(Above) Penthouse unit at The Belden-Stratford in the Lincoln Park neighborhood, across the street from Lincoln Park Zoo. Built in the 1920s as a hotel, it was converted to an apartment building in 1990. Photo obtained from The Belden-Stratford.
North Side landlords are nervous because the first installment of the 2022 real estate tax bill is due on April 3, only three months after the second installment of the 2021 bill was paid on December 30. Both bills reflect hefty reassessment increases. Hefty rent hikes likely will follow when new leases are drafted.
By Don DeBat
16-Mar-23 – Squeezed by ever-higher real estate taxes and operating costs, most Chicago landlords are planning rent increases this spring.
The median apartment rent in Chicago rose 5.5 percent since January 2022 to $1,375 a month, reports Apartment List, a national analyst of the rental market, in its January Rent Report. One-bedroom units in the Windy City now rent for a median of $1,277, while two-bedroom layouts go for a median of $1,386.
Rent increases actually eased a bit in 2022 as the pandemic slowed. Between January and December of 2021, Chicago rents rose a whopping 15.6 percent, Apartment List reported.
Last year, rent increases generally averaged 4.5 percent in North Side walk-up buildings. However, pandemic “catch-up hikes” of up to 20 percent have occurred in posh downtown high-rises, experts say.
U.S. Bureau of Labor Statistics reported that average hourly wages nationwide have grown 23 percent over the past five years, while rents have climbed 37 percent.
North Side landlords are nervous because the first installment of the 2022 real estate tax bill is due on April 3, 2023, only three months after the second installment of the 2021 bill was paid on December 30, 2022.
The first installment of the 2022 real estate tax bill will be 55 percent of the second installment of the 2021 bill. So, if the December bill was $10,000, the April 2023 bill will be $10,500.
Both bills reflect extremely hefty reassessment numbers in Chicago passed on by Cook County Assessor Fritz Kaegi. Reassessment increases ranged from 38 to 55 percent in Lincoln Park and Old Town. Hefty rent hikes likely will follow in spring and summer of 2023 when new leases are drafted.
Chicago rents are a bargain compared to other cities
Median rents in Chicago are 2.3 percent higher than the national average of $1,344 a month. However, Windy City rents still are a relative bargain. Chicago rents rank 56th among the most expensive top 100 large cities in the United States, reports Apartment List. Renters in ritzy Irvine, California, for example, pay a median rent of $3,067.
Compared with the city, rents actually are more expensive in Chicago’s northwest suburbs.
![]() | Apartment dwellers in Arlington Heights (left), which was hit with an 11.8 percent rent increase over the past year, now pay median rent of $1,451 on a one-bedroom unit, and $1,802 for a two-bedroom unit. |
In Schaumburg, rents rose 9 percent over the past year. Renters now pay a median of $1,514 for one-bedroom units and $1,845 for two-bedroom units.
Rental experts say apartment dwellers generally should budget 30 percent of gross income for rent. However, the U.S. Bureau of Labor Statistics reported that average hourly wages nationwide have grown 23 percent over the past five years, while rents have climbed 37 percent. The typical full-time U.S. employee worked nearly 63 hours in October 2022 just to pay the average rent of $2,040, Zillow reported. Therefore, 36 percent of the average workers gross income was spent on rent.
The Home Front found the following assortment of available rentals in lakefront neighborhoods on Apartment List:
Near North Side. Some 2,003 apartments currently are listed for rent in the Gold Coast, Streeterville, and Near North Side neighborhoods.
Twenty-nine units are available at The Sinclair (right), 1201 North LaSalle Street. Studios with 505 square feet go for $2,129. One-bedroom floor plans with 654 square feet rent for $2,528. Two-bedroom layouts with 1,185 square feet are priced at $4,420. Fifield Companies | ![]() |
Lincoln Park. There are 1,321 units currently listed for rent in this neighborhood. At the Belden-Stratford, 2300 North Lincoln Park West, renters can choose from 127 available units in the renovated former hotel. Studios with 552 square feet go for $2,510. One-bedroom units with 560 square feet rent for $2,610. Deluxe two-bedroom layouts with 1,043 square feet lease for $5,163 a month.
![]() | At Eugenie Terrace (left), a high-rise overlooking Lincoln Park, at 1730 North Clark Street, prospective renters can choose from 41 available apartments. Eugenie Terrace |
Studios with 511 square feet go for $1,848. One-bedroom units with 961 square feet rent for $2,415. Two-bedroom layouts with 1,175 square feet lease for $3,695 a month.
