I’m going to admit right off the bat that I am absolutely terrified of writing this article. The topic of rent control in Chicago has been on my to-do list since it hit the news in early 2018 and every time since then that I’ve looked at that line item I’ve flinched and avoided it. We covered it a little in our newsletter back in March when it was on the primary ballot. It’s never been mentioned in depth in the blog. But nothing going forward in this blog can really be addressed without taking on the matter, and I did recently promise one of my industry colleagues that I would finally go on the record about it, so here we are.
Meet This Article’s Cities
For this article we will be comparing the rental data for a selection of cities and neighborhoods within those cities, each chosen for a specific purpose. We will, of course, be looking at Chicago, which has its own Residential Landlord-Tenant Ordinance.
We will be looking at San Francisco and New York City, which both have RLTOs but also have rent control. Yes, I could have also included Los Angeles and DC. I could have included a lot of cities. I am one person and this article is already long enough as it is. If you want to take this data and run with an expansion that’s totally fine with me. Continue reading Chicago Deserves Better Than Rent Control.
At the July 25, 2018 meeting of the Chicago City Council, Alderman Moreno of the 1st ward proposed an amendment to Chapter 5, section 12 of the city code, also known as the Chicago Residential Landlord Tenant Ordinance or CRLTO. The proposed change is currently in the hands of the council’s Committee on Housing and Real Estate. The amendment would require landlords to provide lease renewals to tenants with specific lead times dependent on the amount their rent will increase in the next term. The times required would be as follows:
- Less than 5%: 30 days
- 5-9.99%: 60 days
- 10-14.99%: 90 days
- 15% or more: 120 days
If a landlord fails to provide the proper amount of notice, the tenants’ existing lease would be extended at the current rate until the proper notice term has elapsed. As an example, if a landlord sends a 10% increase 45 days before the lease expires, the tenant could stay on for an extra 45 days after the lease expires at the old rent rate.
This is Moreno’s second major attempt at rent reform in the past four months. He first flirted with proposing a Good Cause Eviction ordinance in May. We found that idea be well-meant but near-sighted to the point of impracticality. This new proposal suffers from the same failings, and unlike its parent document it’s actually made it to the table of the city council. Continue reading Chicago’s Proposed Rent Increase Notification Law: Expectation vs. Reality
When a renter or home buyer selects their next home it’s usually a decision with a lot of emotions involved. Do you like the layout? How does the landscaping look? Will your kids be safe in that yard? Will you be able to take care of it when you get older?
In contrast, when a landlord buys a building this is generally not the case. While there may be some emotion involved it is considerably less than what comes into play when you’re actually going to live in the property with your family or friends. When a landlord buys a large building it is a financial investment. As one of my mentors once said, “Home buying is 10% logic justified by 90% emotion, but commercial investments are 10% emotion justified by 90% logic.”
Experienced landlords and renters will have very different perspectives on the same building. It’s my opinion that these opposing viewpoints lie at the heart of a lot of landlord-tenant conflicts. So today in the interest of learning about how the other half shops for buildings we will dip a toe into the thought processes of how a landlord goes apartment hunting. Don’t worry, I’ll be starting off easy without too much math or economics. Continue reading Landlord Logic: CAP Rates
As stated in last week’s article about EvictionLab, the month of April has seen two big releases of data from housing focused think tanks around the country. Last week we covered one, and as promised, this week we will look at the second, the “2018 State of Rental Housing in Cook County” released by DePaul University’s Institute of Housing Studies (IHS). Unlike the EvictionLab website which provides mostly data with little commentary, the IHS report provides mostly text-based analysis with some charts and maps as side illustrations. However, as it is focused entirely on Cook County it may be more relevant to the interests of Chicago renters.
We stated last week that we would look at both data releases using the same article structure. Below you will find that we have indeed viewed the IHS release through the same lens that we used for EvictionLab.
Who is the Institute for Housing Studies?
Based out of the DePaul University School of Business’s Real Estate Center, the IHS is a combination of think tank and graduate/doctorate level research facility focused on housing and real estate including residential and commercial property, both purchased and rented. The staff of IHS is a combination of full-time administrators and students of the Business School. A glance at their original 2009 site on archive.org shows that out of the original staff, only Research Director Jin Man Lee remains. The rest have been replaced by new experts and students, as can be expected for an academic group.
While the newer EvictionLab is based out of the department of sociology at Princeton’s grad schools and therefore approaches research from the perspective of sociology and public policy, IHS is more established and rooted in economics, real estate and finance. The difference between the two groups can be clearly seen in their respective websites. EvictionLab is flashy and modern, full of sliding panels and animated maps, designed for mobile access and easy consumption by media outlets. IHS has a more conservative and traditional website although their data is still quite valid. Continue reading IHS’s State of Rental Housing in Cook County: What Chicago Renters Need to Know
A few years ago I heard tell of a wealthy family from India who purchased real estate in a West Loop loft building. There were about five separate multi-generational family clusters all living together. They jointly purchased an entire floor of the building – five or six separate condominiums – and combined them into a single living space. The American-born Realtor who told me of the deal did so with a tone of “can you believe those crazy immigrants would do something like that?” Buried in this attitude, not far below the surface, is an inherent problem between modern US residential building practices and the cultural traditions of the people who live in them.
A lot of news ink has been spilled lately about new construction of apartment buildings in downtown Chicago after a lengthy slow period. In reaction to these stories I see comments about the tiny size of the apartments, the “Transit-oriented design”, and how no average renter will be able to afford this new luxury housing. “Tiny boxes very high up” is how a friend of mine describes them. When you compare these new buildings with the vintage walk-ups that cover the city outskirts you can see the results of a clear shift in American attitudes towards outsiders and towards themselves. Continue reading The Growing Cultural Disconnect in Apartment Architecture