Tag Archives: Chicago apartments

Talking Trash

Chicago garbage pickup (or “scavenger service” as we Realtor wonks like to call it) is a bigger deal than you’d think for landlords. It tends to get overlooked by newer landlords, and even the experienced ones don’t like to spend too much time dwelling on the topic of handling other people’s junk. However, there are some laws to keep in mind and best practices to follow when it comes to dealing with your tenants’ trash. Today I’ll be reviewing the basics for you.

Trash pickup is also called "scavenger service." This little guy is also a scavenger, but of a different kind.

Trash pickup is also called “scavenger service.” This little guy is also a scavenger, but of a different kind.

First off, the city sanitation ordinance can be found here. Additionally, the recycling regulations can be found here.¬† Regardless of the size of your building I’d recommend that you give it a glance. Violations are penalized with tickets from the police.

Who Pays for Trash Pickups in Chicago?

If your building has four units or fewer, the city will pick up your trash as if it was a single family home. You pay for this service through your property taxes and sales tax. This also goes for individually rented condos in buildings with up to four units.

If the building has more than four units, you will have to hire a private hauler to collect your tenants’ trash. There are several private haulers that work the Chicago grid – most are Teamsters. Larger condo developments will also have to hire private haulers – this is paid for out of the owners’ assessments.

The most common private haulers that I see around here are Waste Management, Lakeshore Recycling, Groot, Allied/Republic, Flood Brothers and Veolia.

Either way, tenants in Chicago expect landlords to pay for scavenger service.

How Much Trash Is There?

The trash carts supplied by the city for small buildings hold 96 gallons of waste, or a little less than half a cubic yard. Based on my observations, a family of three will fill approximately one of those carts per week with regular trash, and another one every two weeks with recyclable trash. (If you have a bunch of dirty hippies living in your building it may be the other way around.) The last week of the month in moving season will see far more trash, as will the holiday season.

If you’re buying an apartment building, the prior owner will probably have trash containers out back that you can use to gauge how many you’ll need once you take over the reins. It’s possible that the trash contract may be passed over to you at closing. It’s a good idea to check out how the trash looks on the last day of a month to gauge if more containers are needed. Overflowing dumpsters lead to tickets – it’s always better to err on the side of too much space and downsize later if it isn’t needed.

It’s important to communicate with your tenants regarding how they handle trash if you want to keep the ticket brigade at bay. Make sure that tenants know to bag their trash and secure the bags firmly. Make sure they know that trash needs to be removed from the building regularly, not left to pile up inside their apartments. Take time to inform them about which materials are considered to be hazardous – this includes batteries, toner cartridges, paint and lighter fluid. If you allow cats in your building, make sure your tenants dispose of the cat litter with the trash instead of flushing it.

Also make sure that they notify you if the dumpster is too full. It’s better to head over and pack down the trash or schedule an additional pickup than to incur a $200 fine because a nosy neighbor got annoyed and called 311 on you.

What About Recycling?

According to city ordinance, renters must have recycling options made available to them, even if you’re in a small building in an area without blue cart service. The recycling method you provide must allow for separation of recyclables at your building. You also need to make an effort to educate your renters on what items to separate. Unfortunately for the planet, the recycling ordinance is pretty toothless and rarely enforced. However, it’s important to remember that the tenant pool tends to consist of younger residents with very eco-conscious leanings. A visible recycling program is not only good for staying on the good side of the law, but it’s also a great marketing tool.

Blue recycling carts in their natural habitat. (Photo by Mick Dumke, Chicago Reader)

Blue recycling carts in their natural habitat. (Photo by Mick Dumke, Chicago Reader)

Most private haulers will offer specifically marked recycling-only dumpsters. If you’re hiring regular dumpsters make sure you also provide a separate container for recyclable items.

How about Big Stuff?

Sometimes your tenants will need to discard larger items. Without proper preparation, this can lead to a big mess in your alley. Furniture left outside of dumpsters can lead to broken glass littered across the alley, thieves picking over the items, and the general enmity of your neighbors. Mattresses left lying out are a sign of a bedbug infestation, which can cause panic among your other tenants even if no problem actually exists.

Therefore it’s important to communicate to your tenants in the lease and explicitly in conversation that large items need to be placed in the dumpster. If they have something that’s too big to fit, they need to warn you immediately so that you can schedule an extra pickup with the city or with your private hauler.

