The proposed “Bring Chicago Home” tax increase is likely to lead to higher rents.
- This 167–300% increase in the cost of selling a property will hit small and mid-sized owners particularly hard: three out of four respondents (74%) indicated that they were more likely to raise rents to make up that shortfall in proceeds.
- Almost half (46%) of respondents were more likely to defer capital improvements and renovations should the tax increase be enacted.
The market continues to see a “tale of two cities,” with respect to performance.
- The South and West sides continue to see large numbers of buildings with unstable rates of collections, with only 30% of buildings reporting stabilized collections (more than 95%).
- The North side and downtown continue to have strong collection numbers, with 70% reporting stabilized collections (more than 95%).
- While few buildings have collection levels that could suggest that they are at some risk of foreclosure (i.e., less than 75%), the situation was again different in the two areas. Among buildings on the north side and downtown, only 2% had collections less than 75%. Among buildings on the south and west sides, however, 14% of respondents responded that their year-to-date 2023 collection rates from tenants were at levels indicating some risk of foreclosure (i.e. less than 75%).
- 38% of respondents indicated they do not have any vacant units available.
- Further, nearly 85% of respondents indicated they have between 0-5% of rental units available in their portfolios.
- There was no significant variance between buildings in different parts of the market.
About the Survey
The Neighborhood Building Owners Alliance (NBOA), in cooperation with its affiliate members, and Kiser Group conducted an online survey of 235 Chicago housing providers to determine the current state of the City’s rental housing market. The survey was conducted September 11th through September 18th, 2023.
As a continuation of several quarterly NBOA surveys conducted since October 2020, this survey continues to collect important data on rent collections and vacancies in Chicago’s neighborhood housing landscape. The survey gathered information from respondents about the type of buildings they owned, the size of their portfolio (by number of housing units) and the location of those buildings.
Profile of Survey Respondents
The respondents collectively own approximately 50,000 rental units throughout Chicago. As was the case with previous survey iterations, approximately 70% of the respondents consisted of small and mid-sized housing providers who own fewer than 100 rental units. Approximately 60% of the respondents own ten (10) or fewer buildings. Further, nearly three out of four respondents (72%) reported owning fewer than 20 properties. As such, this survey is representative of Chicago’s smaller to medium-sized housing providers who make up the bulk of the City’s rental housing stock.