Chicago short nearly 225,000 affordable rental units for its poorest residents, report finds

Chicago's affordable housing shortage is placing severe financial strain on low-income renters, according to a report released Thursday by Housing Action Illinois and the National Low Income Housing Coalition.

The study found only 31 affordable homes are available for rent for every 100 extremely low-income renter households in Chicago. In Illinois, it's 34 available homes for every 100 extremely low-income renter household.

Extremely low-income renters are those who have annual incomes at or below 30% of the area median income. In Chicago, that’s $35,970 for a family of four and $25,200 for an individual. Most households considered extremely low-income are because they're either working low-wage jobs, are seniors or have a disability, according to the report.

The annual study estimates the availability of affordable homes for renters at different income levels, with a focus on extremely low-income households. It also provides estimates of affordable housing needs for the U.S. and the 50 largest metropolitan areas, including Chicago. It's based on data from the 2024 American Community Survey Public Use Microdata Sample, a nationwide survey of about 3.5 million addresses.

Extremely low-income renters are most likely to be impacted by the housing shortage. And that’s especially true in Chicago, Bob Palmer, policy director at Housing Action Illinois, said.

He said Chicago’s figures don’t vary much from last year, but the data shows the region’s lack of affordable housing is persistent — especially for the lowest-income renters.

“It's a chronic problem that everyone knows about, but there hasn't been the political will to deal with it in a way that fundamentally changes the current problems,” Palmer said.

The report found no major city, or state, with an adequate supply of available affordable homes for extremely low-income renters. And Chicago, typically seen as more affordable than its coastal counterparts, was no exception.

Housing Action Illinois and the National Low Income Housing Coalition found the Chicago metro area was short 224,445 units of affordable housing for its poorest residents. It means 76% of extremely low-income renters in Chicago are spending more than half of their household income on rent. Experts say renters should typically spend no more than 30% of their monthly income on housing in order to budget for other necessities, like health care and groceries.

“You have neighborhoods that are gentrifying, where there's a lot of housing pressure,” Palmer said. “You have neighborhoods mostly on the South or West Side where there's a declining housing stock because of disinvestment in the housing [and] housing being torn down.”

The lack of affordable housing contributes to homelessness and evictions, Palmer said, as well as population loss. Illinois’ population has been growing for the last three years, according to the Illinois Policy Institute, but it was on a nine-year decline before then.

The state's growth in recent years has largely been attributed to an influx in immigration. Without immigration, Illinois’ population would have declined, according to the institute. More than 40,000 residents left Illinois last year to live in another state.

“Housing is an issue or a factor that very, very much influences the future of our state,” Palmer said.

Housing affordability remains an issue because of constraints in the private market. Much of the recent apartment development in Chicago is considered luxury or high-end because developers can't afford to build lower-rate units without government subsidies, Palmer said.

The report also found Illinois needs nearly 290,000 more homes for extremely low-income households. Expanding access to rental assistance and building deeply affordable rental homes could help ease the shortage, according to the National Low Income Housing Coalition.