December 4, 2023

Experts: Chicago’s Rental Market Full of Many Complex Realities

By Hans Sabado and Osvaldo Robles

Chicago housing photo Polk Street in Chicago has a mix of rental apartments and single-family homes.(Photo/Osvaldo Robles)

Chicago resident Sarahi Medrano is one of many renters in the city. She’s among many speaking out on rising prices of rent, especially when it comes to low-income families.

“In my opinion, I believe that this spike here in Chicago, it’s, it’s bad. It’s not a good thing, especially for the low-income families,” she said.

“Unfortunately, sometimes they work in an environment where they don’t get paid [well] or sometimes, they demand a higher pay rate. And they don’t, they don’t accomplish that.”

Read more: Cost of living, minimum wage make home ownership a challenge 

With 54% of households in Chicago being renter-occupied, the topic of the rising rent prices is complex. The many intricacies of renting may not be apparent to most people. From landlord-tenant relationships to rising property taxes, the complexity of the topic of renting reveals a tricky situation.

Being among the largest cities in the U.S., Chicago has a large population of renters. 607,772 households in Chicago are renter-occupied compared to the 507,809 households that are owner-occupied. While the difference between the two is only about 8%, there is a slight majority of renters in the city.

According to Zillow, the average rent in Chicago is $1,958 as of November 2023. Compared to November last year when the average rent was $1,795, there has been about $163 increase in the price of rent. This translates to about an 8.7% increase.

Compared to the increase in the Chicago minimum wage from $15.40 an hour to $15.80 which reflects to only about a 2.5% increase, it is easy to see how residents that are renting have concerns regarding the steady increase in rent that constantly occurs.

Medrano said tenants must balance their expenses with other responsibilities.

“It affects them on their daily lives because you have these landlords raising their rent, and they’re having to maneuver with the whole expenses and having to come out with a whole different plan,” she said.

With the rising rent prices in the city of Chicago, the issue cannot be solely assigned to landlords arbitrarily increasing rent prices. Landlords are also faced with many challenges when it comes to the process of renting out properties that tenants and others may not be familiar with.

Being an experienced landlord who manages Airbnbs and as well as long-term rental properties, Sarah Martinez attributed rent-price hikes to the increase in property taxes and the cost of living in the city.

“Of course, with, you know, everything going up, property taxes have gone up. It was hard for us because we know how hard it is to live here in Chicago, but unfortunately, with everything going up, so does rent,” she said. “Our property taxes for the house that I was born and raised in actually went up in Humboldt Park about 3,000.”

In 2022, Chicago had a residential tax rate of 1.52% and an apartment tax rate of 1.62%. By comparison, the average tax rates for the largest U.S. cities for residential and apartments were 1.32% and 1.58% respectively.

Martinez also talked about how the gentrification of different neighborhoods in Chicago has caused a spike in the cost of living overall. She also said many tenants are leaving the city of Chicago and moving into the suburbs closest to Chicago as they are more affordable than living in the city itself.

“So obviously, you know, gentrification. So, everything has been going up in the Humboldt Park, Wicker Park area,” she said. “People do tend to go on the outskirts as closest to Chicago as they can, but far enough to where they can get by day to day without having to worry about, you know, how to put a plate on their table or, you know, paying their rent. And that’s the unfortunate circumstances of our economy.”

One of the closest suburbs to Chicago, Cicero has an average rent of $1,100. When compared to Chicago, the rent in Cicero is 44% lower. Also, unlike Chicago, the rent in Cicero has decreased about $100 compared to the previous year. Given the disparities in rent prices and trends, data show Chicago tenants are opting to relocate to the nearby suburbs.

StoryMap: What cities in the Midwest have the highest rent?

With rent prices steadily increasing, many tenants have tried many ways to combat the price hikes. According to realtor Ryann Segura, tenants have talked directly to their landlords to try and alleviate the increase in rent prices.

“I’ve come to find out that they’re asking, they’re asking the landlord to deduct maybe a few hundred bucks off the rent just because of how loyal they’ve been, how clean and how dedicated it is to paying the rent, making sure that the property stays in good condition,” Segura said.

Segura said lowering rents could help landlords who are feeling mortgage pressures themselves. The consequence of a tenant leaving, and the time and effort required to fill the vacancy, can pose challenges for the landlord.

“When you’re dealing with the vacancy, now you don’t have money coming in to pay your mortgage, so who has to pay that? The landlord,” he said. “When there’s a vacancy, the landlord has to spend money on ads, on marketing, on trying to get a property out there so that more people can see it.”

Segura also said that due to rising rent prices, many tenants actually want to buy property themselves but are staying away due to the many complications that homeownership may come with.
“There’s a lot of people that want to buy but are sticking on the sidelines. The reason why people are on the sidelines and watching from the outside is because the main point is they are scared of the interest rates,” Segura said. “Interest rates have been high compared to the last three years, and that’s what’s keeping people up again.”

The complications around renting in Chicago involve challenges between both landlords and tenants alike. While many tenants struggle with keeping up with the increasing prices of rent in the city, the blame cannot be fully attributed to landlords alone as landlords themselves are forced to face many problems regarding the increasing of property taxes and costs of living themselves.

With the minimum wage in Chicago not keeping up with the rising costs of living in the city, many residents have opted to move to the nearby suburbs of Chicago hoping to be able to live more comfortably without having to worry about deciding to either pay rent or putting food on the table.

The complex issue regarding rent prices and housing is not so simple that it can easily be solved, but it should always be maintained in the public consciousness due to its significance.
Martinez made the importance clear with a simple statement.

“Homes are always needed,” she said.


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