(The Center Square) – A new Chicago Rental Market Trends report finds that average rental apartment prices across the city spiked to 19% higher than the national average in May, leaving residents here paying an average of $3,780 more in housing costs on an annual basis than anywhere else in the country.
Illinois Policy Institute Director of Fiscal and Economic Research Bryce Hill said Chicago residents everywhere are paying the price for the city’s rising rental apartment prices.
“The first two things that come to mind when it comes to why housing is so expensive in Chicago are, one, property taxes,” Hill told The Center Square. “Those are costs that are borne not only by homeowners who occupy their own homes but also by renters.”
Multifamily units in Chicago were priced in the neighborhood of $1,939 in May compared to $1,639 across the country, or up by nearly 4% over the same time last year. Hill argued that the area’s bad fiscal policies spur much of the city’s stagnant population along with being largely responsible for population levels now being lower than they were more than a century ago.
“Part of the reason why people are fleeing the city, whether they be for other suburbs within Illinois or other states entirely, is because housing costs are so out of control,” he said. “In addition, the services that taxpayers get in return for their high taxes is oftentimes not bearing out when taxpayers think of whether or not the services they receive are worth what they’re paying.”
Data shows rents across the city jumping 41% over the past decade, including by 6.2% over the first six months of 2024 alone, to an average of $2,200 a month. Apartments.com reported the average resident now needs to earn almost $78,000 annually in order to afford an average apartment. Hill explained what he feels needs to happen.
“The city could reevaluate needs,” he said. “Do we need to actually pursue the full property tax levy increase or is there room to offer not necessarily relief but to limit the growth? Another area to start would be to pursue pension reform. Both Mayor Lori Lightfoot and Rahm Emanuel, mayors prior to Brandon Johnson, advocated for statewide constitutional pension reform and a big part of that is because all the increase in the city’s property tax levy is going to pay for unfunded pension liabilities. It’s not going to pay for the continuation of services or new services or facilities, virtually all of that is going to pay towards the state’s unfunded pension liabilities.”
IPI analysis also found nearly half of all city renters now pay nearly a third of their income for shelter, including almost 90% of the city’s low-income residents, easily exceeding the federal limit for affordability.
