Mayor Johnson has lost his mind, and it's about to displace an entire community of renters. The Mayor has proposed sweeping rental laws that will cause housing for low to middle income homes to become even more scarce and much more expensive. Let's break down what we know about his new proposal for rental units that he is pushing through city hall using the few city officials that are left on his side to get around the normal process to get this proposal up for a vote.
The Four Main Points of the Protecting Renters Ordinance
1. Establish a rental registry and charge between $20 and $60 annual fee per rental unit an owner has
2. Establish the Bureau of Rental Housing Services: This department would offer free eviction help for tenants, and provide compliance guidelines to landlords
3. Fee Bans & Transparency: no more hidden junk fees, also bans on application fees and move-in fees, and the need to disclose if you used AI to come up with pricing
4. Just Cause Evictions: if you non renew your tenant you will need to pay up to 10k in moving costs for them
Establish a Rental Registration and Charge an Annual Fee
In Chicago 15 years ago, we had a similar law and buildings had to be registered. On its face I see nothing wrong with it, however, what scares me is if it turns into the city trying to do inspections for rentals like they do in the suburbs. Currently it takes about 60 to 90 days for a CHA tenant to get approved to move in to a home. If we spread that across the full city and all of the renters housing may be unattainable for most of the city's residents that need to find a new home. A side note on the $20 to $60 fee, it's just going to be added to the rent, making rent more expensive. Building owners that are trying to hide that they are renting homes because of the stiff rules around ancillary units in a building are still going to hide those units and the good landlords will pay and pass the fees to the renters. It will not really solve any issue for renters, but honestly If the city has the resources to keep up with it I don't think as a landlord its a big deal unless they start to implement inspections.
Establish the Bureau of Rental Housing Services
The money from those fees will establish a new agency that will have money to give tenants to hire an attorney for their evictions. Here's the thing: the majority of evictions are due to tenants not paying their rent. In no other industry does the city come in to delay the time to enforce your contract. Can you imagine a world where when a dealer tries to repossess a car, the city steps in and makes them go to court for 8 months before they are able to do so? What about utility companies turning off power, gas, and water? I think we should not allow them to turn off those services until 8 months of court appearances, and the homeowner or tenant should get free attorneys to defend them. Personally, I've been threatened at gun point by a tenant and it took over 8 months to get him out of our unit. The fact that the city thinks that's what is good for the city is crazy. I would love to see what the mayor's office will actually use this bureau for, as odds are it won't be to help people actually struggling in the city. Just a few years ago, while hundreds of African Americans were being evicted and left homeless, the city was giving free housing to the migrants. (I don't think that is a bad thing, but the offer for free housing should also go out to the generational Chicagoans).
Fee Bans and Transparency
I am 100% for transparency on fees, however, we should have a free market when competition brings down prices. When you try and control pricing, competition goes away and all prices go up. This over time will just make rent more expensive for all renters. And as we see in cities like New York, when you try to control rent you get buildings with tons of building violations as the landlords cannot keep up with the maintenance needed. I think what the city needs to realize - and by city, mostly the city's housing committee - is that the average landlord isn't Donald Trump or Blackrock. The average landlord in Chicago is someone who bought a building with the little savings they had. They're using their rental unit income to try to survive and support their retirement, which has gotten harder and harder to do with increasing inflation and lack of things like pensions that the members of the Chicago City Council get but we never will. I would suggest focusing on the big companies like insurance and their absurd pricing throughout the state and city. The fact that a drug can cost $3k for someone but only $50 for someone else just depending on which insurance they use is crazy. Also, lets get a system like California where property tax values are frozen when you buy a home. Rent has risen so quickly the last 5 years because in Chicagoland property taxes have risen 10x.
Just Cause Evictions
Rent control does not work. I'll even write it twice: Rent control does not work. There are ways to keep prices down for renters: lower property taxes and make it easier to build, thereby lowering prices. But limiting the ability for a landlord to raise rent to keep up with the cost of living and expenses from the city and things like insurance would be a much better solution. The proposal for just cause eviction says that if you send a rent offer to a tenant that they deny you could owe them anywhere from $10k to $20k in moving costs. This just means to be profitable, I would have to rent an apartment that currently rents for $800 dollars for closer to $3k a month. Again, if the city wants more stabilization they need to look into stabilizing property taxes and insurance prices before trying to make the real estate industry have to deal with new laws.
Real Estate Groups
If you are a landlord, you need to get involved with groups like NBOA, The Chicago Association of Realtors, and many other REI groups. If we don't ban together, the city is going to ruin housing in Chicago, and last time the city ran housing we had the projects - one of the worst ran buildings in Chicago history.
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