It’s gotten a lot cheaper to rent an apartment in Evanston recently.

Newly released data from the U.S. Census Bureau shows that over the past three years Evanston renters have gone from having to pay much more of their income to rent an apartment than the statewide average, to paying much less.

In 2005 Evanston 55.1 percent of Evanston renters spent 30 percent or more of their income on rent and utilities. By 2007 that was down to 41.5 percent.

By contrast the statewide average has stayed at or just above 46 percent over the three-year period. For the City of Chicago the figure has stayed at just under 51 percent.

This year renters in Aurora, Joliet and Waukegan also are typically paying a higher share of their income on rent and utilities than renters in Evanston.

The dramatic increase in the number of condominium units available for rent in Evanston as a result of the slowing home sales market is the likely cause of the shift.

By contrast there’s been little change in the affordability ratio for Evanston homeowners who are paying off a mortgage.

In 2005, 42 percent of them paid more than 30 percent of their income on housing costs. The figure rose to 43.5 percent in 2006 and eased slightly to 42.8 percent in 2007.

For each year the Evanston figure was above the statewide average of about 38 percent, though lower than the figure of around 50 percent for the City of Chicago.

Back in 1999 only 30.2 percent of Evanston homeowners with a mortgage spent more than 30 percent of their income on housing costs.

Of course home values in Evanston have risen dramatically during that time. The Census Bureau says the median value of an owner occupied home in Evanston rose from $290,800 in 1999 to $429,700 in 2006, before easing to $424,300 in 2007

Related story

More homeowners reach tipping point on housing costs, study shows (Chicago Tribune)

Bill Smith is the editor and publisher of Evanston Now.

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10 Comments

  1. Bill – interesting but not sure what to make of it?
    Bill – number would appear to state that it is cheaper to rent here? But it also could be number of lower income house holds have just left – thus the percentage now has more higher income house holds.
    I thought I have heard recently the number of section 8 renters has gone down by 1/2 in five years.

    Liz Tisdahl is worry no one diverse would run for alderperson – maybe she should worry more about the effect of high taxes and fees that really are driving people out of town.

    Clearly all the fees they keep adding effect the lower income renters. Aurora, Joliet and Waukegan are communities with a very high number of lower income residents thus this could account for the high percent of house hold income they pay for rent.

  2. Rents are Higher
    The data below was taken from the census web site. It compares the 2006 American Community Survey with the 2000 Census. Even if you exclude the “no cash rent” and bottom 2 categories the average rent went up.

    So the drop in rent-to-income ratio is attributable to incomes going up. Low income renters get priced out of an invididual city than they do the entire state of Illinois. That may well be the driver of the average of renters’ incomes in Evanston going up.

    Stil, the cost to own has gone up much more than cost to rent from 1999 to 2005 – due to property values going up and tazes and maintanence costs.

    Sorry about the formatting folks. I do not see how to format the table better in a comment.

    2006 ACS

    Renter-occupied units 11,477 +/-1,566
    GROSS RENT
    Less than $200 388 +/-292
    $200 to $299 47 +/-78
    $300 to $499 299 +/-224
    $500 to $749 1,944 +/-677
    $750 to $999 3,161 +/-905
    $1,000 to $1,499 3,234 +/-1,028
    $1,500 or more 1,721 +/-610
    No cash rent 683 +/-502
    Median (dollars) 958 +/-77

    Census

    Specified renter-occupied units 14,029 100
    GROSS RENT
    Less than $200 3582 .6
    $200 to $299 207 1.5
    $300 to $499 600 4.3
    $500 to $749 3,451 24.6
    $750 to $999 4,799 34.2
    $1,000 to $1,499 3,071 21.9
    $1,500 or more 1,205 8.6
    No cash rent 338 2.4
    Median (dollars) 856 (X)

    1. Drowning in data
      Hi Stephen,
      You’re drowning us in data.
      All you need to make the point is the median rent number — which has gone up over the period from 2000 to 2006.
      Bill

      1. drowning in data
        Bill,

        I understand. I sometimes forget that not everyone is as much of a data hound as I am. Is it possible to put attachments in a reply? That would probably be a better way to present the stats. I do like to support my statements with facts. There are a lot of “yeah but the numbers could be misleading” type responses when statistics get cited.

