Chicago
“Critical mass”: Why Chicago developers are looking south for deals
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Here’s how Chicago is trying to get more family-sized rentals
Developers work to address this shortage in city’s multifamily inventory
Public officials are working to entice developers to alleviate a shortage of family-sized rental units in Chicago.
Growing households have often struggled to find sufficient space in the city, making suburbs the only practical option when kids come into the picture. However, there’s been an increase of rental housing developments geared toward families, offering two-bedroom floors plans or larger to address a void in Chicago’s multifamily inventory, the Chicago Tribune reported.
Chicago’s Department of Housing has tried to nudge more developers into building larger units by crediting them for more than one affordable unit that counts toward its required allotment of rent-regulated housing for new development if they turn a smaller apartment into a multi-bedroom floor plan. This allows developers to more easily meet the city’s Affordable Requirements Ordinance when building larger homes. It’s been easier to steer projects to take that approach if they’re receiving city funding, though, the department said.
Plus, some argue that the lack of family-sized apartments in Chicago can simply be attributed to supply and demand. Families often voluntarily move to the suburbs, while younger demographics more suited to smaller units want to live in the city.
Newly constructed apartment buildings have been predominantly made up of studio and one-bedroom units, according to a 2020 report from the Chicago Department of Housing. Such units made up 75 percent of affordable apartments that were either delivered or under construction through the city’s affordable housing requirements, while 5 percent were three-bedrooms or larger.
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“Critical mass”: Why Chicago developers are looking south for deals
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When it comes to affordable units both newly developed and preserved from 2014 to 2021, 38 percent had two or more bedrooms, the outlet reported. That figure jumped to 45 percent between 2022 and 2023, but it would have been higher if it wasn’t for all the apartment rehabilitations taking place that counted toward the total, which comprised mostly studio and one-bedroom units, the outlet reported.
The Illinois Housing Development Authority has been incentivizing larger units for more than a decade, providing higher scores for developers applying for low-income housing tax credits.
More projects are starting to address the shortage of family-size apartments, too. Earlier this month, construction started on Encuentro Square — an 89-unit affordable housing development in Logan Square, with 70 units being family sized.
— Quinn Donoghue