Chicago Rental Market Stats Ordinances and Resources cover

Chicago Rental Market Stats, Ordinances & Resources

Everything you need to know to be a landlord in Chicago
The rental market in Chicago is complex and dynamic. Rent prices have been rising since before the recession, but new inventory and tenant turnover may change things. Ordinances can be tenant-friendly, but find out what you need to know to navigate through them. We provide everything you need to be a landlord in Chicago. All the resources at your fingertips.

This guide supported by Krain Residential & Investment Real Estate

What are rent prices like?
Rents in Chicago have been rising since before the recent recession and continue to rise. The continued rise in rents have begun to spook prospective renters. Ask renters in Chicago and they’ll tell you that rent is too expensive, but looking at the data, Chicago doesn’t actually make the list of top ten most expensive cities to rent in. At a median rent for a 1-bedroom just below $1,000, Chicago is well below San Francisco’s median of $2,900 and New York’s median of $2,950.

Rent in Chicago can vary significantly depending on what neighborhood you’re looking at, however. Certain areas can be double the city-wide median, reaching over $2,000 per month for a 1-bedroom. Despite the relative reasonableness of rent prices, for tenants – finding and leasing an apartment can be an exhausting challenge, rivaling the difficulty renters face in New York.

Average rent amount for one bedroom apartments in different Chicago neighborhoods.
Average rent amount for one bedroom apartments in different Chicago neighborhoods
Average rent amount for two bedroom apartments in different Chicago neighborhoods.
Average rent amount for two bedroom apartments in different Chicago neighborhoods

How’s the inventory of available rentals?
Since the recession, Chicago has become extremely low on well-maintained rental inventory. People who would have become homeowner’s have instead decided to rent, creating extremely low vacancy rates across the city. Construction of new apartment rentals also stopped for several years just following the recession, further reducing inventory. The low inventory and vacancy rates have forced tenants to go beyond their budgets and make on-the-spot leasing decisions. An available apartment can be off the market within 24-48 hours! This can be a stressful process for renters as they are forced to make financial decisions on what is most probably their largest monthly expense.

There’s a silver lining for renters, however. The recent housing rebound from this summer has begun transforming some renters into homeowners and creating more turnover in apartments. There is also a boom of new apartment construction, led by several large Chicago developers with an estimated 8,000 new apartment units coming available through 2015. More turnover and new construction should equalize the inventory and vacancy rates in the near future.

Is there market seasonality?
Due to the cold winter months, apartment searches and moving occurs predominantly in the spring, summer and fall with June and July being the peak lease start dates. August also sees significant volume since that’s when students typically head back to school. Volume of rentals may drop up to 50% during the winter months from their peaks in the heat of the summer.

What’s it like being a landlord in Chicago?
For landlords, renting in Chicago has never been easier. Vacancies are low, rents are rising and property values are stabilizing. But any of our customers will tell you it’s still not easy being a landlord. With a burdensome and overly tenant-friendly ordinance, landlords feel that tenants can get away with anything, leaving no recourse at all. Just ask any landlord in Chicago who has has been a victim of the 9-month eviction process. Imagine the pill you’d have to swallow watching a tenant live in your home for free while you’re still making all the mortgage payments.

And although the cost of evictions can leave some landlords financially ruined, the real pain is that tenants can feel that they’re the ones being victimized, suing landlords senselessly and leaving the landlord confused and emotionally drained. A new breed of tenant has also emerged to take advantage of strict ordinances, cleverly referred to as “professional tenants.” These tenants specifically look for and create leasing situations where they can leverage the ordinance to sue a landlord, often for damages in the thousands.

Fortunately, “professional tenants” are still a rarity. For most landlords, a proper tenant screening process resolves most issues. If you’re a landlord in Chicago (or plan to be one), be sure to take a look at the resources, documents and tips below to help you navigate the rental market.

How to be an Awesome Landlord in Chicago
Given the current Chicago rental market, most landlords are capable of finding tenants rather quickly and painlessly. So being an awesome landlord in Chicago is firstly about making sure that the tenant is qualified and secondly about doing your best to keep them in your rental for a multi-year period. Keeping a quality tenant from year-to-year keeps hassles at a minimum and money in your pocket.

