I set out to write a really simple blog post about affordable housing in Chicago but kept running into dead ends. The data I was looking for was so hard to find that the title of this blog post was originally All Affordable Housing Data Is Crap. But eventually I found something I could use - only after spinning my wheels for far too long.
The Problem With Affordable Housing Data
If you find an article on housing affordability odds are that it's going to rely upon a comparison of median rents/ housing costs to median household income. But averages/ medians are such a high level summary that they don't tell you much. All they tell you about is how the people in the middle of the distribution are doing. They tell you nothing about what is going on with the people above and below those mid-points.
That's why, if you really want to understand housing affordability, you need to see how many people are cost/ rent burdened. Burdened means that more than 30% of your income goes towards housing costs. Severely cost burdened means that more than 50% of your income goes towards housing costs.
That data is out there in dribs and drabs. As usual, the DePaul Institute For Housing Studies has it in their annual State Of Rental Housing In Cook County report - though they don't give you any historic perspective. It turns out that about 50% of Chicago's renters were rent burdened (36% are severely burdened) in 2017, the most recent year for which they had data. That's actually down slightly from 2012 when it was 54%. I had to download one of their data sources and do the calculation myself for 2012. Geez.
That seems like a high percentage but it turns out that for the nation as a whole the percentage was around 47% according to Harvard's Joint Center For Housing Studies - and that includes plenty of small cities/ towns. Once again it looks like Chicago is pretty darn affordable for a big city, although from looking at other DePaul data I get the impression that the incidence of rent burden is higher in the lower income Chicago communities. Unfortunately, DePaul doesn't provide that data directly.
Regardless, for these rent burdened folks the idea of having enough money left over each month to save up a down payment for an eventual home purchase is probably a far off dream.
#RealEstate #ChicagoRealEstate #ChicagoHomePrices #AffordableHousing
Gary Lucido is the President of Lucid Realty, the Chicago area's full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider's view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.