In February, we talked about rent stabilization and why it won’t happen here in Chicago. In addition, with new laws in place and no rent stabilization, rents will be on the rise again in 2016.
Part of rental increase is due to the city’s property tax hike. While the tax hike isn’t completely phased in, and won’t be until 2019, property owners are still passing along the tax to tenants. In some areas, rent has gone up over 11% in one year.
While rents have been increasing around America over the last two years, Chicago is among the 14th most expensive city, worldwide. This is up 10% from five years ago.
Not all areas will see a drastic price increase, and supply and demand have led rents in certain neighborhoods to rise over those in others. Avondale, Logan Square, and Wicker Park are among the neighborhoods seeing skyrocketing rental prices. Some of the rents in these neighborhoods have increased by more than $1200 a year. While construction for more affordable house is in the works, many tenants looking for better deals may have to find a new place to call home.
Neighborhoods with more stable rents are Rogers Park, Uptown, and Lincoln Park. Logan Square and Noble Square were once considered up and coming and may still have substantial rent increases, but experts predict this will even out as these neighborhoods establish themselves.
Despite all this, demand for new property is still on the rise, though not as drastically as in the last few years. As demand continues, expect to see continued new construction of residential properties.