North Side landlords are nervous because the first installment of the 2022 real estate tax bill is due on April 3, only three months after the second installment of the 2021 bill was paid on December 30. Both bills reflect hefty reassessment increases. Hefty rent hikes likely will follow when new leases are drafted.
16-Mar-23 – Squeezed by ever-higher real estate taxes and operating costs, most Chicago landlords are planning rent increases this spring.
The median apartment rent in Chicago rose 5.5 percent since January 2022 to $1,375 a month, reports Apartment List, a national analyst of the rental market, in its January Rent Report. One-bedroom units in the Windy City now rent for a median of $1,277, while two-bedroom layouts go for a median of $1,386.
Rent increases actually eased a bit in 2022 as the pandemic slowed. Between January and December of 2021, Chicago rents rose a whopping 15.6 percent, Apartment List reported.
Last year, rent increases generally averaged 4.5 percent in North Side walk-up buildings. However, pandemic “catch-up hikes” of up to 20 percent have occurred in posh downtown high-rises, experts say.
North Side landlords are nervous because the first installment of the 2022 real estate tax bill is due on April 3, 2023, only three months after the second installment of the 2021 bill was paid on December 30, 2022.
The first installment of the 2022 real estate tax bill will be 55 percent of the second installment of the 2021 bill. So, if the December bill was $10,000, the April 2023 bill will be $10,500.
Both bills reflect extremely hefty reassessment numbers in Chicago passed on by Cook County Assessor Fritz Kaegi. Reassessment increases ranged from 38 to 55 percent in Lincoln Park and Old Town. Hefty rent hikes likely will follow in spring and summer of 2023 when new leases are drafted.
Chicago rents are a bargain compared to other cities
Median rents in Chicago are 2.3 percent higher than the national average of $1,344 a month. However, Windy City rents still are a relative bargain. Chicago rents rank 56th among the most expensive top 100 large cities in the United States, reports Apartment List. Renters in ritzy Irvine, California, for example, pay a median rent of $3,067.
Compared with the city, rents actually are more expensive in Chicago’s northwest suburbs.
In Schaumburg, rents rose 9 percent over the past year. Renters now pay a median of $1,514 for one-bedroom units and $1,845 for two-bedroom units.
Rental experts say apartment dwellers generally should budget 30 percent of gross income for rent. However, the U.S. Bureau of Labor Statistics reported that average hourly wages nationwide have grown 23 percent over the past five years, while rents have climbed 37 percent. The typical full-time U.S. employee worked nearly 63 hours in October 2022 just to pay the average rent of $2,040, Zillow reported. Therefore, 36 percent of the average workers gross income was spent on rent.
The Home Front found the following assortment of available rentals in lakefront neighborhoods on Apartment List:
Near North Side. Some 2,003 apartments currently are listed for rent in the Gold Coast, Streeterville, and Near North Side neighborhoods.
Lincoln Park. There are 1,321 units currently listed for rent in this neighborhood. At the Belden-Stratford, 2300 North Lincoln Park West, renters can choose from 127 available units in the renovated former hotel. Studios with 552 square feet go for $2,510. One-bedroom units with 560 square feet rent for $2,610. Deluxe two-bedroom layouts with 1,043 square feet lease for $5,163 a month.
Studios with 511 square feet go for $1,848. One-bedroom units with 961 square feet rent for $2,415. Two-bedroom layouts with 1,175 square feet lease for $3,695 a month.
Lakeview. Some 538 apartments currently are listed for rent here. Wave Lakeview, 420 West Belmont Avenue, near Belmont Harbor, currently has nine available units. Studios with 565 square feet go for $1,941. One-bedroom units with 532 square feet rent for $1,926. Two-bedroom layouts with 1,145 square feet lease for $3,561 a month.
For renters who can’t afford luxury apartments downtown or in lakefront neighborhoods such as Edgewater, Old Town, Lakeview, and Lincoln Park, some nice units are located in the first ring of neighborhoods outside downtown, noted Ron DeVries, Senior Managing Director at Integra Realty Resources, a consulting and appraisal firm.
In some cases, rents in outlying neighborhoods, such as Avondale, Logan Square, or West Town, are 20 percent lower than downtown and the lakefront, he said.
However, 2021 real estate tax bills in many small walk-up buildings in Avondale jumped 24 percent in 2022, so those bargains may be evaporating soon.