Housing report

Chicago Affordable Housing Report Scores Better Than Peers

Fannie Mae researchers place Chicago in a group of “mature economy” urban areas that have experienced slow population and income growth. But housing costs have also risen slowly, leading to increased affordability, according to the report, which looks at both rental homes and homes for sale.

The researchers created a “housing need score” for eight different metropolitan area groups, giving the Mature Economy category – which also includes Boston, Philadelphia and Washington, DC – the third-lowest score.

Groups with the highest need scores include cities like Miami; San Diego, California; Hartford, Connecticut; Memphis, TN; New Orleans, Louisiana; Austin, TX; Dallas and Denver. The study also finds that some of the least affordable metro areas are in smaller markets like Bakersfield, California, and El Paso, Texas, where affordable housing construction has slowed due to population loss.

The report confirms one of Chicago’s biggest advantages over other major US cities: it’s a relatively affordable place to live. That should be a strength, giving Chicago an edge when it comes to attracting business and talented workers, even at a time when stories about crime and other issues have tarnished its reputation.

But Chicago still lack of affordable housing, although the problem has subsided. A 2021 report from DePaul University’s Institute of Housing Studies found that the affordable rental housing gap in Cook County narrowed between 2012 and 2019.

But demand for affordable rental housing still exceeded supply by 159,000 units in 2019. And housing in many Chicago neighborhoods remains out of reach for low- and moderate-income people.

Like the DePaul study, the Fannie Mae report examines the housing market from 2019, before the COVID-19 pandemic. The housing market has changed a lot since then, and not necessarily for the better.

“Even with the recent slowdown in house price growth and reduced demand caused by inflation and rising interest rates, the surge in rents and house prices since 2019 has been devastating for families. who work,” said Jeffery Hayward, vice-director of Fannie Mae. president and chief executive, wrote in a recent blog post on the report. “And the only way out of the supply crisis is to create more housing and preserve the affordable housing that we already have.”

Chicago Mayor Lori Lightfoot has created affordable housing a priority of his administration, passing changes to the city’s Affordable Requirements Ordinance and rolling out a $1 billion package in public and private funds for the creation and preservation of affordable housing last year.

The Chicago metro area ranks higher than many of its peers on a key metric: the number of “cost-overloaded” households, that is, renters or homeowners who spend more than 30% of their income for accommodation. Of the 30 most populous U.S. metropolitan areas, only four had a lower rental cost than the Chicago area in 2019, according to the Fannie Mae report. Chicago ranked in the middle for home-owning households, with the 15th highest cost burden.