While the huge number of new of apartments downtown is going to lead to fewer competing applications for the same apartments this year, competition will still exist in trendy neighborhoods outside of the central business district. Some renters think that landlords make knee-jerk decisions on which applicants to choose for apartments based on very simple differences such as who offers more money, who wants to stay longer, or who wants to move in first. Others may think landlords choose their tenants based on illegal data such as race, age or occupation.
The purely financial differences, when they exist, do make it easier to decide between applicants. The latter differences, which are must be excluded from a landlord's choice per fair housing law, can actually make it much more difficult to decide. The fear of lawsuits (and it is usually the fear of a lawsuit rather than any legitimate support of fair housing practices) may cause landlords to ignore details that would otherwise be critical red flags for high risk renters. Frequently though, the choice depends on neither financial nor protected factors.
To shed a little light on the thought processes a landlord might go through in choosing between multiple applicants, today we have for you four different scenarios. In each scenario you will have two applicants to choose from. Let us know in the comments (either here or on Facebook) which ones you would choose if you were the landlord - there is no right or wrong answer, and in fact the real right answer might be to reject both applicants and wait for someone else.
For all scenarios, assume all factors other than the ones stated are equal. Just to make things more interesting we have included some extra details about some applicants to make things a little more realistic.
Scenario 1: Cramped Quarters
The apartment: Vintage 2 bedroom/1 bath in Avondale. 2nd floor walkup. $1500.
Application #1: Single mother with 4 children ages 2 to 10. Monthly income: $4500. Credit score: 690.
Application #2: Self-employed single web developer, works from home. Monthly income: ranges from $0 - $15,000. Credit score: 700. Continue reading Which Tenant Would You Choose?
Recently the New York Times ran this short article about the complexities of breaking an apartment lease in New York City. A friend of mine who is a broker at a Chicago leasing agency posted it to my Facebook with the comment, "would love to hear your take on the subject under Chicago's RLTO. We get a lot of people looking for off-season re-let help for peak-season leases. It's a rough world."
Quick answer: if you know what you're doing, it can be very easy. When I was trying to find a sub-lessee for my old apartment in 2007, it took me about a week despite it being a vintage top floor walk-up in Rogers Park during the off-season. But at that point I'd already been showing property professionally for 2 years and I knew both a) what my landlord required and b) how to pitch an apartment. If you don't know what you're doing, it can be obscenely difficult. Case in point, my friend whose departure from her Chicago apartment for the Netherlands wound up involving two attorneys, a Realtor, a middle of the night move-out and some serious fretting that her landlord would come in during the workday and poison her pets.
So how can the same starting situation wind up so vastly different? There are, as I'm sure you can guess, a number of factors involved. Continue reading Dear RentConfident: How Difficult is it to Break a Lease in Chicago?
Bill collectors knocking on your door and barging in with cameras. Doors kicked in. People in handcuffs. Class 4 Felony convictions. It's all part of your average day for the employees of... Rent-a-Center? Today we'll be looking at the strange world of the "rent to own" furniture industry and how it affects a subset of Chicago's renters, namely the lower income sectors.
Rent to own, or "RTO" to use the industry shorthand, is a huge industry in the US bringing in $8.6 billion in revenues nationwide in 2016 according to the Association of Progressive Rental Organizations. As points of comparison, the construction industry was recently bringing in about $13 billion and the financial services industry brought in about $17 billion per year according to Inc Magazine's list of the biggest industries in the US.
Note that this article does not address the concerns of rent-to-own within a housing context. That deserves an article of its own, which will probably appear here within the coming weeks. Today we are only talking about the businesses that offer rent to own furniture, electronics and appliances.
A Big Industry with Little Oversight
Given the size of the industry, legislation governing its practices is largely absent nationwide. In Illinois there is one mention of rent to own business practices. It's in the criminal code, sections 720 ILCS 5/16-1d and 720 ILCS 5/16-3a. It states that failure to return leased personal property within 10 days of receiving notice of non-payment is considered a Class 4 Felony. (Note that the same section addresses car rentals and library books.) Continue reading The Predatory and Abusive Industry of Rent-to-Own Furniture
You may not know it, but on the first Tuesday of every month we send out an email newsletter to a bunch of our friends and customers. Normally we do not duplicate content between the newsletter and the blog. However, given that the two audiences do not really overlap and that this month's newsletter dedicated a substantial amount of time to the new laws that went into effect in the state of Illinois and city of Chicago, we are reproducing that section of the newsletter for our article this week.
With the start of the new year many new laws have gone into effect at the federal, state and local level. Of particular interest to Chicago renters are the following:
New Tax Laws. Of particular concern for renters, especially low income renters, are new federal income regulations that are predicted to decrease the amount of available funds for charitable donations. While many charitable individuals make donations for personal reasons, there is no denying that their tax-deductible nature has been an incentive for many years. With more money going to taxes, fewer incentives to itemize deductions and more limits on charitable tax deductions, non-profits may struggle in the coming year. This includes service organizations that help low-income renters with many facets of daily life and in times of crisis. Continue reading New Laws for 2018 Affecting Chicago Renters