Similarly, if you’re planning on doing any renovation work or clearing out an apartment formerly occupied by a hoarder, you may need to hire an extra dumpster on your own even if the city provides pickup. These types of projects create far more trash than your standard equipment will be able to contain.

By the way, if you do schedule a last minute extra pickup with a private hauler, be prepared to pay them in cash with a nice tip for going out of their way for you. Even if you have a contract for regular service, these kind of trips are above and beyond a trash hauler’s normal duties.

What About Shops and Restaurants?

If you’ve got a mixed use building, you’ll probably wind up with a few retail shops or restaurants renting from you in the commercial spaces. Unlike residential renters, most commercial tenants in Chicago are expected to pay for their own scavenger service (along with all the other utilities). Sometimes a very small office can piggyback onto your dumpsters, but any business that requires a sanitation license will probably be required to demonstrate that they’re in charge of their own trash collection.

This is about as close as you ever want to get to a grease dumpster. (Photo by TrashMonkey29 on Flickr.)

This is about as close as you ever want to get to a grease dumpster. (Photo by TrashMonkey29 on Flickr.)

If you’ve got restaurants, doctor’s offices, hair salons, catering businesses, childcare facilities or anything that generates a lot of icky trash, you’ll want to ensure that you leave enough space in the rear of your building for each business to provide their own dumpsters. Restaurants in particular may need space not only for a regular dumpster and a recycling container but also a grease dumpster.

Grease dumpsters require their own special precautions – while they’re designed to contain liquid waste, it’s easy to spill when you’re pouring hot grease in the dark. Hosing down the ground around a grease dumpster is actually illegal. You’ll need to make sure the ground nearby is fully cleaned with detergent to keep rats away and make sure the alley doesn’t become a skid hazard for passing cars.

What if There’s No Alley Access?

In order for trash to be collected, it needs to be accessible. For most buildings in Chicago this is an easy task. Dumpsters live in the alley, trucks pick them up there. No fuss, no muss. However, there are a few locations in the city where alleys do not exist, or if they do, there is no way to get to them from the house without a very long walk.

Before you purchase a rental property you need to consider how trash pickup is handled. If there is no way for you to leave trash containers in a place where both tenants and trucks can access them, you will need to make plans to haul the trash out to the street for pickup on a regular basis. Unless you’ve got a good crew of workmen on hand or plan to live on site, I guarantee that this will get old really fast. In theory you could offer a barter deal to a reliable tenant to haul the dumpsters out on trash day, but you’ll still want to follow up regularly to make sure they’re actually holding up their end of the bargain. This is probably not a situation that you will be able to resolve on your own, either. You can’t just go adding alleys on your block.

Should I Chain My Dumpsters?

Yes. Illegal dumping – that’s when other people put their trash in your containers – is a “three strikes and you’re out” offense in Chicago. The first two times you get a ticket, the third time is a felony with jail time. Building contractors in particular are notorious for dumping their construction debris in any nearby unsecured container. Make sure it isn’t yours.

Additionally, dumpster diving is not just for thrift shop loving hipsters anymore. Identity thieves have a field day rummaging through tenants’ discarded papers. Grease theft from grease dumpsters is also common, since grease is used to make biodiesel and can therefore be resold at a high price. (Most grease dumpsters are designed to have higher security than your normal dumpster for just that reason.)

However, before you go chaining up your trash containers make sure you’ve considered the tenant training you’ll have to do to make this kind of precaution successful. Tenants will need to have keys to the chains’ padlocks. They will also need to be instructed to re-secure the dumpsters after depositing their trash. Your success rate will depend a lot on how well you convince your tenants of the necessity. Better pest control and protection against identity theft should be your two biggest talking points on that front.

Private Hauler Gotchas

Long Term contracts. Wouldn’t it be nice if you could sign your renters to a five or ten year lease that allowed you to raise their rents arbitrarily at any point? Well, private trash haulers do exactly that. And they generally require four to six months advance notice to get you out of the contract. Make sure you negotiate heavily before you select a hauling company.

Graffiti. You’d think that for the cost of service, the haulers would regularly swap out dumpsters that get tagged, right? Unfortunately this is not the case, and the taggers know it. Dumpsters are one of the most popular locations for graffiti, since landlords assume that the haulers will clean them and vice versa. If your building’s dumpsters are located close to the street or an alley intersection they will be particularly likely targets for tagging. Make sure that you keep some paint on hand to cover any tags.


