NBOA Chicago Housing Provider Survey
Comprehensive survey of 235 Chicago housing providers representing approximately 50,000 rental units, examining rent collection performance, vacancy patterns, and the anticipated impact of the proposed “Bring Chicago Home” tax increase on rental housing markets across Chicago neighborhoods.
Survey Overview
The Neighborhood Building Owners Alliance (NBOA), in cooperation with its affiliate member associations and Kiser Group, conducted an online survey of Chicago housing providers to determine the current state of the city’s rental housing market and assess the potential impacts of proposed policy changes.
Survey Background and Methodology
This survey represents a continuation of NBOA’s quarterly survey series initiated in October 2020, providing ongoing tracking of critical rental housing market indicators including rent collection rates, vacancy patterns, and policy impacts across Chicago’s diverse neighborhood housing landscape.
Survey Timing and Context: Conducted September 11-18, 2023, this survey captured housing provider perspectives during a period of proposed policy changes, including the “Bring Chicago Home” real estate transfer tax increase, providing critical data on anticipated market responses to policy interventions.
Data Collection Focus Areas
- Building type and property characteristics
- Portfolio size by number of rental housing units
- Geographic location across Chicago neighborhoods
- Year-to-date rent collection performance
- Current vacancy rates and availability
- Anticipated responses to proposed tax policy changes
Respondent Profile
Survey respondents collectively own approximately 50,000 rental housing units throughout Chicago, representing a substantial cross-section of the city’s neighborhood rental housing stock. Consistent with previous NBOA survey iterations, the respondent pool predominantly consists of small and mid-sized housing providers who form the backbone of Chicago’s rental housing market.
Portfolio Size Distribution
The survey captures the perspectives of Chicago’s small to medium-sized housing providers who constitute the majority of the city’s neighborhood rental housing stock, distinct from large institutional investors or corporate property management entities.
Small-scale operators dominate the survey sample: Approximately 70% of respondents own fewer than 100 rental units, and 60% own ten or fewer buildings. This demographic represents the individual property owners and small businesses that provide the bulk of Chicago’s neighborhood rental housing.
Key Portfolio Characteristics
- 60% own 10 or fewer buildings — indicating predominantly small-scale, locally-focused property ownership
- 72% own fewer than 20 properties — demonstrating concentration in the small to medium-sized provider category
- 70% own fewer than 100 total units — confirming that large-scale institutional ownership is not representative of this survey population
Representative Sample
This survey is representative of Chicago’s smaller to medium-sized housing providers who collectively own and manage the majority of the city’s rental housing stock in neighborhood areas throughout Chicago.
Key Findings
Critical Survey Insights
Bring Chicago Home Tax Increase: Anticipated Market Impacts
The proposed “Bring Chicago Home” initiative would increase the real estate transfer tax by 167-300%, representing a substantial increase in the cost of selling rental properties. This policy change is expected to drive significant rent increases and deferred property improvements across Chicago’s rental housing market.
- 74% of respondents indicated they would raise rents to offset the increased transfer tax burden and maintain property sale proceeds
- 46% reported they would defer capital improvements and renovations if the tax increase were enacted, potentially impacting housing quality and neighborhood investment
- The tax burden would particularly impact small and mid-sized owners who rely on property sales for retirement planning and portfolio transitions
Geographic Market Disparities: “Tale of Two Cities”
The Chicago rental housing market continues to exhibit dramatic geographic performance disparities, with North Side and downtown areas demonstrating strong operational metrics while South and West Side neighborhoods struggle with collection challenges and foreclosure risk indicators.
- North Side and Downtown: 70% report stabilized collections (greater than 95% collection rates)
- South and West Sides: Only 30% report stabilized collections (greater than 95% collection rates)
- Foreclosure risk disparity: Only 2% of North Side/Downtown properties show collection rates below 75%, compared to 14% on South and West Sides
- This 40-percentage-point collection gap reflects underlying economic, demographic, and employment disparities across Chicago neighborhoods
Low Vacancy Rates Across All Market Areas
Despite geographic variations in collection performance, vacancy rates remain uniformly low across all Chicago neighborhoods, indicating continued strong demand for rental housing throughout the city.
- 38% of respondents have zero vacant units available in their portfolios
- 85% report vacancy rates between 0-5% across their rental housing units
- No significant geographic variance in vacancy rates between different parts of the market
Rent Collection Performance
Rent collection rates serve as a critical barometer of rental housing market health, tenant financial stability, and foreclosure risk. The September 2023 survey reveals a Chicago rental market sharply divided along geographic lines, with North Side and downtown properties demonstrating strong collection performance while South and West Side properties face substantial collection challenges.
Geographic Collection Disparities
North Side & Downtown
South & West Sides
7-times higher foreclosure risk on South and West Sides: Properties on Chicago’s South and West Sides are seven times more likely to report collection rates below 75%—a critical threshold indicating potential foreclosure risk—compared to North Side and downtown properties (14% vs 2%).
Collection Rate Implications
While few buildings overall show collection levels suggesting imminent foreclosure risk (collections below 75%), the geographic concentration of struggling properties creates significant disparities in neighborhood housing stability and investment viability across Chicago.
- Stabilized collections (>95%): Indicate healthy cash flow, low delinquency, and stable property operations
- Moderate collections (75-95%): Suggest operational challenges, elevated delinquency, and reduced investment capacity
- At-risk collections (<75%): Signal severe financial distress, potential foreclosure risk, and neighborhood disinvestment
Policy Implications of Collection Disparities
The dramatic 40-percentage-point gap in stabilized collection rates between North Side/downtown and South/West Side properties reflects broader structural economic disparities. Policy interventions that increase operational costs uniformly across Chicago—such as the proposed transfer tax increase—risk exacerbating these geographic inequities by placing additional financial pressure on already struggling properties in vulnerable neighborhoods.
