Chicago’s housing shortage is changing how people make decisions.

A recent Zillow analysis shows that a growing share of users are now “dual shopping,” meaning browsing both rental and for-sale listings because neither option feels affordable.

In Chicago, owning in today’s market typically costs about $484 more per month than renting. That is close enough for many households to weigh both options, although homeownership still is the harder of the two for many folks to reach. 

This is what a supply shortage looks like in practice — not just higher prices, but households stuck in between, unsure which path to pursue. The problem is especially acute in the city of Chicago, where the number of homes for sale remains roughly 55% below pre-pandemic levels, according to Zillow. With so few options — and more listings selling off-market — many would-be buyers without all-cash options are being pushed to consider renting instead.

Problem is, it’s now very expensive to rent, too, and people looking for a place to live without forking over a massive down payment are facing fewer options as demand continues to outpace supply, leading to higher prices and fierce competition for what’s available.

Interest rates and taxes play a role, but the underlying problem remains the same: Not enough homes are being built.

In Chicago, fewer than 5,000 new units were completed over the past year — about 0.8% of existing inventory — nowhere near enough to meet demand. To close the gap, production will have to accelerate dramatically in the years ahead. In other words, the city of big shoulders needs to get to work. Chicago doesn’t just need more housing — it needs far more housing, an increase of a scale we haven’t seen in years. That won’t happen if lawmakers don’t get more obstacles out of the way.

The Chicago area ranks among the three worst metros in the nation for housing underproduction, behind New York and Los Angeles, according to a 2022 report from nonpartisan group Up for Growth, and the gap has not improved meaningfully since then.

“We’re short on housing in Chicago, and we don’t need 30-unit apartment buildings as much as we need 300-unit apartment buildings,” Alan Lev, chairman of real estate developer Belgravia Group, told Bloomberg. “There’s just not enough being built.”

It’s not just the city where it’s hard to find housing; pressure is spilling into nearby suburbs, too. 

Home prices in Evanston are up a hefty 6% year over year as of March, according to reporting by Evanston Now. In neighboring Wilmette, home values have risen by 11% over the same time frame. Rent reflects that reality.

Our area is supposed to be an affordable alternative to the likes of New York, D.C. and LA — a Midwestern oasis where you can get the cosmopolitan benefits of the coasts without the sticker shock. But the numbers tell us that reality is slipping away.

Smart politicians are starting to recognize this. Though he ultimately lost to longtime state lawmaker Sara Feigenholtz in the primary race for Illinois’ 6th Senate District, Nick Uniejewski elevated housing affordability as a central issue in a primary where many candidates focused on national politics. He asked a question voters increasingly are asking: Why aren’t we building more, and why does it cost so much to build here in the first place? Uniejewski pointed to outdated construction and building codes that “unnecessarily drive up costs and limit what can be built,” a fair target for criticism.

Thankfully, momentum is building in Springfield to do something about the problem. Gov. JB Pritzker unveiled in his Feb. 18 budget address a housing abundance package calling for more new housing and incentivizing construction. Bills that emerged afterward would speed up permitting and require municipalities to require accessory dwelling units — notably without a requirement that these so-called “granny flats” be built by union labor.

Parts of these proposals go too far, including a push to effectively end single-family zoning for lots over a certain size. Good luck getting that to fly.

But confronting our housing problem is essential, and we’re encouraged that this conversation is happening in Springfield. Ours is a problem of red tape and protectionism; fixing it will require significant changes in the way business gets done here. Developers face a gauntlet of zoning rules, permitting delays, high construction costs, expensive property taxes and local political hurdles, all of which slow or shrink projects before they ever get built.

Chicago has a housing shortage, yes. But so far, there’s too much lip service being paid to the problem and not enough action treating it as the crisis it is. Until that changes, area residents will keep paying more — whether they rent or buy.

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