 

Next week I’ll be doing a three part series on the quality of building materials. (Trust me, it will be more interesting than it sounds!) See you then!

What Happens If Your Landlord Dies?

In previous articles I’ve addressed what a landlord should do if a tenant dies in the middle of a lease. However, I’ve not discussed the topic from the other side. So what happens to a tenant if the landlord dies?

Regardless of how you feel about your landlord's death, you probably have some questions about what's going to happen to your lease.

Regardless of how you feel about your landlord’s death, you probably have some questions about what’s going to happen to your lease.

I’m not an attorney, and I certainly cannot cover every possible scenario. However, I can address some of the basic questions that may arise. As always, the discussions here pertain to apartments in the Chicago area.

Question 1: Do I have to move out?

No. Your lease is part of the property, just like the refrigerator, the garage and the roof. If the owner sells the building, he/she sells your lease along with it. If the owner dies, your lease continues. You do not have to move out automatically. Your landlord’s heirs cannot suddenly kick you out because they want to move in.

Question 2: Where do I send my rent?

You should continue to send your rent to the address listed on your lease. Once the landlord’s estate is settled, the probate attorney and/or the new owners who have inherited the property will send you written notice of any changes.

If your rent check comes back as undeliverable, hang onto it unopened in the envelope as proof that you tried.

If your rent check comes back as undeliverable, hang onto it unopened in the envelope as proof that you tried.

Question 3: Who’s the new owner?

This is probably the most complicated question. It may take some time for the new owner to be determined, depending on how the property title was held. In other cases, the new owner could be able to step in within a matter of days. In the interim, the executor of the estate will become your main point of contact. This could be someone named in the landlord’s will or a court-appointed probate attorney. Either way, until you are notified in writing of a change in ownership, make sure all dealings regarding your apartment are handled in writing to the landlord’s address as listed on your lease.

If They’re Incorporated

If your landlord was incorporated – either as a corporation or LLC – with other partners, then you have nothing to worry about. The company will survive the death of the landlord. However, if the landlord was the only partner in the company, the entire company’s assets (including your lease) will pass on to the landlord’s heirs.

If They Have Heirs and a Legal Will

Provided the will is legal, the property goes to whoever is specified in the will. For all you know, it might even be you!

Provided the will is legal, the property goes to whoever is specified in the will. For all you know, it might even be you! (Maybe you should be nice to your landlord after all…)

If the landlord had a legal will and designated heirs, the property and your lease will pass on to the heirs specified in the will. These heirs will become your new landlords automatically, although it may take them some time to figure out who will be handling your specific concerns.

If They Have Heirs and No Will

It’s highly unlikely that your landlord will die without a will (“intestate”) but if so, the ownership will be determined through Cook County probate court. Illinois has a very specific order of preference for distributing property among remaining family. Children and living spouses are the first option, followed by parents and siblings, grandparents, great-grandparents, and if all else fails, the property goes to the next closest surviving relative. However, the property may well be distributed evenly among many relatives, so your property could wind up the subject of dispute between squabbling relatives. The most important thing in this case is to remain in close contact with the probate attorney appointed to handle the estate, as any official changes in ownership will come to you from them.

If They Have No Heirs and No Will

escheat happens

Again, this scenario is highly unlikely, but in the case that your landlord had no will and no surviving family, your building will become property of Cook County. (In legal terms, the property “escheats” to the county.)

If The Landlord Owes Outstanding Debts

What if your landlord died while still owing money to somebody? Regardless of what the will says, the landlord’s creditors have to be paid first. This may mean that your apartment will transferred in order to settle a debt. Three common situations where this could occur would be if the landlord had a mortgage on the property, if they had not yet paid contractors for major renovation work at the building, or if they had unpaid back taxes. Either way, the creditor gets your building and you along with it.

Question 4: Can I use this as a reason to break my lease?

Not really. The new owners who inherit the estate probably wouldn’t fault you for wanting to head out early, but since your lease is still valid and your apartment is still intact, you’ll have to follow the same lease break routine that you’d have followed if your landlord was still alive. Please be gentle with the relatives of your landlord when you go to discuss leaving – it is always a delicate and difficult situation.

Question 5: What if the owner lived on site?

