Renting Over Homeownership: The Benefits for Chicago Residents

The increased demand for rental units is having a positive effect on many Chicagoland communities. What causes these changes and what benefits is the Greater Chicago region experiencing as a result? The catalyst and the results all relate to societal changes.

Home ownership used to be a significant part of the American dream. Young Americans sought jobs that paid viable living wages, companies they could build long-term careers with, partners to start families with, and homes they could call their own. Having children and buying homes were goals, rites of passage to adulthood.

Today, however, the American dream looks significantly different. Across age brackets, people are choosing experiences over possessions. One of the most prominent ways this has manifested is in changing opinions towards home ownership. Fortunately, this changing trend has tangible benefits to metro areas like Chicago.

These changes are natural and nothing to fear; there are, in fact, wonderful byproducts of increased demand from renters.

What Changes are You Seeing in Your City?

Because more people want to rent high-quality apartments in the Chicago area, property owners are responding by creating more and more of these units. The increased supply creates more stable housing prices. Renters have many options to choose from and this prevents scarcity, which leads to rising prices.

This means that if you rent in the Chicago area, it is likely that you’ve had choice during your apartment search, with a number of options in different neighborhoods that meet your needs.

In addition to keeping prices down, property owners offer attractive amenities and bonus features to capture the attention of renters. You don't have to settle simply because you aren’t ready or don’t want to buy a home.

Additionally, with more families, young professionals, and empty nesters in urban areas comes reduced urban blight. The revitalization of downtown neighborhoods is helping to combat urban decline.

Communities are improving while remaining diverse, something that is extremely important to the health of the city at large. These communities comprise both long-term and short-term renters.

Again, increased supply can also help promote diversity. Rentals are available at a variety of price points to meet the needs of the many different types of renters who now shy away from home ownership.

In short, the rental market is a catalyst for current and future growth in the city.

What Does Renting in Chicago Look Like for You?

Do you live in a rental unit in the Metro Chicago area or are you thinking about making this move? You have a lot to look forward to.

From reducing your impact on the environment to experiencing a life full of things to do, eat, see and enjoy, city living looks better than ever.

Downtown Living Is Greener

People who live in the greater Chicago metro area find it easy to use public transportation to commute or do common household errands. Families can often get by without vehicles or with just one instead of two. This significantly reduces your carbon footprint.

Even if public transportation isn't for you, you'll find plenty of local businesses and activities within walking distance of your downtown community. A trip to the museum or park by foot makes you and your community healthier.

This is a lifestyle change we can all get behind.

Enjoy Downtown Activities

Speaking of downtown activities, the greater the demand for public services and utilization of public spaces, the more secure these entities become. The more we use municipal programs and go to subsidized events, the more reason there is for the city to allocate funding to them.

There are endless organizations, clubs, cultural activities, and community festivities to get involved in. This further strengthens communities. The more we get out and interact with each other, the closer we feel to our neighbors.

This not only enriches your life as a renter and downtown resident, but it improves the condition of downtown neighborhoods. People take pride in their community when they feel they play an active role

In many ways, this is as much a part of the American Dream as home ownership.

Urban Renewal without Gentrification

One of the main problems often associated with urban renewal is gentrification. Some of the driving factors behind this problematic trend include a glut of luxury apartments or condos that are cost-prohibitive for all but the wealthiest in Chicago.

Luckily, many property owners choose to meet increasing rental demands by purchasing and deconverting multi-unit condo buildings and making them apartments. This avoids the huge costs associated with tearing down and rebuilding historical buildings in the metro area.

It also changes the resident demographic in these areas. There is more opportunity for new people to move into these areas than there was before the conversion.

Beal Properties is one of the leading property owners responsible for deconverting condo units into rentals. They currently have buildings in several desirable downtown metro communities. Beal views this move as the next step in its long-established history as an active property owner in Chicago. It has enjoyed a 30-year history, during which the team has embraced the many changes we’re seeing in Chicago.

You will find that many desirable Chicago Metro neighborhoods retain their visual character thanks to deconversion. This helps foster more cohesion within these communities and positively affects diversity within them.

This also allows property owners to maintain profitable businesses without completely changing the face of the communities they share. They aren’t changing the face of Chicago, they’re just dusting it off and shaking it up in a beneficial way.

This kind of renewal also creates more opportunities for small businesses. They aren’t driven out or prohibited by soaring rental prices. Additionally, they’ll benefit from increased neighborhood traffic. This type of urban improvement doesn’t exclude the majority of Chicago citizens or the small businesses they need in their communities.

Certainly, some of the apartment units available are luxury apartments. However, there is a wide variety of different apartments available to suit the needs of many different types of renters. Again, variety and supply create a stronger rental market.

It isn’t just the rental market that’s stronger as a result of the changes in downtown Chicago. Everyone can benefit from stronger metro neighborhoods.

How Everyone Benefits from Strong Downtown Communities

In the not-so-distant past, if people became more affluent, they often moved out of the city and into the suburbs. This is sometimes called suburban sprawl or urban decline. It creates a host of problems, most of which are patently obvious.

Downtown businesses suffer and the communities within them suffer as well. This dangerous trend creates a lack of housing options in metro areas and isolates young professionals from those who can't afford to move out of the downtown area.

This has the opposite effect of some of the aforementioned benefits. It leads to fewer people availing themselves of public activities and programs, as well as public transportation. The less demand exists for these programs, activities, and services, the more they decline.

