Landlords already are preparing their New Year’s resolutions, and they might not be good news for Chicago area renters. A local trade group predicts that landlords will boost rents by about 4 percent between now and the end of 2006. “The bleeding is over,” Greg Moyer, senior vice president with Marcus & Millichap, is quoted as saying in a news release, somewhat dramatically. “Negative rental situations are in the past.” Of course, one man’s negative is another man’s positive. The negative rental situation many tentants may find themselves in shortly will involve higher rents at a time when heating and other costs are rising.
But renters had their day; this will be the first major rent increase since 2001, according to the Chicagoland Apartment Association. Record-low interest rates and a booming for-sale market turned many renters into buyers in recent years, and landlords struggling with high occupancy rates could not afford steep rent increases.
But the times they are a changin’. At the start of 2005, the downtown Chicago market saw average occupancy rates of around 93 percent, which left room for renters to call some shots. Now Ron DeVries, vice president of Appraisal Research Counselors, estimates the downtown occupancy rate at 95.8 percent. In the third quarter, suburban rents were up about 4 percent over the same period a year earlier. The day of the landlord has returned.