Vacancy Analysis
Despite significant geographic variations in rent collection performance, vacancy rates remain uniformly low across all Chicago market areas, indicating sustained strong demand for rental housing throughout the city’s neighborhoods.
Tight rental market across all Chicago neighborhoods: The combination of 38% reporting full occupancy and 85% maintaining vacancy rates below 5% demonstrates strong rental housing demand across all geographic areas, regardless of collection performance disparities.
Geographic Vacancy Patterns
Unlike rent collection performance, which varies dramatically by neighborhood, vacancy rates show no significant geographic variance across different parts of the Chicago rental market. This suggests that affordability constraints and limited housing supply—rather than weak demand—drive rental housing markets in all Chicago neighborhoods.
Key Vacancy Insights
- No geographic vacancy disparities — South and West Side properties maintain low vacancy rates despite collection challenges
- Strong demand persists — Even properties with collection difficulties maintain near-full occupancy
- Housing supply constraints — Low vacancies across all neighborhoods indicate inadequate housing supply relative to demand
Market Implications
The disconnect between low vacancy rates and poor collection performance in South and West Side neighborhoods suggests that rental housing demand remains strong, but tenant financial challenges—including employment instability, wage constraints, and economic disruption—limit ability to consistently meet rent obligations. This pattern indicates that housing affordability challenges stem from income limitations rather than excess housing supply.
Bring Chicago Home Impact
The proposed “Bring Chicago Home” initiative would increase Chicago’s real estate transfer tax by 167-300%, representing one of the most significant property tax increases in the city’s history. Survey respondents overwhelmingly anticipate that this tax burden would drive rent increases and deferred property improvements across Chicago’s rental housing market.
Anticipated Operational Responses
Three out of four housing providers would raise rents: The overwhelming majority of survey respondents (74%) indicated they would increase rents to offset the reduced property sale proceeds resulting from the 167-300% transfer tax increase, directly contradicting proponents’ claims that the tax would not impact housing affordability.
Tax Structure and Impact
The “Bring Chicago Home” proposal would dramatically increase the cost of selling rental properties, with the tax burden falling most heavily on small and mid-sized housing providers who rely on property sales for retirement planning, portfolio transitions, and capital redeployment.
Transfer Tax Increase Breakdown
- 167-300% increase in real estate transfer tax rates for qualifying property sales
- Disproportionate impact on small owners who lack the financial reserves of institutional investors
- Reduced sale proceeds limit retirement security and generational wealth transfer for property owners
- Capital deployment constraints reduce ability to reinvest in property improvements and neighborhood development
Investment and Improvement Impacts
Nearly half of survey respondents (46%) indicated they would defer capital improvements and renovations if the transfer tax increase were enacted. This deferred maintenance and reduced investment could have cascading impacts on housing quality, neighborhood conditions, and long-term property values across Chicago.
Neighborhood investment at risk: The combination of rent increases (74% of respondents) and deferred improvements (46% of respondents) suggests the “Bring Chicago Home” tax would simultaneously reduce housing affordability and housing quality—the opposite of its stated policy objectives.
Deferred Investment Consequences
- Reduced property maintenance — Lower capital investment in building systems, infrastructure, and common areas
- Delayed unit renovations — Fewer kitchen, bathroom, and unit-level improvements between tenant turnovers
- Energy efficiency impacts — Reduced investment in heating, cooling, insulation, and weatherization improvements
- Neighborhood quality decline — Cumulative impact of deferred improvements across multiple properties in concentrated areas
Policy Contradiction
The survey data reveals a fundamental contradiction in the “Bring Chicago Home” proposal: while ostensibly designed to fund affordable housing initiatives, the tax would drive rent increases (per 74% of respondents) and deferred property improvements (per 46% of respondents), simultaneously reducing housing affordability and housing quality. This pattern suggests the policy would undermine its stated objectives while generating new revenue primarily from small and mid-sized property owners rather than large institutional investors.
Survey Conclusions
The September 2023 NBOA Housing Provider Survey reveals a Chicago rental housing market characterized by strong demand fundamentals, low vacancy rates, and dramatic geographic performance disparities. While vacancy rates remain uniformly low across all neighborhoods (85% report 0-5% vacancy), rent collection performance varies by 40 percentage points between North Side/downtown and South/West Side properties.
The “tale of two cities” persists and deepens: North Side and downtown properties achieve 70% stabilized collections (>95% rates), while South and West Side properties achieve only 30% stabilized collections. More critically, South and West Side properties are seven times more likely to show foreclosure-risk collection levels (<75%) compared to North Side and downtown properties (14% vs 2%).
Proposed tax policies risk exacerbating disparities: The “Bring Chicago Home” transfer tax increase would impose a 167-300% cost increase on property sales, with 74% of housing providers indicating they would raise rents in response and 46% indicating they would defer capital improvements. These responses would simultaneously reduce housing affordability and housing quality—contradicting the policy’s stated objectives.
Small-scale providers dominate the market: Seventy percent of survey respondents own fewer than 100 units, and 72% own fewer than 20 properties. These small and mid-sized housing providers—not large institutional investors—constitute the majority of Chicago’s neighborhood rental housing stock and would bear the primary burden of increased transfer taxes.
The survey data presents a rental housing sector with strong demand indicators but substantial geographic fragmentation and vulnerability to policy interventions that increase operational costs without addressing underlying economic disparities across Chicago neighborhoods.