By Alexis Schofield
@redlineproject
AI disclosure: ChatGPT was used to create an outline for this story and write the summary featured at the top. MidJourney was used to produce images throughout the story, guided by my art direction. ElevenLabs was also used to create an audio version of the story for those who prefer a podcast format over text.
Summary: Chicago’s affordable housing crisis continues to worsen, with a shortage of over 119,000 units and more than half of renters spending over 30% of their income on rent. The rental market, which saw a brief decline during the COVID-19 pandemic, has rebounded with rising rents, reaching a median of $1,724 in 2025. Despite the city’s efforts, housing development remains slow, especially in low-income areas. Many policies aim to increase supply and preserve affordable housing, but challenges persist, leaving renters increasingly burdened.
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Affordable housing is only getting harder to find in Chicago, with a shortage of over 119,000 units and more than half of all renters considered rent-burdened — meaning they spend over 30% of their income on rent and utility costs.
This situation is affecting neighborhoods citywide, with both tenants and landlords feeling the pressure. Isabella Paredes, a private landlord and public relations specialist at @properties, has seen the problem from both ends.
“Rent prices definitely have gone up [in recent years],” she said. “At first in 2020–2021, they went down a lot for COVID… In 2022, the housing market got really competitive, and now the rental market is getting even worse.”
Chicago has long faced challenges with housing insecurity and a shortage of affordable units, but the COVID-19 pandemic saw a noticeable shift in rental market trends.
According to a report from Apartment List published in the Chicago Tribune, rent prices dropped nearly 12% in Dec. 2020 compared to Dec. 2019, with the average rent falling from $1,355 to $1,193 — but this trend quickly reversed in the following years.
Now, according to a 2025 report from Apartment List, the overall median rent in Chicago stands at $1,724, marking a 2% increase in just one month and a 4% increase over the past year — further exacerbating the issue of being able to find affordable housing.
While the rent decline during the pandemic helped many struggling residents, it also created difficulties for landlords trying to keep tenants. Consequently, the trend quickly flipped in 2021, with rent prices beginning to rapidly increase.
According to the Statista Research Department, the largest year-over-year rent increase occurred in Feb. 2022, when rents soared nearly 16% compared to the previous year. Since then, growth in rental prices has continued, with the average increase settling at 1.7% in Jan. 2025.
With the rental market at a competitive high, new policies have been introduced in an attempt to address the ongoing housing crisis in Chicago.
Expanding Housing with Additional Dwelling Units
Rising rent prices aren’t just about more people moving to the city — they’re also about the lack of places for them to live. To help expand housing options, Chicago approved the Additional Dwelling Units (ADU) Ordinance in 2020, allowing homeowners to add units to already existing, legal residential properties. These are commonly referred to as basement apartments, backyard houses, coach houses, or in-law apartments.
However, an Illinois Policy Institute report shows that the actual number of these units hasn’t increased much since 2020, when the policy was approved. This is despite 71% of Chicagoans approving of adding more additional dwelling units (ADUs) to the city to create more housing supply, according to a 2022 Zillow report.
A major issue is how restrictive the process is, with these types of units only allowed in a limited number of zoning districts. Also, long application wait times to build these units and high permit fees contribute to the lack of additional dwelling unit approvals in Chicago. Private landlord Isabella Paredes points to this lack of new units.
“There are no units making it onto the market — new construction is just not happening in Chicago,” she said. “… and there are more and more people moving to Chicago, that’s one aspect of it: Not enough rental supply, not enough housing supply.”
These restrictions have led to unequal housing development across Chicago’s various neighborhoods. While more than 60% of eligible properties are located in the South, West, and Southeast zones, these areas have received less than 7% of all permits combined, according to a 2024 Illinois Policy Institute report. Instead, the majority of permits have been granted in the North and Northwest areas of Chicago.
“Another thing that’s happening in Chicago’s rental market is the deconstruction of the two-, three- and four-flats,” Paredes said. “They’re becoming luxury single family homes, especially on Chicago’s northwest side.”
This crisis is part of a bigger trend — money keeps flowing into neighborhoods that are already thriving or doing well, while lower-income areas continue to get overlooked, leaving them with fewer resources and not enough access to affordable housing.
Solutions to Address the Rental Crisis
Chicago’s rental crisis isn’t going unnoticed, with the city pushing for a range of new policies and solutions to make housing more affordable, add more dwelling units, and stop the loss of already existing affordable housing. Some are already in motion, while others are still gaining traction.
As mentioned before, one approach is the Additional Dwelling Units (ADU) Ordinance, which allows already existing legal residential properties to add additional living spaces by fixing up basement, coach, or backyard units.
“The city would incentivize people to add units or bring legal ones up to standard — just to bring more housing to the market,” Paredes said.
However, the program hasn’t lived up to its expectations. So far, most permits have gone to those on the north and northwest sides of the city, while lower-income areas — where affordable housing is often needed most — have seen fewer approvals.
To slow the loss of affordable housing units, the city passed the Northwest Side Preservation Ordinance in Sept. 2024. It raises the fee for converting or tearing down multi-unit rental buildings to $20,000 per unit or $60,000 per building — whichever is higher. It includes neighborhoods facing intense gentrification and displacement, including the community areas of Avondale, Hermosa, Humboldt Park, Logan Square, and West Town.
Read More
Read the other stories in our five-part series about Chicago housing issues.
Coverage: Will Humboldt Park’s Identity Survive Gentrification? | Chicago Facing an Affordable Housing Crisis | Mapping Chicago’s Affordable Housing | 2025 project overview
Opinion: A Legacy of Discrimination: Chicago’s Housing Bias | Quiet Displacement: Chicago’s Affordable Housing Crisis
However, a 2025 Illinois Policy report questioned whether the ordinance will actually improve access to affordable housing, raising concerns that higher fees could backfire by discouraging people from buying or selling in these areas.
The ordinance also includes the Tenant Opportunity to Purchase Block (606) District Pilot Program, which went into effect in March 2025. It gives tenants in this district the right of first refusal if their building goes up for sale, allowing them the opportunity to organize and potentially purchase the property before it’s sold to outside investors — if they and/or other building tenants can afford to do so.
However, a 2023 report from the Institute for Housing Studies at DePaul University found that over half of renter households in Chicago were already cost-burdened in 2021. With so many renters already struggling to cover basic housing costs and living expenses, most simply can’t afford to buy the buildings they live in.
In the end, all of these efforts show that Chicago is attempting to solve the affordable housing and rental crisis — but for many renters, the reality has only gotten worse.
Audio
Reporter Alexis Schofield talks about reporting this story.