Rising Property Taxes and Corporate Landlords Are Pricing Chicago Renters Out of the Path to Homeownership

Written by:

Rudi Davis

Date:

08 Mar 2026

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Property tax hikes and landlord business practices are pushing qualified renters out of Chicago neighborhoods, making it harder for residents to move from renting to owning, according to Kirk Hudson, Broker at Baird & Warner. The resulting barrier to homeownership is driven by rental inflation, not mortgage rates.

How Chicago’s 2024 Property Tax Increases Pushed Rents Higher Without Improving Units

In 2024, Cook County reassessed property taxes, resulting in significant increases for many buildings. Rather than using reserve funds to absorb those tax increases, most landlords raised rents immediately, regardless of whether the properties had improved or the neighborhood offered new amenities.

Hudson says most landlords treat rental properties primarily as a business and do not set aside reserves to cover tax increases. “They’re not saving the money they make every month off these renters,” he says. After covering the mortgage and expenses, any surplus often goes toward personal income rather than future costs. When taxes rise, tenants bear the burden through higher rents.

Studio apartments in Hudson’s Edgewater neighborhood now rent for $1,500 to $1,600, compared to $900 just a few years ago. Apartments that once rented for $600 to $700 now command $1,200 to $1,300. The rent increases are not tied to improvements in the units or the surrounding area.

“Most landlords make it a tenant’s responsibility when those things change,” Hudson says. As a result, rents have risen sharply in many buildings. Even qualified renters are being forced out of their preferred neighborhoods.

Why Chicago Renters Are Being Forced Out of Neighborhoods They Could Afford Three Years Ago

Hudson works with six to ten renters per month, along with one or two buyers, but recently only four or five of those renters have secured leases, down from prior years. The main obstacle is not income qualification but the growing gap between what renters can reasonably pay and what landlords demand.

“It’s becoming much harder for renters year after year to live independently and within their means,” Hudson says. He points to his own building, which has been in his family for 60 years and charges below-market rents. When searching for a comparable unit, Hudson finds similar apartments listed at $2,400 to $2,500, nearly double his current rent, without offering additional value.

The affordability problem is especially acute for renters seeking studios and one-bedrooms, which traditionally serve as entry points for young professionals and first-time renters. With studios now renting for $1,500 or more, saving for a down payment in the future is less realistic.

How Corporate Landlords Are Concentrating Ownership and Driving Up Rents Across Chicago

Hudson attributes part of the rental affordability problem to large corporate landlords buying multiple units with cash. These landlords set rents for maximum profit, often without accounting for local income levels or market conditions.

Hudson distinguishes between individual landlords, who may lack financial planning but do not aim to take advantage of tenants, and corporate landlords. Hudson says corporate landlords focus on maximizing rent revenue with less consideration for local affordability. The corporate ownership model has contributed to higher rental prices, especially in neighborhoods where those owners have concentrated holdings.

Corporate purchases also affect neighborhood demographics. By concentrating on specific property types and price points, corporate landlords create clusters of high-rent buildings that raise the overall market baseline.

Why Fewer Chicago Renters Are Making the Jump to Homeownership

Hudson says only about 10% to 15% of his renters move on to buy homes, a rate he considers too low. Each year, Hudson converts one or two renters into buyers, with most buyer clients coming from referrals rather than his rental base.

The low conversion rate has long-term consequences for neighborhood stability and economic mobility. Renters paying high rents cannot save for down payments. Without savings, those renters cannot build equity and remain stuck in the rental market.

“The idea of renting is that this is my first independent space, until I’m comfortable and financially confident to move on to owning my first home,” Hudson says.

Hudson plans to increase outreach to past renters in 2026 to educate former clients about the financial benefits of homeownership. He notes that renters now paying $1,600 for a studio have far less ability to save than renters who paid $900 for the same unit three years ago.

Why Mortgage Rates Are Not the Biggest Barrier to Homeownership for Chicago Renters

While mortgage rates receive much of the attention in housing affordability discussions, Hudson says rental market pressures are a bigger obstacle for his clients. With mortgage rates below 6%, more buyers can qualify for loans. But renters cannot reach that stage if high rents prevent them from saving for a down payment.

Hudson argues that rising property taxes and corporate consolidation are doing more to block access to affordable homeownership than mortgage rates. “Mostly tax increases and the monopolization from these large corporate landlords are buying up what otherwise would have been affordable homes for everyone else,” Hudson says.

The forces driving up rents are not the same as those driving home prices. Hudson observes that Chicago home prices have leveled off while rents continue to rise. Unit quality and neighborhood amenities, in many cases, remain unchanged. Hudson attributes the divergence to landlord practices and corporate ownership rather than broader conditions in the for-sale market.

What Rising Rents and Corporate Consolidation Mean for Chicago’s First-Time Buyer Pipeline

For agents focused on first-time buyers, rising rents and reduced savings capacity pose a growing challenge. If qualified renters cannot save for a down payment, the pool of future homebuyers shrinks. Fewer buyers means reduced transaction volumes and slower neighborhood turnover.

The ongoing rise in rents, driven by property tax increases, a lack of landlord reserves, and market consolidation, is eroding Chicago’s traditional pathway from renting to owning. As more renters are forced out of neighborhoods they could once afford, the city risks losing economic diversity and making homeownership less attainable for the next generation.

The pressure on Chicago renters is unlikely to ease unless landlords, policymakers, or both address the root causes of rental inflation. Restoring the connection between rent levels, tenant incomes, and long-term housing stability will require action beyond the real estate market.