CHICAGO — Demand for
affordable rental housing for lower-income households in Cook County outpaces
supply, according to a new report from DePaul University’s Institute for
The findings show an
affordability gap, between demand and supply of affordable housing in suburban
Cook County, increased by 25 percent between 2007 and 2011. The city of Chicago
experienced an 8 percent increase in the gap during the same time.
“After the housing
crisis, households shifted to renting for a number of reasons,” said Geoff
Smith, co-author of the study and executive director of the institute,
affiliated with the Driehaus College of Business. “The weak economy, homes lost
to foreclosure, increased difficulty receiving a mortgage, a lack of confidence
in the housing market and flexibility with renting all contributed to a boom in
the rental housing market.”
Northern Cook County
suburbs, including Evanston, Skokie, Palatine and Hoffman Estates, experienced
the largest contrast between supply and demand of housing available for
The consequences of a
lack of affordable rental housing to meet demand means a growing number of
households are allocating a higher portion of their income towards rent, Smith
considered “rent burdened” if they spend more than 30 percent of their monthly
income toward rent. In Cook County, the number of rent-burdened households
increased by nearly 14 percent between 2007 and 2011.
In the wake of the
housing crisis, the DePaul study found both Chicago and suburban Cook County
experienced an increase in households renting and a decline in home ownership.
The amount of renters
grew by 10.3 percent in the city and 11 percent in the suburbs between 2007 and
2011. During the same time, owner-occupied homes decreased by 11.6 percent in
the city and 5.9 percent in the suburbs. This mirrored a national trend marking
an increase in renters every year since the housing crisis began in 2007.
A key finding of the
study showed an increase in low-income renters drove Cook County’s overall
rental growth. In the city, renter households making less than 50 percent of
the area median income (AMI), or less than $37,400 a year for a household of
four, accounted for 70 percent of the increase in the number of renters
overall. In the suburbs, people making less than 50 percent of AMI accounted
for nearly all of the increase in households renting since 2007.
Of the countywide
renters, 56 percent make less than half of the area median income, the study
showed. Renting households in Cook County increased among every age group.
However, the study uncovered a nearly 10 percent increase in 25-to-34-year-old
Additional findings in
the study showed the growth of single-family rental homes in Cook County. Single-family
homes originally built for owner occupancy but used as rental properties
increased by 30 percent in suburban Cook County and by 21 percent in the city
characteristics related to Cook County’s rental housing demand can be
geographically segmented into strong, weak and transitional submarkets,
according the study. Traditionally, strong submarkets saw overall growth as a
byproduct of increased rental demand, while weak markets saw an overall decline
in demand for both rental and owner-occupied housing and rising vacancy levels.
Transitional markets remain largely owner occupied, but saw recent dramatic
increases in renters.
“The appropriate rental
housing policy responses will vary in each of these market types,” Smith said.
“In strong markets, keeping housing affordable is the challenge, while in
weaker markets the focus is on community development and rebuilding demand. In
transitional markets, understanding whether the increase in rental demand is
short- or long-term will inform the appropriate policy response.”
The Institute for
Housing Studies is a research center based at DePaul University. It provides
analysis and data to inform housing policy and practice. The complete 2013 Cook
County State of Rental Housing report is available as a download at
housingstudies.org. Sarah Duda, assistant director for the Institute for
Housing Studies, co-authored the study.