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Will More High-End Apartments Curb Chicago's Record-High Rents?

By Gwendolyn Purdom in News on Aug 18, 2016 8:11PM

The average rent for one of the city's high-end apartments spiked 3.8 percent from last year , reaching a record $3.03 per square foot, according to research from consulting firm Appraisal Research Counselors. Crain's is reporting the sky-high numbers will likely continue, even as the city adds somewhere in the neighborhood of 13,000 new rental units to the market over the next two years.

Chicago came in at No. 14 in a recent ranking of cities adding the most new apartment units this year, and while its inventory is nowhere near leader Houston's 25,935 units, the 8,000+ units our city is adding—many of them downtown or in that jungle of construction cranes, River North—could affect how much landlords are able to charge. Supply is catching up to demand: Occupancy rates in downtown units hit 94.8 percent in the second quarter of 2016 but as competition continues to rise, landlords may find themselves needing to offer incentives to fill their buildings.

Of course, that's not a guarantee. As Crain's points out, a steady rate of job growth could bring more renters to the table, thereby keeping those new units desirable and the city's rental market super expensive.

[h/t: Crain's]