Where the apartments are being built: Suburban Chicago takes the lead

Over the past decade, the number of renters choosing the suburbs over downtown for space, amenities and affordability has grown.

Suburban Chicago apartment construction has surged as a result, now outpacing downtown activity by more than seven to one.

This suburban apartment construction momentum has been building for several years, with demand spread across demographics. From empty-nesters looking to shed their homes to young professionals waiting out a challenging housing market to remote workers seeking more space, more renters are choosing suburban living for flexibility and value.

Development costs and demand both on the rise

This year, about 5,700 new apartment units are under construction across Chicago’s suburbs, according to data by Integra Realty Resources, compared with a projected 800 in the downtown core.

Much of the downtown construction slowdown is due to cost escalations; Chicago construction costs rose by 5.67% year-over-year in the first quarter of 2026, according to Mortenson’s Construction Cost Index.

While rising materials costs and elevated interest rates are a factor in every market, land prices in desirable Chicago neighborhoods like Fulton Market have skyrocketed. Further compounding costs are Chicago’s higher permit fees and union labor requirements, all of which make city projects structurally more expensive than suburban ones.

Add to that the city’s Affordable Requirements Ordinance as well as ongoing tax uncertainty, and downtown deals become harder to pencil out. The suburbs, with lower land acquisition costs and fewer regulatory layers, offer developers a cleaner path to a viable return.

Even as construction in the city slows, however, renter demand across Chicagoland has not. Suburban occupancy rates hover around 97%, according to Integra, with rent growth projected at about 3% in 2026.

Many Northern suburbs have seen stronger rent growth than the city over the past five years. The Des Plaines-Arlington Heights submarket, for example, saw a cumulative 24.8% increase in rents over that time, compared to 21.0% in Chicago, according to CoStar data.

The emergence of the suburban class A building

Compared to the bland apartment complexes that defined the category a generation ago, modern suburban communities are much more lifestyle focused, with pools, fitness centers, coworking spaces and design details that in the past have typically been exclusive to downtown high-rises.

Developers also gravitate toward class A, mixed-use projects as the live-work-play convenience helps maximize their investment by attracting and retaining quality tenants.

One example of these trends is Arbor House, a luxury apartment community developed by Bradford Allen that recently opened at the corner of Arlington Heights and Algonquin roads in Arlington Heights. The eight-story, 301-unit building features high-end finishes and offerings such as quartz countertops, custom cabinetry, keyless entry and in-unit washers and dryers, with private balconies or patios in select units. Additionally, the building uses concrete construction to provide superior sound dampening.

Designed to rival anything downtown, the 17,500-square-foot amenity package includes a resort-style outdoor pool and spa, state-of-the-art fitness center with Peloton cycling and dedicated recovery space, golf simulator, multiple coworking areas, covered parking and pet-friendly amenities including an on-site dog run and washing station.

However, this isn’t a one-off apartment building development, as Arbor House will anchor the Arlington Gateway mixed-use master plan. The project will reimagine the southeast entrance to Arlington Heights as an all-in-one district that puts housing, retail, employment and other daily needs all within reach.

The former Daily Herald building, now branded as Arlington Med, is being redeveloped as part of the plan into a 150,000-square-foot, state-of-the-art wellness center focused on providing patient-first experiences.

Municipal partnership creates a more predictable development environment and is critical to the viability of suburban mixed-use projects at this scale. In Arlington Heights, that coordination has been especially productive, with village leadership helping advance a shared vision for Arbor House and the broader Arlington Gateway district.

What comes next

Suburban apartment construction is expected to continue outpacing downtown Chicago through 2027. The structural economics that favor suburban development are not going away anytime soon, and the renter appetite for well-designed, amenity-rich suburban communities has only grown.

What started as a gradual shift has become the dominant story in Chicago-area apartment development. The economics of building downtown have grown increasingly difficult, renter demand in the suburbs has stayed strong and the quality of what is being delivered continues to rise.

The mixed-use communities opening across suburban Chicagoland today are the product of more than a decade of momentum, turning what was once a secondary market for apartment developers into a primary one.

• Brian Carley is senior vice president, development, at Bradford Allen.