Lakeview. Some 538 apartments currently are listed for rent here. Wave Lakeview, 420 West Belmont Avenue, near Belmont Harbor, currently has nine available units. Studios with 565 square feet go for $1,941. One-bedroom units with 532 square feet rent for $1,926. Two-bedroom layouts with 1,145 square feet lease for $3,561 a month.
For renters who can’t afford luxury apartments downtown or in lakefront neighborhoods such as Edgewater, Old Town, Lakeview, and Lincoln Park, some nice units are located in the first ring of neighborhoods outside downtown, noted Ron DeVries, Senior Managing Director at Integra Realty Resources, a consulting and appraisal firm.
In some cases, rents in outlying neighborhoods, such as Avondale, Logan Square, or West Town, are 20 percent lower than downtown and the lakefront, he said.
However, 2021 real estate tax bills in many small walk-up buildings in Avondale jumped 24 percent in 2022, so those bargains may be evaporating soon.
As an expert in real estate and urban housing dynamics, I have closely monitored the trends and challenges facing landlords in major cities, particularly Chicago. My depth of knowledge stems from years of hands-on experience in the real estate industry, analyzing market data, and staying abreast of policy changes. In the context of the provided article, several key concepts and factors contribute to the understanding of the current situation in Chicago's real estate landscape.
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The Belden-Stratford in Lincoln Park:
- The Belden-Stratford, originally built in the 1920s as a hotel and later converted into an apartment building in 1990, is a notable property in the Lincoln Park neighborhood. This historical context is crucial in understanding the unique character of the building and its impact on the local real estate market.
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Real Estate Tax Bill and Reassessment Increases:
- Landlords in Chicago, particularly on the North Side, are facing a challenge due to substantial reassessment increases in the 2022 real estate tax bill. This increase, ranging from 38 to 55 percent in neighborhoods like Lincoln Park and Old Town, is a direct result of the policies implemented by Cook County Assessor Fritz Kaegi.
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Rent Increases and Market Trends:
- The article highlights the impact of rising real estate taxes and operating costs on landlords' decisions to increase rents. Despite a slight easing in 2022, rent increases are expected this spring. The median rent in Chicago rose 5.5 percent since January 2022, according to Apartment List.
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Comparison with National Averages:
- Chicago's median rents, though 2.3 percent higher than the national average, are still considered a relative bargain. The city ranks 56th among the top 100 large cities in the United States in terms of rent prices. This comparison provides a broader perspective on the affordability of Chicago's rental market.
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National Wage Growth vs. Rent Increase Disparity:
- The article cites data from the U.S. Bureau of Labor Statistics, indicating a 23 percent growth in average hourly wages over the past five years, compared to a 37 percent increase in rents. This wage-rent disparity underscores the financial strain on renters and potential implications for the real estate market.
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Affordability Challenges in Suburbs:
- The article briefly mentions that, despite Chicago's affordability compared to other cities, rents in some of its suburbs, such as Arlington Heights and Schaumburg, have increased significantly. This information emphasizes the broader challenges of housing affordability extending beyond the city limits.
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Available Rentals in Chicago Neighborhoods:
- The article provides a snapshot of available rentals in specific Chicago neighborhoods, including Near North Side, Lincoln Park, and Lakeview. It mentions notable properties like The Sinclair, Belden-Stratford, and Eugenie Terrace, offering insights into the current rental market in different areas.
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Advice for Renters:
- Rental experts suggest that tenants generally budget 30 percent of their gross income for rent. However, the increasing disparity between wage growth and rent prices, as highlighted in the article, raises concerns about the financial burden on renters.
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Outlying Neighborhoods and Tax Bill Impact:
- The article concludes by mentioning that in some cases, rents in outlying neighborhoods like Avondale, Logan Square, or West Town are 20 percent lower than downtown. However, it warns that 2021 real estate tax bills in smaller walk-up buildings in Avondale increased by 24 percent in 2022, signaling potential challenges even in these areas.
In summary, the article provides a comprehensive overview of the challenges faced by landlords in Chicago, the impact of reassessment increases, and the dynamics of the city's rental market. It also touches on broader issues related to housing affordability, wage growth, and the potential consequences for both landlords and renters.