All of the above is pretty much consistent if the landlord lived in the same building with you or not. However, if the landlord died in the building (I know, ew!) then you may have grounds for breaking your lease. A death on the property requires special clean up and care. Your property may be sealed for investigation by the coroner. If you can’t get into the property or it’s a health hazard, and the problem continues for over 72 hours, you do have a right to break your lease. The only problem is that you have to provide written notice to your landlord asking them to correct the problem, and figuring out who your new landlord is within 72 hours can be difficult.

Regardless, the most important things in this situation are to find safe substitute housing immediately – a hotel if you have to – and to cooperate with the authorities and the heirs in order to find out when you can safely return. This sort of extreme scenario would merit a call to an attorney to ensure that your needs remain prominent in the minds of those dealing directly with the death.

Question 6: What if my lease expires before the estate is settled?

Complicated estates can take months or even years to parcel out between heirs.

If you’re on a one year lease, it may well be that your lease expires before everything is resolved. Your lease expiration date, like all other aspects of your lease, remains valid even if the owner dies. In Chicago, a landlord has to provide you with at least 30 days written notice if they don’t intend to renew your lease. Unless your landlord did so before death, you have the right to stay in your apartment on a month-to-month lease.

If you choose to move out at the end of your lease, your course of action should be to send a letter stating as much to the same address where you send your rent, at least a month before the last day of the lease.

Question 7: How do I get my security deposit back?

This is probably the most complicated of all of the questions. The first step should be to provide your forwarding address to the executor of the estate when you move out, along with a reminder that they must return a list of itemized deductions within 30 days, and the balance of your deposit, with interest, within 45 days.

If the estate does not return your deposit before the deadline, you do have a right to sue them to get the money back.

Overall the most important things to remember in this kind of situation are:

  • Make sure your voice is heard. It is very easy in the process of settling an estate for the heirs to forget about the deceased’s renters. As soon as an executor is appointed, you must remain a firm presence in the process so that your needs are not forgotten.
  • Be kind and patient. The person who inherits your building may not have any experience as a Chicago landlord. Our landlord-tenant laws are some of the most complex in the country. It takes a while to learn how we do things around here. You’ll have to take some time to read up on the rules yourself, and you may have to gently coach your new landlord on how to do things the right way. Remember that they just lost a family member – please don’t take their inexperience as a reason to take advantage of them.
  • Seek help if you need it. These sorts of complicated situations are why professionals exist. You may deal with grief yourself over the loss, even if the landlord was not a good friend. If the estate spends a long time in probate you may need to consult with an attorney. Like it or not, the death of your landlord means that changes are headed your way, and not all of them will be predictable.

10 Mistakes Made by First Time Landlords

Last year I did two articles about mistakes made by first time renters and first time buyers. Today we’re going to look at errors made by first time landlords.

1. Setting Arbitrary Rent Rates

The price a tenant will pay has little or no bearing on your monthly costs. They will compare what’s available and, if your price is reasonable, they will rent your unit. If your price is too high, they won’t even look at it. If it’s too low, they will wonder what’s wrong with it or take you to be a sucker.

Apple can get away with pricing higher than anything else. You cannot.

Apple can get away with pricing higher than anything else. You cannot.

(more…)

Rent Bacon: March 2013

No Foolin’.

The Rent Bacon index number is an indicator of how a district is performing compared to the HUD Fair Market Rents. Landlords can use it to figure out how much more to charge this year. Tenants can figure out how much more it will cost to move.

The Rent Bacon index number is an indicator of how a district is performing compared to the HUD Fair Market Rents. Landlords can use it to figure out how much more to charge this year. Tenants can figure out how much more it will cost to move.

New month, new Rent Bacon. Rent Bacon gauges the change in actual value of apartments in Chicago on a quarterly basis using rental data from the local MLS. The index takes into account the rent rates, market times, and ratio of rented units compared to listed units. This month we’re looking at 2 bedroom, 2 bathroom apartments throughout the city. For more info on how the index is calculated, check out this explanatory post.

Observation #1: Better value

Now this is not something obvious from the chart above, but it is quite clear if you compare it against last month’s results for 3 bedroom, 2 bathroom apartments. The index value for 2 beds is considerably higher, peaking over 300 for the smaller units. Does this mean that they’re actually a better value? Yes, absolutely. (more…)

Rental Site Review: Zillow

A couple of months ago, I posted a review of SearchChicago.com, the Sun-Times online classifieds page. I concocted a scoring method to rate rental websites on a 40 point scale based on diversity of listings, listing freshness, listing legitimacy, and ease of use. SearchChicago scored 14 out of 40 – 35% of the maximum, a dismal failure. Today we’re going to use the same criteria to rate another, more well-known site: Zillow.

