Post-Recession Economy Creating Surge of New Chicagoland Apartments
Fueled by a diverse mix of millennials to empty nesters, more than Fueled by a diverse mix of millennials to empty nesters, more than 1.2 million people now live in Chicagoland apartments
WASHINGTON, D.C. – The apartment industry emerged as one of the strongest sectors coming out of the Great Recession, and a new study shows just how much the economy of the Chicago metropolitan area benefited from the rental boom. More than 1.2 million people now live in apartment homes across Chicagoland, supporting 308,000 jobs. Apartment construction in the metropolitan area is booming too, with more than 7,400 new units in larger developments (defined by 5+ units) under construction in 2014, which is about twice as many as each of the last years since 2008.
"Chicagoland’s apartment demand remains very strong, and current supply is at the highest volume in a decade. Healthy economic growth is restoring the area's employment base to pre-recession levels, with an increase in high-skill, service-oriented jobs," said Gary Lundemo, vice president of The Habitat Company and also board president of the Chicagoland Apartment Association (CAA). "The rental influx has been fueled by demographic changes like the growing millennial population and a rediscovery of metropolitan urban cores."
The study measures 2013 (the most recent data available), showing that in Chicagoland the local economic contributions from the apartment industry totaled $29.8 billion, supporting more than 308,000 jobs. The revenue is generated through:
- Renter spending in Chicagoland contributed $23.6 billion to the local economy;
- The economic contribution of local apartment operations totaled $5.2 billion;
- The economic contribution of local apartment construction totaled $926.6 million.
"Here in the Chicagoland area, we're feeling the positive economic impact of the booming apartment industry, which is helping our city thrive," explained Mike Mini, executive vice president of the CAA. "The great news about the apartment industry is that the dollars and jobs don’t end with construction. The ongoing operations and resident spending make each apartment community an economic engine, supporting local jobs and making a positive economic impact in our area."
Mini continued, “The Chicagoland Apartment Association is committed to ensuring that policymakers and community leaders understand the value of apartments to their constituents and neighborhoods. It’s in everyone’s best interest to support policies that encourage continued apartment growth and development, and avoid unnecessary regulation that threatens to derail it.”
The economic data was commissioned by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA), which looks at dollars and jobs from apartment construction, operations and resident spending, nationally, by state and in 40 specific metropolitan areas, including Chicago. The data, based on research by economist Stephen S. Fuller, Ph.D., of George Mason University’s Center for Regional Analysis, is available at www.WeAreApartments.org.
"Our study showed major increases around apartment construction, with construction spending, economic contributions and personal earnings all rising substantially,” said Fuller. “The construction for multifamily apartment buildings is a significant and growing source of economic activity, jobs and personal earnings in communities nationwide."
Tom Beaton, chairman of the NAA and senior vice president of The Dolben Co., added, "According to our study findings, apartment construction has been on the rise over the past five years. In 2009, during the economic recession, there were only 97,000 construction starts, which was the lowest level since records began in 1964. In comparison, there were 294,000 construction starts in 2013 – a significant increase.”
“The most visible sign of the rental resurgence – apartment construction – is on the rise, contributing $93 billion to the national economy in 2013, resulting in $30 billion going directly into the paychecks of more than 700,000 workers," said NMHC Chairman Daryl Carter, CEO of Avanath Capital Management. “Besides all the dollars and jobs, the increase of available apartments will also help address affordability challenges that we see in many markets across the U.S.”
In conjunction with the study’s release, the website www.WeAreApartments.org breaks down the data by each state and 40 key metro areas. Visitors can also use the Apartment Community Estimator – or ACE – a tool that allows users to enter the number of apartment homes of an existing or proposed community to determine the potential economic impact within a particular state or metro area.
For more information, visit www.WeAreApartments.org/metro/chicago.