        For me the detailed data leads to other questions which I did not discuss in my reply.

        1. Attachments
          Hi Stephen,

          Sorry, attachments aren’t available for comments.

          But if you can include attachments in a blog entry.

          Look for the “File attachments” link on the blog submission form.

          And you could then link to the blog entry, or directly to the attachment, from your comment — as long as you know how to create an html anchor tag.

          Bill

        2. I think data is good
          I like the fact Stephen included the data because I have read several articles by Bill and Junad that explains views or arguments unsupported data or citation to the data. Yes, data can be misleading but at least I get to see it too.

  3. Renters are getting squeezed too
    The conclusion (and headline) that Evanston is “more affordable for renters” is contrary to what was reported in the Chicago Tribune yesterday about household housing squeeze generally and is not accurate because (a) it uses as a baseline the 2005 estimated figures, which are clearly a slightly off sample, and (b) it relies on 30% of income as the turnpoint, when the more commonly used number for household-hardship is when housing costs exceed 35% of income.

    The data for 2000 (which is much firmer), 2005, 2006, and 2007 shows, first, that income in Evanston, after inflation, has been flat, even declining slightly (using three different measures: median household income, mean income of households with earnings, and per capita income). If you look closely you can see the continuing squeeze on the middle class, especially since 2001, right around the 60th percentile, while the floor to get into the top 5% continues to get a little further out of reach.

    It would be reasonable to assume that the average renter’s income is significantly lower than the average homeowner, but I have not verified that.

    The data then shows a rather dramatic drop in the total number of renter-occupied units, from over 14,000 in 2000 to about 10,500 currently (in the last three years the figures bounce around from a low of 9,918 in 2005 to a high of 11,477 in 2006, because the 2005-2007 numbers are only estimates, with high margins of error due to sample size).

    What has been increasing are the numbers of rental units for which there is “no cash payment.” The likely explanation for this is that many students’ parents bought condos for their kids to live in. Another possibility is an increase in live-in relatives, multigenerational housing. Unless the census-takers are counting unoccupied condos, and I don’t think that’s so.

    However that doesn’t account for all the rental unit loss; it’s hard to escape the conclusion that condo conversion has decreased rental availabilty. Altho the upside of that should be that % of home ownership has increased.

    As you would expect from supply and demand, rent has not gone down. Median rent went from $856 in 2000 to $1,104 in 2007. There are a number of deflators to use, but by any measure there has been at least a slight increase, possibly as high as 7% (mean would be a better figure than median here but it’s difficult to break that out).

    Median doesn’t tell the whole story; the number of units under $500/mo. has declined significantly, while the number of units renting for over $1500/mo. increased from 1200 in 2000 to over 1700 in 2006. Logically, it seems there must be a stasistical “bulge” just below the median.

    Since total units are down, rents are slightly up, and income is flat to declining, one would expect the % of households paying 35% or more of their income on rent to have increased, and indeed that’s the case. In 2000 it was 34%, and in the last three years it was 49%, 45% and 37%, respectively. That does show a “drop” if you look only at the last three years, but still shows an overall increase since 2000. Probably the real number is somewhere between all those.

    Note that Evanston historically has been high in terms of the % of income that residents spend on housing.

    Again, the interim numbers — which don’t make a lot of sense given other trends — reflect estimates based on samples, and have pretty large margins of error. Since those sampling errors exist for both income and rent, it would be a mistake to regard a combo of those two as firm, but the trend seems pretty clear.

    Units are easier to count than incomes, especially when students — who often have no to low income — figure into the mix. Overall, there are fewer rental units, and especially fewer bargain units.