Zillow is best known as way to search for homes for sale. Their claim to fame since the beginning has been the “Zestimate,” or their estimated value of a home based on sale data from the area. For conventional homes, it can be reasonably accurate. For homes that deviate even slightly from your standard cookie-cutter architecture it is frequently wildly out of whack. Zillow recently expanded into listing apartments and homes for rent, and they brought the Zestimate along with them. It’s just as unreliable for rentals as it is for homes, but what about the rest of the site? Is it something your average Chicago apartment hunter should be using to find their next place?

Zillow scored 24 out of 40 possible points. Here’s why.

On the surface, it looks like Zillow has a ton of rentals in Chicago. And they do, but it isn’t as diverse as you’d think. In the 60640 zip code (Uptown), they list 910 rentals. The MLS has 79. In the 60625 zip code (Lincoln Square/Albany Park), they list 388 rentals while the MLS has 38. However, once you start picking apart the listings you realize that the surface data is misleading. Looking closely, over half of the listings are either duplicates or similar apartments in the same large buildings.

Even so, if you cut the total listings on Zillow in half, they still handily trounce the MLS. There’s all sizes and styles, from studios to five bedrooms and from houses to high rises. Rents range from $500 to five-figures and all different types of landlords are represented.

In terms of listing diversity, Zillow gets an 8 out of 10.

Zillow does not charge landlords or agents to post rental listings. This means that everyone and their brother can post an ad, regardless of whether or not they have the right to do so. Sites that do not charge advertisers are generally rife with questionable postings, and Zillow is no different on that front. A quick search this evening uncovered a fake copy of one of my own listings, which I reported using their handy “report” button. After reporting it, the listing disappeared from my search results, but I could still bring it up by typing in its direct address in my browser. I’m pursuing other routes to have the listing taken down.

In my search through the 60640 and 60625 zip codes, at least half to 3/4 of the listings used the ominous “undisclosed address.” Many used photos with watermarks from the apartment locator services, which are known for posting bait listings to free marketing sites. Others had no photos at all.

The apartments with actual addresses are more likely to be legit, but Zillow’s checking for unique addresses needs a little work. In the case of the scammer who copied my listing, he simply left off one digit from the apartment number to fool the system into thinking he was posting a different apartment.

Zillow gets 5 out of 10 possible points for listing legitimacy.

SearchChicago got a measly 2 out of 10 when it came to ease of use. Their slow, clunky site made for a totally dismal experience. By contrast Zillow comes out smelling like a rose. The site loads quickly, the back button works properly, and the mobile version takes me from a Google search result to an actual listing with only one annoying nag window about downloading their app.

Their mapping feature is decent, with nice neighborhood sectoring and the ability to draw your own boundaries. I’d have liked to see the ability to do a radius search in a circle around a specific point as well. Unfortunately, the map cannot be turned off unless you click through to a listing, and once you zoom in beyond a certain point you cannot switch from satellite to street view. On the map view, search results are displayed to the right in a list with basic data. However, the “basic” data on many of the listings is overly simplified, which leads to a lot of excessive clicking. Of course, Zillow being advertising-driven they want to be able to demonstrate that they’re generating lots and lots of clicks. Their approach seems to be to provide as little information as possible as a reward for each click.

A listing detail page dedicates about the top 1/4 of the page to the information obtained from the landlord or agent. The next 1/2 of the page is spent on Zillow’s useless “Zestimate” and price history tracking. Finally, the last 1/3 of the page is spent on school scores inlined from Greatschools, which is of marginal use to apartment hunters in Chicago who tend to be just barely out of school themselves.

The search feature is quick and dirty, but asks some strange questions. It’s obviously copied over from the home-for-sale search feature with little regard for the specific needs of renters. It allows the user to specify date of construction, lot size and square footage – most of which are omitted from rental listings altogether – but doesn’t allow the user to narrow their search by more important criteria like minimum lease length, security deposit, non-smoking buildings, or number of units in the building.

Overall in terms of ease of use, I’d give Zillow a 7 out of 10.

