Struggling to stay ahead of Chicago’s ever-increasing real estate tax bite, more and more landlords are turning to non-refundable rental fees and other monthly surcharges to boost cash flow.
Experts say apartment renters who reside in Chicago’s upscale lakefront neighborhoods should expect spring 2020 rent increases to reflect this trend.
Many professional apartment management companies have stopped taking refundable security deposits, mostly to avoid the massive bookkeeping work to compute the tenant’s tiny annual-interest earnings of 0.01% as required by the Chicago Landlord-Tenant Ordinance.
Experts say the annual interest payment typically costs the landlord only a few cents a year per unit, but it is an accounting nightmare for major management firms. Imagine sending out 20-cent checks to thousands of tenants every year.
Hefty application, move-in and pet fees generally have replaced security deposits in the hot lakefront and downtown rental apartment markets. Application fees range from $79 to $100. Non-refundable move-in fees start at about $350 and go to $500. Some landlords also charge “move-out” fees.
Peak Properties, an Old Town and Lincoln Park apartment management firm, now is charging a $79 application fee and a non-refundable $350 move-in fee per adult in lieu of a security deposit.
Peak also is charging a non-refundable pet deposit of $250 per dog and $150 per cat, plus monthly “pet rent” of $25 per dog and $15 per cat.
Another new and creative cash-flow charge dreamed up by apartment management companies is the Communal Amenity Maintenance (CAM) fee. Sparked by the city’s recent steep increases in water, sewer and garbage utility fees, landlords are now charging a flat $45 monthly pass-through fee for water and sewer usage, trash removal, hallway and general maintenance, and snow removal.
Peak currently is listing a 3-bedoom, 1.5-bath apartment in the 1800 block of North Orleans in Old Town for $1,995 a month. The unit features stainless-steel appliances and oak kitchen cabinets. Bedrooms are only large enough for full-size beds. Assuming three roommates rented this apartment, they would pay a total application fee of $237 ($79 each), plus total non-refundable move-in fees of $1,050 ($350 each).
If the renters have a dog and a cat, the non-refundable pet move-in fee would be $400 ($250 plus $150). Tack on another $40 a month pet rent for the two animals. Plus, the $45 monthly CAM fee for water, sewer, trash maintenance and snow removal. So, the final net rent would be $1,995, plus $40 for pet rent, and $45 for the CAM fee, for a total of $2,080.
Also listed is a 2-bedoom-plus-office, 1-bath apartment in a brick walk-up in the 1800 block of North Cleveland in Old Town for $2,395 a month. The unit features stainless-steel appliances and in-unit washer-dryer. Bedrooms fit queen-size beds.
Assuming two roommates rented this apartment, they would pay a total application fee of $158, plus total non-refundable move-in fees of $700.
If the renters have a dog and a cat, the non-refundable pet move-in fee would be $400.
Tack on another $40 a month pet rent for the two animals. Plus, the $45 monthly CAM fee for water, sewer, trash maintenance and snow removal. So, the final net rent would be $2,395, plus $40 for pet rent, and $45 for the CAM fee, for a total of $2,480.
Pet process in high-rises
Chicago animal lovers who are apartment hunting in the coming spring market should be aware that the “pet process” is costly and filled with restrictions, especially if a luxury high-rise is the targeted destination.
At Presidential Towers, a complex of four high-rises at 555 W. Madison in the West Loop, renters are required to pay a one-time, non-refundable pet fee of $300 to allow a dog to reside in their apartment. And, the total monthly rent is increased by $25 to cover Fido’s occupancy. Base monthly rents start at $1,390 for a studio, $1,640 for a 1-bedroom unit and $2,520 for a 2-bedroom layout.
Presidential Tower’s “Chicago Animal Addendum” lease rider states: “Small birds and fish are welcome at no extra charge. No reptiles or exotic pets—see management for approval.” Cats are not charged a monthly rental fee as long as they are outfitted with a litter box.
A maximum of two pets are allowed per apartment. However, 21 dog breeds—including Pit Bull Terrier, Rottweiler, German Shepard, Doberman Pinscher, Saint Bernard and Old English Sheep Dogs—are considered “restricted breeds” and not permitted at Presidential Towers because they are “deemed aggressive.”
“All dogs must be interviewed and approved by a manager prior to occupancy,” states the Animal Addendum. “A veterinary certification form must be executed by a licensed veterinarian for each dog.”
One wonders if animals also are required to sign the lease with a paw print.
At Eugenie Terrace on the Park, a 44-story high-rise at 1730 N. Clark in the Lincoln Park neighborhood, the “Pet Policy” calls for a dog weigh-in. Dogs must meet a 100-pound weight limit for the maximum two pets allowed per apartment.
Like Presidential Towers, breed restrictions apply at Eugenie Terrace. All the breeds mentioned above also are not permitted, along with Great Dane, Siberian Husky, Alaskan Malamute, “Wolf hybrids,” and any mixtures of these breeds.
The non-refundable pet move-in fee at Eugenie Terrace is $500, plus $25 monthly dog rent. Cats also must meet the 100-pound weight limit for a maximum two cats. Felines are not charged monthly pet rent. Base rents at Eugenie Terrace start at $1,755 for a studio, $2,441 for 1-bedroom units and $3,430 for 2-bedroom layouts. Utility fees are in addition to rent and vary depending on square footage.
For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.