    Ultimately, fundamental supply-demand would predict a condo glut to result in a price drop as well as more rental units available, and what you say has happened would in fact come to pass. However, people can be stubborn when it comes to real estate, clinging to the value they want rather than the value they can get, defying what “laws” of economics dictate; I have seen many, many property-owners over the years let space sit empty rather than reduce rent. In a liquidity crisis you’d think this would be less so, but I am not holding my breath.

    The numbers are attached below.

    “Strange women lying in ponds, distributing swords, is no basis for a system of government.”

    All figures from US Census; all numbers in current dollars unless stated otherwise; inflation deflators from US Dept of Labor CPI and GDP deflator.

    Median household income

    2000: 56,335
    2005: 58,940
    2006: 62,138
    2007: 69,303

    Mean income of households with earnings:

    2000: 78,944
    2005: 96,878
    2006: 95,988
    2007: 100,251

    Per capita income:

    2000: 33,645
    2005: 41,915
    2006: 41,361 ($2006)
    2007: 42,445

    After adjusting for inflation, all three of the above measures are flat or even a slight decline. Note the recurring anomolous 2005 figures, suggesting sample skew.

    Renter-occupied units

    2000: 14,029
    2005: 9,918
    2006: 11,477
    2007: 10,382

    Note the 2005-2007 discrepancies due to sampling.

    Median rent:

    2000: $856
    2005: $936
    2006: $958
    2007: $1,104

    This is about 1/2% to 7% higher after adjusting for inflation, depending what index is used.

    Units under $500/mo

    2000: 1,165
    2005: 728
    2006: 734
    2007: n/a

    Units over $1500/mo

    2000: 1,205
    2005: 1,687
    2006: 1,721
    2007: n/a

    “No cash rent”

    2000: 338
    2005: 236
    2006: 683
    2007: n/a

    Households paying 35% or more of income on rent

    2000: 4,793 (34%)
    2005: 4,865 (49%)
    2006: 5,160 (45%)
    2007: 3,843 (37%)

    Again note the odd jumps; clearly sampling error is involved.

    Note also that the % of households paying more than 35% increases from 2000-2007 even tho the absolute number decreases; this is because overall the number of renter households dropped so much.

    1. Read it again
      Hi Jeff,

      Please re-read the Chicago Tribune story. It says absolutely nothing about renters.

      Once you acknowledge that, perhaps we can have a discussion about your other observations.

      Bill

  4. What are we trying to discuss?
    Bill –

    I think regardless of numbers common sense is unless rents have dropped how could Evanston be more affordable for renters? Prices keep on going up, as we also all know the taxes and fees here keep going up.

    If rents have not dropped then we must have more higher income renters.

    I also think lower income renters are clearly being pushed out – Jeff only posted mean and medium income -if you break it down by race – there is quite a difference in household income. Where are most of the forclosure in the minority neighborhoods which have lower household income.

    The majority of the expensive condos in downtown – are clearly being purchased by people making over $100,000 a year.

    Our leaders for years here believe the solution is affordable housing – it is affordable taxes -that is we need to keep real estate taxes lower to keep moderate income families home payments low. This would also lower rents. The city affordable housing programs have been a waste of taxpayer money, and clearly looking at the trends point to a complete failure.

    While some like Mr. Who think the answer is tall buildings the answer lies in a smaller city government using less taxpayer money – and not council members giving themselves medical benefits.

    1. Common sense?
      Hi Junad,
      “Affordability” is determined by the percentage of household income that households spend on rent (and in this census survey on utilities as well).
      If household income rises faster than rent and utilities, then housing is more affordable.

      The survey only considers people who actually live in a community. So, yes, if all the poor renters in Evanston were replaced overnight with rich renters, then rental housing in Evanston would be more affordable for the people who live here.

      However, the same census study shows little change in the actual percentage of persons living in poverty here.

      So your theory that poor people are being pushed out is not supported by that data.

      Bill

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