Jobs, infrastructure driving multifamily development in northwest suburbs
As downtown Chicago continues to see unprecedented commercial real estate growth, the Northwest suburbs are also seeing increased development. Suburban business hubs are attracting employers seeking to tap the highly educated talent pool in suburban Chicago. And, vibrant downtowns with ample retail and entertainment options plus new rental communities convenient to suburban business hubs like Itasca - home to M&R Development - are attracting a new generation of renters by choice.
According to RENTCafe, suburban areas nationwide are seeing renter household gains in 19 of the 20 largest markets. In suburban Chicago, 43.9 percent of households are rentals, representing a 12 percent increase from 2011-2017, double the growth of renter households in Chicago. Chicago's suburban apartments on average are also seeing higher occupancy than those in downtown Chicago. Per Integra Realty Resources Inc., rentals in northwest Cook County enjoyed a 95.4 percent occupancy in the fourth quarter of 2017 while apartments in downtown Chicago during the same time period saw an average of 92.6 percent occupancy.
Job growth creating need for housing: A key driver of resident attraction and retention in secondary markets is job growth. Between 2010 and 2017, job growth numbers in suburban Chicago counties have been trending upward. Will County alone showed a 30 percent increase in jobs during that period while DuPage County saw growth of 16 percent and Lake County ended 2017 with a 10 percent increase in jobs added since 2010 (according to the Illinois Department of Employment Security's "Where Workers Work" publication).
As we keep a watchful eye on job numbers in our backyard, these are promising figures with a direct impact on multifamily development. Job growth, combined with the many older adults selling their homes for a more carefree lifestyle and a new generation entering the workforce that prefer renting to owning, the population of renters by choice will undoubtedly continue to increase.
Renters by choice flocking to suburbs: We have been active in developing rental housing across Chicagoland for 22 years. And, our success comes from zeroing in on the features that create an attractive lifestyle option for renters by choice. A combination of upscale amenities commonly associated with downtown luxury buildings - pools, spas, and ample community gathering spaces to name a few - and a management philosophy that provides personalized service to every resident are key to building a successful rental community in a suburban setting.
Of course, location plays an important role. As jobs are added, renters by choice seek housing options that provide convenient access to downtown districts, a variety of entertainment options and a wide selection of retail experiences. We know this first hand from completing The Residences at the Grove in Downers Grove in 2009, Regency Place in Oakbrook Terrace in 2007 and The Residences of Wilmette as well as The Residences at Hamilton Lakes in Itasca in 2017.
Infrastructure driving development: Another reason why rental developments will continue to see increased popularity in suburban areas is the strong transportation infrastructure. Whether those are public transit or highway improvements, projects that enhance mobility for area residents represent another impetus for increased commercial development. In Chicago's northwest suburbs, where personal vehicles dominate the transportation landscape, highway improvements are key to increased commercial development.
One of the most notable infrastructure improvements is the Elgin-O'Hare Western Access project which will dramatically improve mobility in the area while also providing western access to O'Hare. • Anthony Rossi Sr. is president at M&R Development in Itasca.