Chicago’s tight apartment market and skyrocketing rents have many reasons, but one that’s plain to see is below: red tape and documentation headache for landlords.
I recently rented a simple apartment in Chicago. Below is the list of documents I had to sign or that were delivered to me, most of which are required by Chicago, Cook County or state law. Over 80 pages of them.
A big, professional property manager in a high-rise like where I signed can tolerate this. They no doubt can afford good lawyers and the process for doing most of this online. But it’s surely an impossible task for smaller landlords to afford and keep up with. If they make a mistake they might be in legal trouble. Owning rental property is a pain under any circumstances, as those of you who have done it know. This only makes it much worse.
And who reads this stuff? Not me, and I’m a former lawyer. I just read the key terms in the lease. I doubt anybody digests all the rights and information for tenants in the other documents.
More headaches for housing providers mean less housing and higher rents — a plain fact our politicians don’t understand.
In case you are wondering, getting a place in Chicago doesn’t mean I’ve decided it’s a shining city on a hill. I wanted to be closer to some of the people we write about, and we will be closer to the nursing home where my wife’s mom lives.
-Mark Glennon
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
YE GODS AND LITTLE CATFISH!!!!!
I think my wife and I signed less documents buying our new car this spring than you did. That’s 26 damned documents before you even get to paying for electricity, water, or anything else related to the apartment.
It’s been eight years since we signed an apartment lease until our new home was built in our new home state, but I don’t recall reading through 26 separate sets of documents.
Again, I wish I could upvote my own comments. (I know I can’t.)
My comments are not only educational, but my spelling is terrific!
There’s a good USA Today article (published May 5, 2024)–Why Fraudsters May be Partly Behind Your High Rent. “Since the pandemic, rental fraud has exploded nationwide…The fraud occurs when people use false identities to rent an apartment under false pretenses or for criminal purposes…fraudsters deal drugs, traffick sex, rent out units they don’t pay for, destroy apartments etc. etc.” “Synthetic fraud uses a mix of real data like a Social Security number or other personal information with fake data to create a false identity. The mix of real and fake data makes it difficult to detect….You have to invest in… Read more »
The owner-occupant landlords have yet more fears and concerns: the tenant who signs the lease, moves in, and brings several more people into unit than disclosed on lease. Or repeatedly damages property, or disables the smoke detectors, or smokes despite prohibition. Or operates a visitor-dependent home-business. Or is disruptive, noisy, and/or cause of police actions. Or owns a vicious dog, and/or refuses to clean-up after their pet. Or fails to pay timely full rent amount, and/or stops paying rent altogether, but still occupies unit. Or falsely claims unit has “ordinance violations” to evade rent.
I owned and lived in a two-flat in Chicago. In my opinion, it is much too dangerous to be an owner-occupant. Yes, we had good tenants too. But all it takes is one bad tenant to put you and your family in serious danger. And we screened carefully too. “Nearly all respondents (93.3%) to a survey of members of the National Multifamily Housing Council (NMHC) and the National Apartment Assn (NAA) representing 75 leading apartment owners, developers, and managers, reported experiencing fraud in the past twelve months…” Any housing provider can be the victim of tenant fraud. Any homeowner can… Read more »
Whether it is a two-flat, an apartment complex, or a condo association, it is really hard to enforce a no-smoking policy. At least it was when I lived in Chicago. For a year my husband served on a condo board. Some of the nonsmoking unit owners were distressed because some owners and renters were smoking in the hallways. At that time the most we could do was put up signs saying NO SMOKING IN COMMON AREAS to remind residents of the rules. Smoking is a serious addiction, and most smokers don’t care how bad it smells or that cigarette smoking… Read more »
This article ought to be on the front page of the Wall Street Journal, Fed Ex’d to the Secretary of HUD, and overnighted to the President’s Chief of staff. Who in the world wants to be in the housing business with this nonsense required?
I believe this is, or is part of, the cities (DOH) Chicago Residential Landlord and Tenant Ordinance (CRLTO) but there’s also the RLTO? or maybe they’re the same thing. When you google you get a lot of links for lawyers, who’da thunk
(https://www.chicago.gov/city/en/depts/doh/provdrs/landlords/svcs/residential-landlord-and-tenant-ordinance.html)
Thank you for publishing this.
Like I said before, housing providers are targets for lawsuits. The paperwork and red tape are astounding. Did not know you were a lawyer. Must come in handy.
Sincerely, President of the I HATE CHICAGO club.
And you can bet for each one of those crazy line items there’s city, cc or state bureaucrats somewhere making great guaranteed deal livings compliance monitoring and an army of lawyers endlessly bombarding tenants letting them know they can sue for any of those items. Ditto for biz owners large or small….that’s all that’s important, that’s all you got to know folks in ‘the city of the big grift’.
Wow. Horrendous.
Any landlord that puts up with all of this stuff should have their head examined. Sell the property and flee this madness as fast as possible. No return on your investment owning rentals in Chicago.
Wish you’d change your handle to “Leaving IL for ??? in ??? months, can’t wait!!” You’ve been “just not soon enough” for too long now.
I’ve found it’s a good idea not to presume what someone else’s situation is.
It is not just no return on investment. It is the danger of being a small landlord in Chicago. In Feb 2025 two Chicago brothers were finally sentenced for the murder of a Rolling Meadows landlord. These two tenants robbed and then strangled their 76-yr-old landlord and dumped his body in a Englewood sewer.
You think landlords aren’t making a profit in this? Just as Mark is alluding to in the article, this just increases the costs for the renter. They pay more. The big landlords can still be profitable. If they weren’t they would get out of that business and sell their holdings. This would cause a massive supply to be available and lower real estate prices. We are seeing the opposite. Unlike in Florida where hurricane after hurricane is driving up property insurance premiums and deductibles causing more people to list their homes. Supply is up in Florida and prices are down.
The IRR on rentals is close to zero or lower. The teachers’ pension fund should have to invest 35% of their fund for low-cost housing in Chicago. PPF says they will make a profit.
If you want a Florida House, bring down $500,000 or lots more. Lots of homes are over $1 million in South Florida. Lots of huge pension money is buying homes in Florida. You have a much better chance of being mugged in Chicago than being hit by a hurricane in Florida.
Spot on Leaving. My buddy who was in mom & pop real-estate rentals says he only made real money on the appreciation of his rentals after he sold them. Everything else was a wash at best.