In Hot Rental Market, Appeal Of Attic Apartments Growing
Chicago — Nate King, 23, came to Chicago in search of an adventure. Timothy Englert, 25, wanted to pursue a career in improv.
From the same small town in New Hampshire, the two moved out of their parents’ homes and stuffed their belongings into Englert’s Hyundai Sonata last spring hoping for new opportunities.
The only problem was neither of them had jobs, and neither had a place to live.
“A lot of the places fell through when they found out that we didn’t have jobs,” Englert said. “You’re a leper if you don’t have a job.”
With assistance from a local realty company, they signed a lease in the gentrifying neighborhood of Logan Square — the price was right, but it’s a steep climb to get to their unit. Like a growing number of people, they settled on an attic apartment.
As the demand for apartments has increased since the Great Recession, economists say, more landlords are converting unused spaces such as attics and basements to accommodate tenants. A growing number of demographically diverse people are choosing to rent, and some are even willing to turn a blind eye to illegally converted units in favor of an affordable place to live in a hip neighborhood.
“There’s been a surge in attic apartments,” said Karla Mina, residential real estate broker with Coldwell Banker. “The millennials can’t afford to buy because they’re graduating and don’t have jobs, and they don’t qualify for a loan.” Mina said people coming out of foreclosures and short sales also are entering the renters market, making competition fierce for affordable spaces. “People are getting creative with the way they use their property,” Mina said. “Everyone is trying to rent.”
Englert and King pay $1,200 for their two-bedroom, one-bath apartment. Utilities are included.
“It was hard to tell from the pictures that it was an attic apartment, but the first thing I noticed was the number of stairs I had to walk up,” King said with a chuckle. “I wasn’t disappointed or upset. It was just like, ‘All right, we’re on the top floor. Time to build up our calf muscles.’ ”
Now that people are recovering from the recession, millennials are more likely to “choose the Starbucks and live in an attic” than “have a nice apartment and no Starbucks,” said Allen Sanderson, a University of Chicago economist. The other option would be moving back in with their parents, but location often becomes their top priority.
“There’s more of a tendency across generations than there used to be of the younger set deciding where they want to live first and finding a job second,” Sanderson said.
“People are willing to get by on very small spaces because they like to be in (places such as) New York or like the professional opportunities that the city has to offer them,” he said.
But attics are not just attractive to young people. A recent study by the Joint Center for Housing Studies of Harvard University found that while millennials and immigrants are forming new households and increasing the diversity of demand, rental rates among Gen Xers and baby boomers also are rising.
According to the U.S. Census Bureau Housing Vacancy Survey, in the past 10 years there has been the largest increase in renting over any 10-year period since 1965, with a total of 42.6 million renters in 2015, 8.5 million more than the 34.1 million in 2005.
Sanderson said the American dream of suburban life with a white picket fence has dwindled, with more people opting to move to the city.
“They’re more affluent, they just want to go to the theater, they want to go out to eat, want a more lively experience and they sort of find these outlying suburban areas as quiet and dull,” Sanderson said. “I’m surprised at the number (of people) that has given up its white picket fence stand-alone house to move into a high-rise (downtown). These are not poor people; that’s what they’ve chosen to do.”
When Chicago landlord Brian Robertson bought his property near Wrigley Field, the building came with an attic that was already converted. Since then, he’s been renting it out to mostly younger tenants.
“A lot of people want the attic apartment because they’re up high and there’s a view of the park and the thing is a lot cheaper too,” Robertson said. “Everyone I’ve shown it to loves it. I’ve got central heating and I have the washer and dryer for them. They have the creature comforts and a nice back deck.”
While Robertson’s apartment meets the necessary zoning and building requirements, Mina said renters should be aware of illegal units, many of them listed online by owners. Some smaller, local agencies may help landlords market those properties, Mina said, but Coldwell Banker does not because so many of them are not up to code.
Englert and King are among those who live in a unit that doesn’t meet all of the current zoning requirements. With only a single door in and out of the apartment and no sprinkler, there is a potential risk of being trapped in the apartment in the event of a fire.
But there are others who live in units that meet the building code, such as Eric, 29, who declined to give his last name. “The benefit is that it’s cheaper to live in an attic apartment in this neighborhood versus living downstairs,” he said. “It’s within budget in a neighborhood we might not be able to afford otherwise.”