Illinois REALTORS is a trade organization that advocates for private property rights across the state and represents 47,000 members. Illinois REALTORS retained Anderson Economic Group to identify and quantify the potential impacts of a citywide rent control ordinance in Chicago. The hypothetical ordinance we analyzed was based loosely on statewide rent control legislation introduced into the Illinois General Assembly in 2018.
AEG reviewed empirical research on the impacts of rent control in other cities and identified several effects that would likely occur in Chicago if rent control was implemented. These effects included decreases in housing supply, decreases in home values, and savings to tenants from reduced rent increases. We then collected data on the Chicago housing market from multiple sources and constructed a Chicago housing market model to estimate the extent of these impacts.
We estimated that a citywide rent control ordinance instituted in 2019 would prohibit the owners of nearly 185,000 rental properties from increasing rents to market rates in 2020. The ordinance would prevent market-rate rent increases in areas across the city, with large portions of neighborhoods such as Logan Square, West Town, North Center, Uptown, and Lakeview being most affected by the ordinance. We also estimated that, by 2029, the rent control ordinance would lead to a 10% decrease in the supply of rent controlled units as property owners would convert rental units into condominiums. This would result in 58,000 fewer rental units in the city in 2029 compared to a baseline scenario with no rent control. Savings to tenants from rent control would reach $157 million annually by 2029 if rent increases were limited to the rate of inflation. After 10 years of rent control, we estimated the value of condominiums on Chicago’s north, northwest, and near south sides could decline by $2.8 billion.