If you thought bidding wars were only a problem for Chicago home buyers, think again! Some Chicago renters face competition as available units remain behind demand. Here’s what’s going on, according to reports from Block Club Chicago and Yardi Matrix.
Just as the inventory of Chicago homes for sale has been limited, rental units have been limited as well. Part of the reason is due to extended leases that were signed during the pandemic. In other cases, people are staying in their apartments out of personal preference or necessity. At the same time, the development of new rental units has largely focused on luxury residences with higher price tags.
Meanwhile, part of the growing demand for rental units stems from an influx of remote workers relocating from more expensive metros. In comparison to other big cities, Chicago offers a lower overall cost of living. Plus, Illinois does not tax retirement income from 401(k) accounts, pensions or Individual Retirement Accounts. Another draw is Chicago’s range of amenities, including Lake Michigan shoreline, upscale shopping and dining destinations, nightlife, festivals, and cultural opportunities.
Neighborhoods in high demand include areas like Lakeview, West Town, Logan Square, Bridgeport, Wicker Park and Andersonville. But a neighborhood doesn’t have to be trendy to attract new residents – the national quest for affordable housing can create renter competition just about anywhere.
The result has been multiple applications for limited rental units, especially in Chicago’s popular neighborhoods, with tenants offering monthly rents well above the advertised lease. Unfortunately, this has the net effect of increasing rents across the board for much of the city.
Chicago’s renter competition may have peaked in August, when prospective tenants were battling it out for units becoming available October 1st. However, if there is a prolonged imbalance of supply and demand, the rent won’t have a reason to come down. Currently, Chicago rents are now higher than the national average – though they remain a bargain to anyone used to prices in New York, L.A., San Francisco or Boston.
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Ryan Gable Broker/CEO Starting Point Realty
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