A dearth of affordable housing has been deemed a crisis in Chicago, but from a long-term perspective, perhaps the issue isn’t quite as alarming as perceived.
Chicago has maintained its housing affordability better than any other major U.S. city over the past five decades, Crain’s reported, citing data from RealtyHop.
In a comparison of housing affordability changes among the nation’s 10 largest cities since 1970, Chicago shows resilience amid a nationwide trend of skyrocketing housing costs.
“It’s interesting to find that the third-largest metro seems to have held onto affordability, when others have changed so much,” Shane Lee, a RealtyHop data scientist, told the outlet.
RealtyHop determined affordability changes based on the multiple of median household income needed to pay for the median-priced house. Chicago’s multiple stood at 2.05 in 1970, rising marginally to 2.72 by 2022. That’s a 33 percent increase in housing affordability challenges over the past five decades, a notably lower figure compared to other major cities.
Los Angeles, for instance, experienced a staggering 245 percent rise in affordability hurdles over the same period. Philadelphia, Miami and Boston witnessed twofold increases.
Chicago carries a reputation for offering more value for homeowners’ money, local realtor Lucy Hilt of Berkshire Hathaway HomeServices said. However, despite Chicago’s relative stability in housing affordability, it has notoriously high property taxes, impacting homeowners more so than in other parts of the country, Lee said.
In 2022, the Windy City had the second-highest effective residential property tax rate among major cities, at 1.52 percent, according to the Lincoln Institute of Land Policy. Only Houston had a higher rate, standing at 1.56 percent.
Lowering property taxes could alleviate the long-term cost burden on homeowners, allowing more competitive pricing in the housing market, Lee said.
—Quinn Donoghue
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