Landlords Gearing Up To Battle Proposed Rent Control Act
The annual battle between Chicago apartment landlords and tenant advocacy groups surrounding a new proposed statewide Rent Control Act is heating up in the Illinois Legislature.
Landlords, including hundreds of members of the Chicagoland Apartment Association, are riled because the Illinois House of Representatives “Housing Committee” is aggressively pushing for a vote on House Bill 116 (HB116), which would lift the statewide ban on rent control in the state.
On March 24th, the housing committee voted 13 to 9 to pass HB116 out of their committee and to the House Floor for a vote sometime before May 31st. If passed by both the House and the Senate and signed by Gov. J.B. Pritzker the bill would allow rent control in Illinois.
“If the state ultimately succeeds in lifting the ban, cities and towns across the state of Illinois, including Chicago and its suburbs, will be free to enact rent control measures,” warned the Neighborhood Building Owners Alliance (NBOA), a landlord group.
Quoting Swedish economist Assar Lindbeck, the NBOA says: “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
Tenants’ groups pushing for rent control are seeking repeal of the state’s Rent Control Preemption Act, a law passed by the Illinois Legislature in 1997 which prohibits local governments from enacting rent-control ordinances.
Under the proposed legislation, Illinois would be transformed from a state in which no local unit of government is permitted to enact rent control, into a state in which all units of local government could be subject to enforcement of rent control, landlord groups say.
Since there are currently no limitations on landlords demanding excessive or unfair residential and commercial rent increases, tenants’ groups say this has led to skyrocketing rents and encroaching gentrification of once stable neighborhoods in Chicago and throughout Illinois.
Apartment owners and managers argue that Cook Count’s and Mayor Lori Lightfoot’s aggressive property tax hikes combined with sharply higher water and sewer charges are making it hard for landlords to maintain thin profit margins.
Meanwhile, as a result of the COVID-19 pandemic, apartment experts report the state of Illinois recently is seeing one of the biggest declines in rental prices in the nation.
According to an analysis by Quote Wizard, the average rental cost of an apartment in Illinois has decreased 6.2% over the last two years. That ranks Illinois fifth in the nation for rental-cost decrease.
Chicago is among the cities that saw the steepest decline in rent prices in the country. In the past year alone, the cost of renting in Chicago has decreased by 12.5%, according to Apartment List’s national rental report.
The average monthly rent for a one-bedroom apartment in Illinois is $863. A one-bedroom apartment in west suburban Naperville is $1,400.
The pandemic prompted thousands of apartment dwellers to move, said Nick VinZant, senior research analyst for Apartment List.
“The apartment-vacancy rate in Illinois currently is 8.5%,” he said. “In 2020, we saw a big push of people moving out of cities and urban areas and moving more into the suburbs.”
Anticipated real estate tax increases following the 2022 triennial reassessment of the city of Chicago, potential changes to affordable housing requirements, and the specter of rent control could eliminate the profitability of existing apartment buildings and new development, experts warn.
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.