  • Screen your tenants.
    We can’t emphasize this enough, but still 60% of landlords take the first tenant.
  • Require a rental application and credit report.
    You’re about to become someone’s largest creditor. You should see how they’ve dealt with credit in the past
  • Check criminal histories.
    Landlords don’t realize they are liable if they rent to a sex offender and there are children that live next door.
  • Show tenants you care.
    Keep the property free of garbage or debris. How you treat your property is how they’ll treat it. Keep the common areas well lit and secure. Ensure that light bulbs are changed regularly and electronic security doors systems are functioning properly. Common areas are the owners’ responsibility in Chicago.
  • Be responsive.
    Handling maintenance and other requests can be a pain. But its far cheaper to respond quickly to tenants showing that you’re on top of it than having to deal with leasing new tenants when they move out.
  • Snow removal.
    Yes, in Chicago there can often be quite a bit of snow. Make sure snow removal is done in a timely manner. If the snow is not removed, unsafe conditions could lead to legal liability if a tenant were to fall and become injured.
  • Offer online services.
    Tenants in Chicago are tech-savvy. They want to pay the rent while sitting on the bus. They want to do things online. Let them. It makes it easier for you too!

Regular maintenance and quick responses to tenant requests are the key to your tenants renewing their leases. Tenants need to know you care about their living conditions.

Chicago Landlord Tenant Ordinance and Requirements

We’ve provided below some of the most relevant components of the Chicago Landlord Tenant Ordinance. These are often areas that landlords get into trouble and can immediately void the lease, or worse, result in a lawsuit for thousands of dollars in damages.

Leasing & Disclosures

  • A written agreement is required for any rental term greater than 12 months. Although, you should insist on having an agreement regardless – just good to have if/when there are disputes.
  • A rental agreement cannot overrule any requirements set forth within the landlord-tenant ordinances. Unlike what most landlords and managers think, tenants CAN terminate the lease at will for these violations.
  • You must notify tenants in writing within 7 days of being served a foreclosure complaint. This is a new requirement since the recent recession.
  • Before a tenant enters into a rental agreement, the any conditions that adversely affect the habitability of the property must be disclosed in writing, typically within the rental agreement itself. These may include any utilities that have been terminated or city citations.
  • Landlords must accept a reasonable sublease, at a fair price, if an existing tenant terminates the agreement prior to expiration. A sublessee can still be subject to your usual screening process.
  • All city, state, and national disclosures must be provided to tenant at the time or prior to the lease being signed. These include: Lead Based Paint Disclosure, Radon Disclosure, Mold Disclosure, Energy Cost Disclosure (heat and electric). A copy of the Chicago Landlord Tenant Ordinance summary must also be provided.

Rent Payments & Security Deposits

  • All security deposits must be held in a separate account from your personal account, or even any other account. The account must be a federally-insured interest-earing account opened within the state of Illinois. You must also provide the name of the bank as well as the bank’s address on the lease.
  • You also must pay interest on the security deposit. The interest rate is determined by the City Comptroller each year in December. For leases that start and end in 2013, the amount is .023%. This interest must be paid, non-compounded, at the completion of each 12-month cycle regardless of whether the lease has expired or not.
  • The security deposit must be returned within 45 days after the tenant vacates the unit. If you intent to withhold any portion of the deposit, then you must provide an itemized list of repairs, with pricing to your tenant within 30 days.
  • A receipt must be provided when a security deposit is taken. The receipt must include the amount, the tenants name, landlords name, the agents name (if there is one) that physically took the deposit, and a description of the property. The receipt must also include the name and address of the financial institution where the deposit will be held. The receipt must be signed by the landlord. Although not required, you should have the tenant sign the receipt and keep a copy for your records.
  • The maximum late fee a landlord can charge in Chicago is $10.00 for the first $500 of the lease amount, then 5% on the balance amount. Example: if the monthly rent is $1,100, you would charge $10 on the first $500 + 5% on the balance ($600 x .05 = $30.00). Therefore, the maximum late fee, per month, would be $40.00.

Maintenance & Responsibilities

  • As a landlord in Chicago you must do one of the following: (1) change the locks for your tenant or (2) give the tenant notice that they have the right to change the locks. This specifically should be documented in the lease. If it is not, and theft were to occur, you could be held liable.
  • You must maintain the habitability of the property. Tenants, for the most part, must have access to heat, sewage services, water and other utilities.
  • You cannot threaten or attempt to oust a tenant from your property without authority of law. This includes changing locks on the tenants, removing their belongings from the unit, tampering with the state of the property, etc.
  • Tenants may withhold rent payments if the property’s habitability is not maintained.
  • Should you decide to go through an eviction process, there are set steps that need to be taken. Any steps incorrectly taken, missed or other steps taken may negatively affect the outcome of the eviction process. Please be sure to work with a professional eviction expert or lawyer.

Failure to comply with security deposit requirements could result in damages of 2X the security deposit amount, plus the principal, plus interest. Failure to comply with other ordinances can void the lease, potentially allow a tenant to live in the property without rent, or even lead to fines and citations.

Disclosure Documents

Landlord Resources