CHICAGO — Renters in downtown Chicago are facing a sharp 6.25% year-over-year rent increase as the city deals with a dramatic collapse in new apartment construction — pushing supply to one of its lowest levels in nearly three decades.
Only fewer than 150 new apartment units are expected to be delivered in 2025, according to data from Crain’s. That’s a sharp contrast to years when the city saw thousands of new units hitting the market.
“The rents are just going to continue to escalate,” said Ron DeVries, senior managing director at Integra Realty Resources.
The increase is hitting renters hardest in River North, the Loop, South Loop, and West Loop, where Class A units are in highest demand.
Chicago Lags Behind Peer Cities In Housing Pipeline
While Chicago struggles to deliver a few hundred new units, other cities are booming.
In Austin, Texas, a city with just one-third of Chicago’s population, developers are currently building nearly 24,000 apartment units. That city also has more than 79,000 units in the development pipeline, including projects that are pre-leasing or undergoing approval stages.
In contrast, Chicago’s housing pipeline has significantly slowed — driven by factors such as:
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High construction and land costs
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Rising interest rates for developers
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Permit and zoning delays
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Lingering impacts from pandemic-era closures
Experts Warn Rent Will Continue Rising
Industry analysts believe rent prices in downtown Chicago will keep climbing through the rest of 2025 due to the imbalance between supply and demand. With few large-scale multifamily projects expected to open this year, prospective tenants are seeing limited options and higher competition.
As of Q1 2025, the average effective rent for Class A downtown apartments is at an all-time high, with affordability becoming a major concern for both long-term residents and new arrivals.
Are You Struggling With Rent Increases In Chicago?
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