Foreclosure Crisis Impacts Chicago’s Rental Housing Market

The report found that the present foreclosure crisis in the City of Chicago impacts not only the market for single family homes, but also the market for rental housing.

Key findings include:

 • Over 35 percent, or over 4,800, of the nearly 14,000 overall 2007 foreclosure filings in the City of Chicago were on 2- to 6-unit multifamily properties.

 • Depending on the number of units in each property, these foreclosures could impact between 9,644 and 28,923 housing units.

 • Foreclosures on 2- to 6- unit multifamily buildings were concentrated in certain neighborhoods.  For example, in West Garfield Park, over 86 percent of the 2007 foreclosure filings were on 2- to 6-unit buildings, and in North Lawndale nearly 80 percent of the 2007 foreclosure filings were on 2- to 6-unit buildings.

 • Eight of the ten community areas with the highest number of foreclosures on 2- to 6-unit buildings were community areas that also experienced recent losses in renter occupied housing units.

Between 1990 and 2005, the supply of affordable rental housing decreased by an average of 9,000 units each year, due to factors such as condominium conversions, demolition, or previously affordable units increasing rents to market rate. 

Although the demand for affordable rental housing in the region has also declined in recent years, this decline has not been as sharp as the decrease in supply.   In 2000 it was estimated that the demand for affordable rental housing in exceeded the supply by roughly 34,000 units.  By 2005, this imbalance had increased to 114,000 units.

It is clear that rising levels of foreclosures are adding stress to the already strained affordable rental housing market.