By Don DeBat

6-Aug-24 – Apartment rent increases in some of Chicago’s upscale lakefront neighborhoods may soon reach double-digit levels, national apartment experts report.

Rental analysts say the steep increases in median rents can largely be traced to the continued spike in property taxes and higher operating expenses that must be passed on by landlords.

According to Redfin, a national real estate brokerage firm, catch-up rent increases can be heftier during the spring and summer. For example, between March and June of this year the median asking monthly rent in Chicago rose 7.1 percent, a Redfin survey reported.

“Rents are on the rise in Chicago,” said Dr. Daryl Fairweather (left), Redfin’s Chief Economist. In some Chicago neighborhoods, rents rose 11.3 percent between June 2023 and June 2024. That’s the nation’s fourth-biggest increase year-over-year, behind Virginia Beach, Cincinnati, and Washington, D.C.

An average Windy City apartment that rented for $1,000 a month in March 2024 now would list for $1,120 a month – a 12 percent boost in price, Redfin said.

In June 2024, the typical cost of apartment rent in an upscale building on Chicago’s North Side lakefront was $2,200 a month, reported the Zillow Observed Rent Index, which measures changes in asking rents over time.

Luxury rents in downtown Chicago and on the city’s Near North Side also are on an upward elevator ride, reported Luxury Living Chicago, a high-end rental apartment leasing firm.

Rents for top-tier apartments rose 3 percent year-over-year this spring, pushing the average monthly rent for a downtown Class A apartment above $3,100 for the first time ever.

The posh Streeterville neighborhood posted the highest average rents at $3,454, trailed closely by Gold Coast/Old Town at $3,445, and River North (right) at $3,426, according to the Luxury Living Chicago report.

Young professionals in their late 20s and early 30s with high-paying jobs make up a large segment of the renter profile for these Class A buildings. The minimum annual income threshold for most of these ritzy apartments is $75,000, though the average income in the newer luxury buildings is about $120,000.

Other neighborhoods more affordable

In June, the hot Near West Side apartment market – also known as ZIP code 60607 – posted a more affordable median rent price of $2,730 a month.

Meanwhile, adjacent ZIP codes have even more moderate rental prices. In ZIP code 60612, covering apartments near United Center on the West Side and parts of Garfield Park, median rent was $2,237 a month.

Thrifty apartment seekers are advised to shop in ZIP code 60608. In this area – encompassing the Lower West Side, Little Italy, and Bridgeport neighborhoods on the West and Southwest sides – median rental costs were almost $1,000 a month lower at $1,770 a month.

Assessor hard at work

Cook County Assessor Fritz Kaegi’s staff has been busy all spring and summer boosting triennial reassessments in Chicago.

In early April, The Home Front reported that apartment renters in Rogers Park should brace themselves for hefty spring and summer 2024 rent increases because of the lofty property tax reassessment numbers recently released by the Assessor.

Kaegi said 2024 assessed values of large multifamily apartment properties grew to $213.04 million (before appeals), up an exorbitant 46 percent from $145.63 million in 2023.

In Rogers Park Township (left), large multifamily apartments drove a significant increase in assessed values, Kaegi said. Photo by 606 Vision

Rogers Park is bounded roughly by Lake Michigan on the east, Howard Street on the north, Ridge Avenue on the west, and Devon Avenue on the south. It includes about 800 commercial apartment buildings that each contain more than four units.

In Chicago and Cook County, commercial properties are assessed at a whopping 25 percent of market value, while single-family homes and small apartment buildings are assessed at 10 percent of market value.

In late May, the Assessor released the initial assessments on residential and commercial properties in West Chicago Township, showing a 27 percent jump in total assessed value over the past three years.

Median multi-family apartment values have soared 20 percent in West Chicago Township since 2021, the Assessor reported. The community has 7,168 commercial multi-family properties containing more than four units. The boundaries of West Chicago Township are the Chicago River on the east, North Avenue on the north, Pershing Road (39th Street) on the south, and Harlem Avenue on the west.

Experts say apartment dwellers in the neighborhoods of Austin, Bucktown, East and West Garfield Park, Humboldt Park, Near West Side, North and South Lawndale, and Wicker Park should expect hefty rent increases this year.

On July 2, the Assessor released the initial assessments on residential and commercial properties in Lake View Township (right), showing a 27 percent jump in total assessed value over the past three years. Photo by 606 Vision

Lake View is bounded by Lake Michigan to the east, Devon Avenue to the north, Western Avenue to the west, and North Avenue to the south. Renters in the neighborhoods of Edgewater, Lake View, Lincoln Park, Uptown, and the eastern sections of Lincoln Square and North Center should expect rent increases.

Median single-family home values in Lake View rose 19 percent to $1.058 million. Median condominium values rose 17 percent to $301,000. Median multi-family apartment values have risen 8 percent to $867,000 in the township since 2021, the Assessor reported.

• More info: Luxury Living Chicago