In short, an abundance of affordable city living in the metro area keeps Chicago strong, vibrant, and thriving. These changes aren’t happening in a vacuum, however. The growing disinterest in homeownership — and specifically starter homes — sheds light on larger trends.

The Bigger Picture: What’s Driving the Shift Away from Starter Homes?

The first important connection to recognize is the link between dwindling interest in starter homes and increasing interest in high quality rental options. These two factors are inextricably related.

The Problem with Starter Homes by Definition

In decades past, a starter home was a modest house with just enough space for young couples to begin raising children.

These homes were stepping stones for both family life and financial security. Couples anticipated selling starter homes for a profit around the time their families expanded beyond the point of comfort.

The problem with starter homes today is apparent by definition. Starter homes are small, but not tiny. They represent a stage in a once conventional social trajectory. Their value is based on these factors and the idea that these homes will increase in value, either from a strong economy or improvements made to the home.

When homeowners are ready to sell a starter home and move on to something intended to be more permanent, they anticipate buyers whose needs that align with the home.

These days, many suddenly find those buyers are few and far between.

The Specialized Starter Home Market

There were two main markets for these types of homes: young couples and empty nesters approaching retirement. Individuals in both stages of life sought smaller homes and reduced costs-of-living.

Today, both young people and empty-nesters value different things. An unstable economy and housing market decreased job security and the ability to profit off housing improvements, and increased interest in social activities make renting an attractive alternative.

Young people who do want to buy homes of their own are generally looking for much smaller living spaces. The market boomed with tiny homes in recent years, but this trend has seen sustainability problems. Condos may feel like a smart move, however both young people and empty nesters alike are seeing value avoiding the hidden costs of homeownership.

Retirement age Americans are also reconsidering downsizing, often opting for rentals instead. At their stage of life, they don’t need to fix up an investment property to keep themselves busy in retirement. Rather, travel and volunteering are very much on the rise for adults in retirement.

A cozy apartment means reduced upkeep, less time spent cleaning, and more free time to enjoy the golden years of life. Close proximity to downtown Chicago means more things to do and the freedom to ditch personal vehicles entirely.

Ultimately, empty nesters and retirees are looking for fewer responsibilities and greater freedom. It’s the unlikely nexus of needs for this market and younger professionals that may spell the end of the starter home altogether.

Affordability Problems: Student Loans and the Economy

Some younger renters are avoiding homeownership under the weight of student loans and difficulties finding jobs in their field of college study. Rather than struggle toward the historical goal of homeownership, these renters instead find joy picking a high-quality rental unit in a vibrant community.

In fact, some young people who choose to focus on paying down student loan debt and delaying first home purchases find they have no need at all for starter homes. As empty nesters downsize too, the housing market is becoming more erratic.

Meanwhile, jobs are moving downtown: businesses are often moving to metro areas to court the talent they need to remain competitive.

It's more difficult today to depend on a steady flow a buyers moving through the conventional social stages of life, which makes starter homes risky.

We think there's a major shift in the demographics. Empty nesters are done taking care of their homes. They want to downsize, they want portability, mobility in the lease. The millennial household formation, they're not really dialed into taking care of a home, they want to go out and do the same thing that the boomers are doing, which is enjoy life, not work hard for their house. - AVH founder and CEO Mark Wolf, Business Insider

Facts and Figures

There is adequate data to back these claims up.

According to research, starter home purchases don’t interest young people. Some figures show this interest is down by at least 20%, with 50% of young people reporting they fail to see the value in starter homes at all. Research shows that the cost of starter homes has steadily increased, making them prohibitive. If they do fall within your budget, you may find a smaller margin of profit in your later resale value as a result.

Value Insured reports different figures, but they’re not painting a different overall picture. By their accounts, only 61% of millennials value home ownership over renting. That’s a decrease of 22% since 2016. In the same Value Insured survey, only 38% of millennials agreed that buying a home is a good investment.

Young people are also delaying marriage which may contribute to the lack of interest in starter homes. According to Census.gov, “today, 30 percent of young adults ages 18-34 are married, but 40 years ago, in 1978, 59 percent of young adults were married.”

The cause seems clear and there are plenty of reasons to embrace the change.

How You Can Get Involved in Today’s Vibrant Chicago Metro Life

Thanks to the changing needs of Chicago residents, rental options are plentiful and neighborhoods are bustling with activity. While some view the decline in homeownership as a sign of the declining American Dream, it’s actually just a change in what that dream looks like.

Today’s young professionals, families and empty nesters are breathing new life into cities like Chicago.

An obvious way to support this revitalization is to relocate to one of the many attractive urban rentals cropping up across the city. It’s easy to get in contact with owners like Beal Properties to explore your options.

If you’re perfectly happy where you live, why not take a trip into some of the neighborhoods downtown and experience the growth for yourself? Take in a ball game or one of the many cultural events sponsored by the city. You’ll find a calendar of events online.

There are art events and public parks to enjoy as well. As long as the weather holds, you can still find time to explore some of the greener spaces the city maintains.

Nightlife and restaurant culture are also booming. Use resources like Yelp and TripAdvisor to find some local spots you might have missed. You can learn a lot by playing tourist in your own hometown.

The bottom line is: Chicago is better when everyone gets involved. Whether that’s moving back downtown more regular visits to the city, you’ll love what you see.