Finally, we’re down to the criterion that pretty much killed SearchChicago – listing freshness. If you recall, 72% of their listings had been off the market already for at least 3 months. Now, I’d like to say that Zillow did better. The MLS average market time for an active rental listing in 60625 and 60640 is between 40 and 56 days, so if Zillow comes in anywhere near that or better they’d be doing fine on the freshness factor.

Unfortunately, I just can’t tell how fresh the listings are.

See, if you look at the map page you can sort by “days on Zillow.” If you do so, you’ll see that the oldest listings are 34 days old. This makes Zillow look really good on the surface, until you start clicking through to the listing details. That’s where it all falls apart.

This is the teaser on the map page...

This is the teaser on the map page…

... and this is the detail page. Notice the difference in listing age?

… and this is the detail page. Notice the difference in listing age?

This means that short of clicking the detail pages for over 1000 listings, there’s no way for me to tell the actual age of the listings on Zillow. The oldest I found in a cursory search was 92 days – that’s a two month difference between the index page and the detail page!

Speaking as an agent who syndicates listings to Zillow, I can vouch that my listings take about 3 days to get picked up from the MLS. This is a very bad delay in a fast-paced market. I had a 3 day listing a few weeks back that didn’t even appear. However, they do tend to be very good about removing inactive listings promptly once they’re notified.

In terms of listing freshness, Zillow gets a 4 out of 10.

So, Zillow just barely passes with 60% of the maximum achievable score. If you’re comfortable with using maps, you can use it to search for Chicago apartments, but proceed with caution. Make sure to background check any landlord you find on Zillow. Also bear in mind that as the new kid on the block, most agents will post to multiple other sites before they think to post to Zillow, too.

Field Guide to Chicago Apartments: Studios

fieldguideIt’s been a while since we pulled out the old Field Guide for a humorous look at some of the different types of Chicago apartments. Last summer I gave you an overview of garden apartments and coach houses. Today we’re going to look at another common species of apartment with many quirks: the studio. As the economy starts to recover, many renters who have paired up with roommates through the recession will be able to move out on their own again. Studios, designed for single occupants, will be their next logical stop.

Habitat: Restricted

Unlike the previous two species we studied in the Field Guide, the studio apartment (apartmentus minisculus ecubiculus) cannot be found throughout Chicago. In fact, their territory is quite constricted. Studios can only be spotted in areas that currently attract large numbers of single residents, or in areas that attracted them in the past. They tend to flock together in high rise buildings along the lakefront and close to major transit hubs. Their slow appreciation makes them of little interest to condo developers. The ones that exist inland are usually converted from former hotels or clustered around college campuses and hospitals. (more…)

Celebrity Tenants

Between my current career as a Realtor and my prior career as a stage manager, I’ve been lucky enough to deal with several celebrities during my time in Chicago. Like anyone else, they have to live somewhere too. As a landlord, it’s very possible in Chicago that you’ll be contacted by a celebrity (or a member of their entourage) who is interested in renting your apartment. Here are some do’s and don’ts for dealing with the celebrity renter.

Don't get so starstruck by a famous tenant that you lose your business sense.

Don’t get so starstruck by a famous tenant that you lose your business sense.

Do: Remember that “famous” is very relative.

It might be a professional sports player, a celebrity chef, or a movie star. It could also be a local news anchor, car dealership owner, or even your child’s school principal. Or it could be someone you’ve never heard of, like the bass player from an 80’s hair band or a voice actress from one of your kids’ favorite cartoons. It could even be the author of your favorite real estate advice blog. :) (more…)

Dear Piggy: Help! My new apartment isn’t ready!

pig writing

I was recently contacted by a renter who had lined up an apartment for March 5, or so he thought. On March 1, his new landlord contacted him with a sad confession: they had misinterpreted when the outbound tenant was leaving. His new apartment would not be ready until April 1. He wanted to know his options. This is a situation that occurs more often than you’d think in Chicago. It may not be a 27 day gap like this poor fellow encountered, but a whole lot of renters face at least an overnight gap between when they have to be out of one place and when they can get access to the next.

Not every delay is caused by clerical errors, like the one faced by the poor fellow above. You probably want your new apartment to be clean and fresh for you when you move in. Doing so takes a lot of work, and few large-scale landlords have enough staff members to get every apartment turned over in less than 24 hours as it is. If you want your apartment to be in good shape, you really do need to allow enough time for turnover in between tenants.

