A new study finds there has been a rise in the number of wealthy households renting in the Chicago area even as the overall rental market has cooled.
The percentage of renters rose from 37.7 percent in 2007 to 44.2 percent in 2015, according to the report from DePaul University’s Institute of Housing Studies, “2018 State of Rental Housing in Cook County.”
But the following year saw a slight drop, to 43.9 percent. Geoff Smith, executive director of the institute, says that suggests the rental market is leveling off, though not equally among lower-income and higher-income households.
“Countywide, it is leveling off, but the city continues to grow,” Smith says. “That growth is being led in higher-income people renting.”
Smith says that people 35 to 44 years old — who were a big part of the renting boom earlier this decade — might be shifting to buying homes.
The number of households in Cook County making more than 120 percent of the area’s median income — which is $67,700 for a two-person household — and renting went up 15 percent between 2012 and 2016, to 187,230.
On the other end of the spectrum, the number of households bringing in less than 30 percent of the median income has fallen 3 percent, to 240,874.
The neighborhoods and types of buildings in which people are renting also have changed in recent years, especially as classic two- to four-flat buildings have fallen out of favor and people increasingly have been priced out of popular neighborhoods.
“What I am seeing is a migration to other neighborhoods,” says Maurice Ortiz, director of operations for Apartment People, which says it helps thousands of people a year in the Chicago area find a place to rent. “People are getting priced out of trendier neighborhoods. People who would be living in Lake View or Lincoln Park in 2013 are ending up in Rogers Park, Jefferson Park or Irving Park.”
Ortiz notes that his company helps many people who are moving to the city, often with a good job in hand. Those renters are increasingly less likely to end up in the smaller, two- to four-unit buildings that have dotted Chicago’s neighborhoods for decades.
The DePaul study found that the share of such buildings has dropped, while the share of bigger apartment buildings and single-family houses being rented out have increased.
“Demand for housing has shifted a bit,” Smith says.
Those smaller buildings are being taken off the market in wealthier neighborhoods like North Center and being replaced by developers with single-family homes or modern condo buildings, according to Smith. But he says that, in lower-income neighborhoods, such buildings often deteriorate to the point that they can’t be rented.