Chicago area rents expected to climb this spring

In the market for a new apartment and hoping to find a nice deal with some cushy incentives, like a free month’s rent? Good luck. According to Maurice Ortiz, marketing director for The Apartment People, the market is quickly shifting to favor landlords. He says that population growth in the Chicago area has increased demand, and in the city, a wave of condominium conversions has lowered the supply of rental units.

Housing analyst Appraisal Research Counselors noted in the 4th quarter of last year that the local employment picture has improved and “operating performance in the rental market is driven by employment.” Sagging rents also were the result of record-low interest rates and a hot for-sale market, which turned many renters into buyers.

Now, the for-sale market has cooled, and rents are making a comeback. According to a recent Chicagoland Apartment Association news release, the landlord group expects Chicagoland rents to increase by 2 to 11.5 percent this spring as landlords play catch-up with the market (we can’t link to the full CAA release, but the Sun-Times printed it almost whole-cloth and slapped a byline at the top).

The CAA claims that the rent increases will actually return property owners to their 2001 rates, a claim that Ortiz takes issue with.

“I don’t know if I’d necessarily agree with that,” he says. “The CAA is giving an overall synopsis of the entire Chicagoland area, and the suburbs have been stagnant for a number of years. We generally tend to see an increase every year [in the city]. Some years it may be a 1 or 2 percent increase, but last year there was a 6 to 8 percent increase downtown.”

The CAA, which remember, is a landlord group, predicted spring rents in these neighborhoods would rise by the following amounts:

  • Streeterville – average one-bedroom rent will rise 8 percent, to $1,725 a month from $1,600.
  • River North – average one-bedroom rent will rise 8.5 percent, to $1,880 a month from $1,730.
  • West Loop – average one-bedroom rent will rise 3 percent, to $1,591 a month from $1,545.
  • New East Side – average one-bedroom rent will rise 6 percent, to $1,975 a month from $1,870.
  • Lincoln Park – average one-bedroom rent will rise 9 percent, to $1,510 a month from $1,387.
  • Lake View – average two-bedroom rent will rise 5 percent, to $1,500 a month from $1,425.
  • Though Ortiz says that move-in incentives have been phased out in the city (they all but disappeared in 2006, he says) and rents have risen, especially in neighborhoods such as River North, Streeterville and the Loop, Ortiz doesn’t believe Chicago is a full-blown landlord’s market just yet. At the moment, he thinks supply and demand are fairly balanced.

    “[Renters] can expect rental increases across the board,” he says, “but I don’t know that landlords are non-negotiable and getting the rents they’d like.”

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