Jul 1, 2023 - Real Estate

Built-to-rent housing is on the rise in Chicago

Illustration of a plywood house that is also an upward arrow.

Illustration: Maura Losch/Axios

Chicago is one of the top 19 metros in the U.S. adding the most new single-family homes for rent, data show.

Why it matters: Built-to-rent housing offers a new home with property management perks, and without the need for a down payment or long-term commitment, Axios' Felix Salmon reports.

What's happening: Those houses have found a growing niche among would-be buyers who can't afford — or find — a single-family home, and those opting not to buy for lifestyle reasons, Doug Ressler of real estate research firm Yardi Matrix tells Axios.

Driving the news: The Chicago metro's built-to-rent supply almost doubled in the last five years, surging by 76%, per a recent report from listing service RentCafe.

  • Also, the trend is expected to persist. Chicago made the top 30 for the number of such homes currently under construction, per the data.

Zoom in: Construction is extending north toward Milwaukee, where it's easy to build and attractive to remote and hybrid workers who don't want to live in a cramped high-rise, says Ressler, whose firm provides data for RentCafe.

  • The latest: A proposed rental home subdivision in Glenview is still in the early planning stages, says Kim Lyons, developer Core Spaces' communications director.
Single family built-to-rent units planned or under construction, per million residents
Data: National Rental Home Council, U.S. Census Bureau; Chart: Thomas Oide/Axios

By the numbers: In Illinois, there are 193 built-to-rent units planned or under construction per million residents, according to the National Rental Home Council.

  • Nationwide, the average is 345.

Between the lines: The Midwest leads the nation in construction on single-family homes, new building data from the U.S. government shows. Still, the Chicago metro's inventory of homes for sale slid 30% in May from a year earlier, per Illinois Realtors.

The bottom line: Building more single-family rentals isn't going to solve the housing crisis, but it could ease the supply crunch.

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