The need for affordable rental housing in Cook County has increased substantially in the last decade and is expected to continue to grow in the coming decade as well, according to a new study issued by the Institute for Housing Studies (IHS) at DePaul University. These trends mirror a national shortage of affordable rental housing.
In the wake of the housing and economic crisis, access to affordable rental housing is critical for the stability and economic security of low- and middle-income families and communities in Cook County. However, in 2009, there was a shortage of 180,000 affordable rental units in the county, an increase of more than 9 percent from 2005. The IHS study estimated that this gap is likely to grow by an estimated 44,000 units by 2020.
“Access to quality rental housing that is affordable to families at a variety of income levels creates economic stability and security for these households, the communities where they live, the businesses where they work and the region’s economy as a whole,” said Geoff Smith, executive director of the institute. “This study shows that there is a growing gap between the number of families in need of affordable housing and the availability of housing, a gap that needs to be addressed.”
Broadly speaking, housing is considered affordable when a family pays no more than 30 percent of its income for shelter. In the IHS report, “affordable rental housing” is defined as rental units affordable to households making $32,931 or less. At this income, families should pay no more than $823 per month for rent.
Other key findings from the report include the following:
• More households are renting again. Between 2007 and 2009, the number of renter-occupied homes increased by nearly 54,000, while the number of owner-occupied homes decreased by more than 63,000.
• Families making less than $35,000 annually pay a larger share of income for housing. Nearly 80 percent of renters making less than $20,000 per year and 75 percent of renters making between $20,000 and $34,000 pay more than 30 percent of their income for rent and basic utilities. The median household income for renters in 2009 was $31,367. This was 43.9 percent of the median household income for owners.
• The foreclosure crisis has affected families that rent. Foreclosures impacted 97,000 rental units in Cook County between 2007 and 2010. Nearly 28 percent of all units in smaller two- to four-unit rental properties in low-income communities have been affected by foreclosure filings.
• Suburban foreclosures on larger rental properties are growing. Foreclosures on suburban Cook County multifamily buildings with five or more units have grown from 12 percent of Cook County foreclosures on such buildings in 2006 to 21 percent of county foreclosures on such buildings in 2010.
“Rental buildings are critical neighborhood anchors, and this report confirms how important this part of the housing stock – most of which is privately owned – is to Chicago,” said Jack Markowski, president of Community Investment Corporation (CIC), a non-profit mortgage lender specializing in financing the purchase and rehabilitation of multifamily apartment buildings.
“To meet both current and future demand for affordable rental housing, we need to find ways to reduce energy costs, cut the red tape on rules and regulations and find better ways to finance the rehab of smaller buildings,” Markowski said.
The study, which can be found at ihs.depaul.edu/reports/CookCountyHousing2011.pdf, is part of a series of IHS reports designed to provide affordable housing practitioners, government housing agencies and community organizations with reliable and impartial data about the state of affordable housing in Cook County and to guide collaborative efforts to preserve this housing.
IHS produces rental housing studies as a key partner in the Preservation Compact, which works to preserve and improve existing affordable rental homes that might otherwise be lost to condominium conversion, demolition or rising costs. The Preservation Compact is coordinated by CIC with support from The John D. and Catherine T. MacArthur Foundation.
About the Institute for Housing Studies (IHS)
The Institute for Housing Studies (IHS) is a multidisciplinary academic and applied research center situated in the Real Estate Center at DePaul University. IHS provides data and analysis to inform affordable housing-related policy and resource allocation decisions. More about IHS and its research can be found at ihs.depaul.edu.
With more than 25,000 students, DePaul University is the largest Catholic university in the United States and the largest private, non-profit university in the Midwest. The university offers approximately 275 graduate and undergraduate programs of study on three Chicago and three suburban campuses. Founded in 1898, DePaul remains committed to providing a quality education through personal attention to students from a wide range of backgrounds. For more information, visit www.depaul.edu.