NBOA Survey Results & What It Means for Rogers Park Multifamily Investors
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Rick Ofman
Advisor, Kiser Group
Kiser Group and the Neighborhood Building Owners Alliance (NBOA) surveyed over 150 Chicago housing providers to determine the effect of the Emergency Rental Assistance Program (ERAP) on the rental housing market in the Chicago area and its impact on rent collections and the neighborhood housing landscape since the onset of the pandemic.
The respondents collectively own approximately 27,000 rental units throughout Chicagoland. As was the case with previous survey iterations, over two-thirds (approx. 70%) of the respondents consisted of small and mid-sized housing providers who own fewer than 100 rental units and/or own ten or fewer buildings.
The data shows that many [Rogers Park housing providers] still struggle with collections, occupancy and rent growth.
Only 49% of respondents indicated they have received 95% of collections or more (a level considered stable by the industry) for the month of June 2021. This is statistically the same level (46%) of respondents who indicated this level of collections in March 2021. Thirty percent of respondents indicated they have received less than 85% of collections (i.e., they are at risk of foreclosure) for the month of June 2021. This is statistically the same level (27%) of respondents who indicated this level of collections in March 2021. Sixty percent of respondents indicated that either they or their tenants applied for ERAP. As of late July, over half of all respondents indicated they have yet to receive ERAP funds.
While the survey provides insight into the city as a whole, I found myself wishing we had data broken down by neighborhood as well. Housing providers in Rogers Park must have experienced the last 18 months differently than housing providers in Bucktown, right? With this thought in mind, I reached out to a handful of Rogers Park housing providers who also own properties in other neighborhoods. This group of housing providers owns and/or manages 7,500 housing units of which roughly 2,000 are in Rogers Park.
Housing providers voiced major concerns about the ever-increasing leftward shift of the political landscape, soaring assessments, and high levels of crime in the neighborhood.
These housing providers as a whole are on a path to recovery, seeing better collections and lower vacancy. At the same time, the data shows that many still struggle with collections, occupancy and rent growth. Though some were able to increase rents and stop waiving move-in fees in June, the majority of housing providers are content to just keep their units occupied at static rents.
During the first phase of the pandemic, Rogers Park housing providers appear to have experienced less vacancy than other North Side owners. Some attribute this to the relative affordability of the neighborhood, while others believe the only reason they were able to rent anything was Loyola’s decision to close its dormitories. Now that Loyola’s dorms have reopened, many housing providers find themselves dealing with increased turnover and are struggling to get those same units rented.
As of late July, over half of all respondents indicated they have yet to receive ERAP funds.
Interestingly, each of the housing providers I interviewed pointed out that their larger units (two bedrooms and up) were leasing quickly at pre-pandemic rates. The vacancies in Rogers Park are overwhelmingly studio apartments in buildings with 30 or more units. Overall, the feeling is that Rogers Park has fared better than many of the neighborhoods on the North Side; nevertheless, these same housing providers voiced major concerns about the ever-increasing leftward shift of the political landscape, soaring assessments, and high levels of crime in the neighborhood.
Despite these concerns, investment in Rogers Park multifamily is at an all-time high. According to CoStar, multifamily sales in Rogers Park in the first eight months of 2021 have already surpassed sales in 2019. Compare this with multifamily sales in Edgewater/Uptown, and we see a wildly different picture:
Evidently, investors believe in the future of the Rogers Park rental market. In May 2020, I predicted COVID-19 would be in our rearview mirror by August 2021 at the latest. For a while, it looked as if I had finally made an accurate prediction. But the Delta variant had other plans. All of us find ourselves in what feels like the same spot we were in last summer, masking up indoors and worrying about the fall rental market. At least this time, we can draw upon our experience as we look toward the end of 2021 and beyond.
