Demand Fuels Further Growth in Chicago
By Alexandra Pacurar - Multi-Housing News
Multifamily rents are increasing at the fastest pace since November 2016, reaching 1.8 percent year-over-year as of June.
Rent growth in Chicago has picked up due to increased demand, reaching 1.8 percent year-over-year as of June—its highest value since November 2016. This was mainly driven by a rebound of the higher end of the quality spectrum, as rent growth for luxury apartments recovered from the negative values registered during last year’s final quarter. Meanwhile, Chicago’s development momentum is expected to continue, with more than 10,000 units slated for delivery in 2018, which could mark a new cycle high.
Chicago is facing a talent gap in the booming technology sector, as professionals are migrating toward coastal hubs, according to a LinkedIn report. This is doubled by the city’s steady population decrease and the 5,400 jobs in information and professional and business services lost in the 12 months ending in April. However, with companies such as Google and Facebook expanding their footprints, the downtown area continues to attract Millennials and Gen Zers looking for well-positioned apartments.
The metro continues to struggle with affordability issues, prompting local authorities to set up a $30 million fund for the creation of 300 affordable units in Chicago’s core districts. An almost complete lack of new workforce housing supply coupled with a healthy demand for urban units will lead to accelerated rent growth, estimated at 2.8 percent for the whole of 2018.