Small landlords in Chicago face challenges as rising costs threaten affordable housing
Chicago: You know, when we think about small businesses, we often picture cute shops like cupcake places or cozy bookstores. But there’s another group of small business owners that’s super important: the landlords who provide housing.
These folks, often called “small housing providers,” own a few of those classic six-flats or similar buildings. They play a big role in keeping our housing market healthy.
Many people think affordable housing comes from government programs, but actually, a lot of low- to moderate-income families in Chicago rely on what’s called naturally occurring affordable housing. This is just privately owned, affordable places that don’t need government help. It makes up a whopping 75% of affordable rentals across the country, and in Chicago, most of it is in smaller buildings.
For example, back in 2021, about 30.7% of the rental units in Chicago that were under $900 a month were in two- to four-unit buildings, and most of these are owned by small landlords who manage fewer than 10 properties.
But here’s the kicker: these small landlords are facing some serious challenges. Many of these smaller buildings are being turned into single-family homes, which is a big loss.
Plus, with rising costs and limited financing options, some of these small owners are having to sell their properties to bigger investors, often from out of town. If that happens, we could see rents go up, and the need for government help could grow, especially with the uncertainty of the next presidential administration.
It’s tough to say what will happen if Trump gets back in office. We might see even fewer housing subsidies. That’s why it’s crucial to support the small landlords who are working hard to keep affordable housing available.
On a bigger scale, it’s important that these small landlords get the same benefits from the Small Business Administration that other small businesses do.
Another big issue is getting access to capital, especially in neighborhoods that have been neglected, like the South and West sides. Financing is key for buying and fixing up affordable rental buildings.
Community development financial institutions are super important here. They’re nonprofit lenders that really know their markets and can help finance local projects, including affordable housing, when bigger banks can’t.
These institutions also work closely with their borrowers, making sure small landlords have the tools and knowledge they need to succeed.
Education is another crucial piece of the puzzle. My organization, the Community Investment Corporation, helps small landlords with property management training. This training is essential for keeping housing safe and strong.
We need more programs like this across the country to ensure all housing providers can take good care of their properties.
Lastly, it’s been a problem that many local and state politicians have made affordable housing policies without talking to the small landlords. We need to make sure these landlords have a say before decisions are made.
Small, responsible landlords might not have the charm of a cupcake shop or the nostalgia of a bookstore, but they’re just as vital to our communities. It’s time we recognize their importance in keeping Chicago’s affordable housing alive and ensuring our neighbors have safe, stable homes.
Stacie Young is president and CEO of Community Investment Corporation in Chicago.
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