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Downtown Chicago’s Apartment Glut Could Become Shortage Instead
Worries about having too many new apartments in downtown Chicago may prove to be unfounded in the near term. The reason: the building boom is slowing, Integra Realty Resources’ (IRR) Ron DeVries told Crain’s Chicago Business.
“I think the specter of oversupply is gone,” he said. “In the next year or two, we could be talking about a shortage of supply.”
IRR has revised downward its projections for apartment completions over the next three years. Developers are now projected to complete 9,000 downtown apartments in 2019, 2020 and 2021, down from a total of 10,700 predicted earlier this year.
DeVries cited a number of factors contributing to the slowdown in downtown development activity. They include increasing difficulty in obtaining financing, especially from equity investors; concerns over the prospect of higher property taxes; and tougher rules governing affordable housing.
Meanwhile, Class A rents and occupancy downtown are both increasing, according to IRR.
Pictured: The 500-unit Paragon in the South Loop, which opened in May
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