Rental market in hip neighborhoods tightens up, causing potential tenants to scramble
The end of summer is always one of the busiest times for the Chicago rental market. Tenants looking to move in September 1st usually start their apartment search around now. But as WBEZ found out, this year those renters might be too late.
A recent apartment showing in Ukranian Village is a prime example. There wasn't much to see in the two bedroom apartment; it was basically empty, except for some boxes and an old dust-covered stove that stood in the to-be living room. There weren't any light fixtures, countertops or cabinets, either.
And yet the property manager showing the unit — Mike Shenouda — seems totally confident that this unit will go, and fast.
"People usually, we usually post an apartment, give it a day, show up that night and usually someone rents it," he said. And that goes for unfinished apartments like this one.
In just under an hour, Shenouda shows a dozen people around the 1100-square-foot apartment. He says business has really picked up over the last year, and monthly rents have skyrocketed. This unit, for example, would have gone for a grand five years ago. Now Shenouda’s asking $1500. Fewer people are buying houses, he says, and that means more renters.
Which is exactly what Megan Russell, one of the potential tenants, is afraid of.
"I’ve been looking for September first and I’ve been looking for two to three weeks. I’ve been on Craigslist non-stop, walking on the streets and calling, and places have been going faster than I could even see them," Russell said.
Russell has lived in Chicago for four years. This time she’s moving in with her boyfriend.
"A couple years ago you could see a place and think about it; now it’s like, if you don’t sign the lease when you see it, you’re screwed," she said.
And Russell’s not alone — other renters WBEZ talked to said the apartment search has consumed their lives. They’re constantly checking Craigslist at work, working all the angles, and even when they rush over to see a place, someone else got there moments before and it’s already gone.
And they all say the same thing: Renting in neighborhoods like Wicker Park, Ukrainian Village or Bucktown is so much harder than then thought it would be.
According to Chicago Magazine real estate expert Dennis Rodkin, the boost in renters has a lot to do with the decline in young home buyers.
"A lot of people were buying who now realize it’s not quite the best idea," Rodkin said. "It used to be great if you were a young adult, it was easy to buy so people moved into the home ownership market sooner. Fewer of them are doing it. And there’s also an inflow of people who were owners, who can’t afford to own anymore, they’ve been foreclosed, sold at a huge loss, and they’ve converted to renting."
And it's not just the hip, northwest neighborhoods that are experiencing the squeeze. According to Appraisal Research Counselors, 95 percent of apartments downtown and in surrounding neighborhoods were occupied for the first quarter of 2012. Ten years ago, that number was under 90 percent.
According to Rodkin, the competitive rental market in these “zones of hipness” as he calls them, will eventually iron itself out. He says the real problem is the city is short more than 100,000 affordable rental units in low-income areas.
"One thing to keep in mind you’re talking about problems in middle and upper income North Side neighborhoods," Rodkin said. "More apartments are being built for upper middle income and wealthy people all the time. And that’s going to lead to a problem — we have a surplus but we have an enormous deficit, a massive deficit of rental apartments for people who have low income."
But for those who still want to move to neighborhoods like Ukranian Village, Rodkin says move fast. Remember that unit Shenouda is showing? That little two bedroom under construction?
It rented just two days after he posted it.
He showed another apartment that night just a couple blocks down the street — a two bedroom, two bathroom unit going for $1600 a month.
It became available last minute because the original renter didn’t have good enough credit. That’s great news for Stephanie Sybrandt and Matt Wintz, who are the first to see it.
The couple is getting married soon and nailing down their first apartment hasn’t been much fun.
"It’s a little frustrating because you get used to picturing yourself inside a place and it used to, a couple years ago, be a lot easier," Wintz said.
As they walk around this place, there’s barely a discussion. In the past, they might have slept on it for a few days. Instead they signed an application just minutes later.
But of course, there’s no guarantee. As they walk out the door, there are four more potential tenants waiting to see the place, too.