation's largest homebuilder by revenue, and it began buying lots in established subdivisions and building homes. Finding success, the Fort Worth, Texas-based company this spring is seeking the zoning necessary for it to move forward with a deal to acquire about 90 acres of former farmland on the east side of Interstate 65 in Crown Point for a 200-home subdivision.

About 20 to 30 percent of its buyers to date have been from Illinois, said Chris Naatz, D.R. Horton's vice president of sales and marketing for Chicago.

The area is "definitely a little gem that we're all just starting to discover," Naatz said. "I'm surprised it's taken this long for our Chicagoland homebuilding community to shine a light on this."

Meanwhile, Ryland Homes is eyeing the area, attracted by its lower development and building costs. "You can't argue with the numbers," said John Carroll, Ryland Homes' division president. "There's opportunity in most of Lake County."

Though builders also are flocking to Elgin, Naperville, Oswego and New Lenox in Illinois, they've realized that for some consumers, shopping for houses with an Illinois address is no longer on the list of must-haves.

Much to his own surprise, Nicolas Nieto and his family are among the recent converts.

Last year, the family began looking to move from a rental in Chicago's Lincoln Square neighborhood into a large, newer home in a neighborhood with good schools and a reasonable commute to Nieto's job at a Chicago ad agency.

They looked at Western Springs, Naperville and Lombard in Chicago's western suburbs and considered Cary and Elgin in the northwest. But they found the prices and property taxes hard to stomach. Then a few co-workers who either live or grew up in northwest Indiana suggested looking across the state line.

Nieto was unsure. "Indiana? Isn't that all mullets, corn and NASCAR fans?" he recalled thinking. "My wife was even more hesitant, that it was all rednecks and hillbilly country. But we said let's take a look.

"It was a little scary at the beginning. There is a lot of open land, cornfields. You see a lot of pickup trucks. The more I did research, the more the fear went away, and it became more of an option."

In November, he and his family moved to Crown Point, buying a home in a subdivision with winding roads and a lake — for a fraction of the price and property taxes they found in Illinois. Nieto now drives to work, a commute that takes about an hour each way, the same as it took him to walk to the CTA station, change trains and walk to his office.

"There are things you miss," said Nieto, after six months of living in Crown Point. "Chicago is a great city for food from every country in the world. You don't have that in northwest Indiana. But on a weekend when there is no rush hour, you are 35 to 45 minutes away, and if we feel like eating something, we drive 35 minutes. I'm happy and life is easy."

He's found he isn't the only former Chicagoan living in Crown Point's Ellendale Farm subdivision. One neighbor, with a large brick home and in-ground pool that backs up to a lake, used to live in the Bucktown neighborhood.

Between 2007 and 2011, a net total of more than 5,600 people relocated from Cook County to Lake County, Ind., according to census figures. More than 55,000 residents of the northwest Indiana county worked in Cook County in 2012, according to state figures obtained by Metrostudy, a housing consulting firm.

Commuting may become easier in years to come. Last week, Illinois and Indiana signed an agreement regarding the development of a 47-mile toll road, the Illiana Expressway, that would connect I-65 near Lowell, Ind., to Interstate 55 near Wilmington.

"Any time you make an area more accessible, it creates more housing," said D.R. Horton's Naatz.

Illinois is dealing with reputational issues that also could benefit the Hoosier state. Half of Illinois residents, the highest percentage for any state, said they would move to another state if they could, according to a recent Gallup poll.

Crown Point is basking in the attention, but it doesn't want the community to resemble Chicago's far western suburbs that saw runaway growth during the housing market's halcyon days, only to be replaced by stalled, half-empty subdivisions after the crash.

In 2011, 138 new homes were started in Crown Point, at an average construction cost of almost $250,000. Last year, construction began on 190 homes at an average cost of more than $259,000, according to city data.

The city's vibrant downtown square is reminiscent of a scene in the movie "Back to the Future," and city leaders seek to preserve that small-town feel while supporting development. It doesn't allow homes of the same design or color scheme to be next to one another.

"The asset we have is land mass," said Christopher Meyers, the city's planning and zoning administrator. "We're kind of a Goldilocks, a sweet spot. We haven't been like the western suburbs, where there was overdevelopment. It's exciting. To me, it's a matter of how we grow."

Just northwest of Crown Point, St. John expects construction of 210 new homes this year and is trying to woo businesses to serve the rise in residents. In 2015, the first Whole Foods market in northwest Indiana is scheduled to open in Schererville, just north of St. John.

During the housing market's downtown, St. John adopted an anti-monotony policy that forbids a builder from constructing two of the same houses within eight houses of each other. It also rewrote the zoning ordinance to increase the minimum size of homes and lots.