Recession worsens shortage of affordable rental housing
Updated on 11/15/11 at 11:20 a.m.
A new study shows that Cook County’s persistent shortage of affordable rental housing has gotten even worse in recent years.
For years, the constraint on affordable housing came from the overheated real estate market. Developers converted apartments to condos, pushing out tenants. But then the recession hit, and people needed to downsize.
Geoff Smith is executive director of DePaul University’s Institute for Housing Studies, which published the report.
"More people essentially were making less money and needed to access affordable housing," Smith said.
He says the shortage of affordable rental housing now stands at 180,000 units in Cook County.
One problem, Smith says, is that banks are more cautious about making loans to people buying smaller apartment buildings – anything with fewer than 100 units.
"Those make up much of the affordable housing stock in Chicago and Cook County, but they tend to be the types of buildings that are more challenging to finance," Smith said.
According to the report, more than 97,000 units in multifamily buildings in Cook County have been part of a foreclosure auction.
The shortage of affordable rental properties is having the greatest impact on less affluent renters, many of whom are forced to pay more than recommended 30 percent of their monthly income for rent.
According to the study, households needed to make approximately $40,000 per year to afford the county’s median priced two-bedroom apartment, which was $1000 per month in 2010.
While rents have decreased slightly in Chicago and Cook County since 2008, they are still up overall during the last half of the previous decade.
The institute predicts the shortage will increase to 233,000 affordable rental units by the end of this decade.