Some tenants get unreasonably angry about such delays… and then unreasonably angry all over again when their new apartment isn’t spotless. They wouldn’t fault a fancy restaurant for a little delay while the staff turns over the tables. They generally accept a hotel’s check-in and check-out times if it means that the bedsheets get changed. But when it comes to apartments? The minute a landlord is tardy with the keys, tenants are off to rant about it on Yelp.

Regardless of how you react to the situation emotionally, though, there are five basic routes you can take from a practical standpoint to resolve the issue. If you’re facing a similar situation, here they are, roughly sorted from worst to best.

Break the Lease and Find Another Apartment. (more…)

Rent Bacon: February 2013

Let’s talk about 3 bedroom apartments.

The Rent Bacon index number is an indicator of how a district is performing compared to the HUD Fair Market Rents. Landlords can use it to figure out how much more to charge this year. Tenants can figure out how much more it will cost to move.

The Rent Bacon index number is an indicator of how a district is performing compared to the HUD Fair Market Rents. Landlords can use it to figure out how much more to charge this year. Tenants can figure out how much more it will cost to move.

It’s March. That means it’s time to see how the Chicago rental market performed over the past three months in that fancy statistical analysis we like to call Rent Bacon. As a reminder, we changed formats last month to make this monthly feature more useful. In the process we created a rent index which can be used as a means of comparing value between neighborhoods and gauging how much rent could go up or down over the next year. If you want to read more about what the numbers mean, check this explanatory post about the new Rent Bacon.

This month we’re talking about 3 bedroom / 2 bathroom apartments, and investigating how they’ve performed over the past three months. This is the first time we’ve really looked at 3 beds, which are pretty much the top end in terms of size as Chicago apartments go. You might be able to find something larger in a single family home for rent, but they’re few and far between.

Observation #1: The Gap

In a previous installment of Rent Bacon, I remarked that I saw indicators of people flowing from very expensive Zone 1 to moderately priced Zone 2 when rents got really high downtown. However, that movement didn’t continue from Zone 2 to the even lower-priced Zone 3. My surmise was that the folks who live in Zone 3 – the outskirts of the city – are more likely to move up in size in their same area instead of moving further inwards when their situations changed.

Today in reviewing the index prices we see another potential reason – the gap between Zone 3 housing costs and the inner districts is massive, especially when it comes to apartments large enough to house a big family. Look at the chart above. Look at the gap between the bottom two lines. The average 3 bedroom apartment in Zone 3 is fully 33% cheaper than anywhere else in the city. This is not just a matter of people on the city outskirts loving their neighborhoods. The price gap may be completely insurmountable. A family would have to be earning $84k per year to meet the “affordable housing” limits in Zone 1 or 2. Unless you’ve got a white collar breadwinner or two blue collar/no collar working adults in the family, that just isn’t going to happen.

Observation #2: The winter really blows for 3 beds.

Winter is a tough time to move for the families that tend to occupy 3 beds. It means uprooting the kids from school and packing up a massive amount of stuff during the worst possible weather of the year. The rental market in Chicago generally slows way down in the winter, but for 3 beds it’s a bit more extreme than we see with smaller apartments. All three of the zones saw major drops in the 4th quarter every year going back to 2010. This year has been particularly nasty.

Zone 3’s values took a major hit, falling 11 points since the same time last year and 78 points since the 3rd quarter of 2012. Rent rates actually improved, so the change in value is largely attributable to a glut of extra units coming on the market. As I discussed in an earlier article, January is always a big month for relationships to fall apart and one bedroom rentals spike upwards accordingly. The improving economy has allowed large groups of roommates to split up, which may be resulting in more large units on the market.

Zones 1 and 2 are sitting pretty and showing growth compared to last year. However, the growth is drastically slowed. Last summer the downtown index peaked at 295.65 and the Zone 2 index at 292.99, so we’ve fallen off a bit from those lofty heights. However, when compared with last winter, an equally slow season, the inner districts actually gained 10-14 points.

Zone 1 is seeing static rents and steadily increasing market times. However, this trend should reverse itself once the spring market hits, so don’t count on it being a trend that we’ll see through the year. Meanwhile, Zone 2’s market times are stable, but the rent rates have relaxed a bit and is suffering from a slight inventory glut that’s hurting it’s rent-to-list ratios. Again, this should be remedied by the spring market when a large number of renters suddenly hit the scene all at once to snap up the leftovers from a slow winter season.

Observation #3: That Chart is Too Steep to Sustain

That’s a pretty nasty slope on that chart. Zone 3’s values at their peak last year had inflated to reach downtown’s 2010 values. That kind of growth is far too rapid for renters – traditionally the poorer members of society – to sustain on an ongoing basis. While the rents in Zone 3 have remained largely stable, the rental pace and market demand out there have made it very difficult for someone working 50+ hours a week to find anything good. Meanwhile, in Zones 1 and 2 average rents have increased by between $400-500 for a 3 bed in just 3 years. This means that the average 3 bedroom renter has to be earning between $14k and $18k more in 2013 than they were in 2010. I somehow don’t think that’s realistic.

Chicago has earned the envy of other northern US cities for a long time when it comes to our roomy apartments and comparatively low rents. When you stack downtown Chicago rents against New York ($6000 for a 3 bed) or San Francisco ($4500) prices we’re still pretty cheap. Even so, 18% growth in rents over 3 years is about twice the pace that an average renter can handle. There must be a slowdown. I see it happening within the next 2 years.

everything is going to be alright

The Numbers

Table indicates values for 1 bedroom/1 bathroom rentals based on MLS data.

Average RentAverage Market TimeUnits Rented | ListedIndex
Zone 1
Dec 2011-Feb 2012$252359 days60 | 107261.19
Dec 2012-Feb 2013$254748 days64 | 98271.08
Zone 2
Dec 2011-Feb 2012$218843 days95 | 123226.78
Dec 2012-Feb 2013$233742 days75 | 102241.59
Zone 3
Dec 2011-Feb 2012$149553 days38 | 6760.52
Dec 2012-Feb 2013$157460 days22 | 4749.41

The Zones

The Chicago neighborhood zones remain consistent between this version and the last.

Zone 1 covers central Chicago from South Loop through Lincoln Park. (Actual coordinates: 2000 South to 2000 North, from Western Ave to the Lake).

Zone 2 covers the near North side of Chicago, including Lakeview, Bucktown, Uptown, Lincoln Square, Roscoe Village and NorthCenter. (Actual coordinates: 2000 North to 5200 North, from Western Ave to the Lake.)

Zone 3 covers the Far North and Near South side of Chicago, including Edgewater, Andersonville, Rogers Park, West Ridge, Chinatown, Bridgeport and Douglas. (Actual coordinates: 5200-7600 North plus 2000-4500 South, from Western Ave to the Lake.)


 

I’ll be back on Wednesday with some advice for a renter who got a nasty surprise this month. See you then!

Chicago Apartment Hunting Bingo

For those of you looking for apartments this year, I figured a little bit of humor could help to lighten the task.

This is your apartment hunting Bingo card. Get five squares in a row, and you win! (I don't know what you win. A more enjoyable apartment search than people who aren't playing Bingo, I guess?)

If you don't like your card, hit refresh to get another one.

If you have an apartment-hunting cliche you'd like me to add, leave it in the comments.

Oh, and I should mention: many of these are bad things that occur during showings. Please don't deliberately cause them to happen just to complete your Bingo card. Thanks.

B I N G O
Apartment listed by Realtor Ad says "This one won't last!" Agent parks illegally Messy cable installation job Tenant's pet escapes
Ad with no photos Sleeping tenant Lobby doors that hit each other Apartment doesn't match the ad Passive-aggressive lobby notes
Torn window screen Bidding war Water Included!

(Free)
Ikea "POANG" chair Must remove shoes to view
"Are you familiar with the area?" Questionable posters on walls Loud music in building Agent shows where to put kitchen table Beeping smoke detector
Dark stairwell Padded elevator Missing keys Too messy to walk Grumpy doorman

Reload for a fresh card!

If you enjoy this, please share it. Let me know if you get Bingo!

Dear Piggy: Does anybody shovel around here?

So did any of you have this running through your head last week? I know I did.

Yes indeed, I’m a child of the 90’s and we had snow last week here in Chicago. Quite a bit of it. And it prompted one of my regular readers to send in a question:

Dear Piggy,

How about an entry on how you can be fined if you don’t clear snow from your sidewalks, including tenants¬†(and that you can call 311 if people AREN’T clearing)?

So that means we’re talking about shoveling today.

Who owns the sidewalk? (more…)

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