ELGIN -- Although Fox Valley foreclosure rates pushed thousands of families out of their homes and into the rental market this year, area apartment managers and Realtors report the market is soft.
That evaluation bears out a recent report from real estate research group Reis Inc.
(Andrew A. Nelles/For The Courier-News)
(Andrew A. Nelles/For The Courier-News)
(Andrew A. Nelles/For The Courier-News)
• The newly divorced
• Families living together to try to cut expenses
• Those who have lost their homes to foreclosure
Last quarter, the U.S. apartment vacancy rate hit 7.8 percent, the highest since 1986.
"I think there are several things going on," said Lisa Hofherr, a Fox Valley Realtor with Prudential Starck.
Among them is an even softer job market.
"A renter called me this morning saying he signed a lease last week and was getting ready to move in, but now has lost his job and he is looking for a way out," Hofherr said.
In addition, couples coming out of foreclosure aren't filling up the vacancies left by the unemployed because they are not considered "safe bets" by cash-strapped landlords.
"I would say we've probably seen an increase in the number of people looking," Hofherr said. "But the number of people qualified to rent -- there we're seeing a below-average number of people."
With Elgin's unemployment in the double digits and apartment vacancies across the country at a 23-year high, landlords are faced with a stark reality: The luxury of being choosy is at an end.
Elgin property manager Alicia Delgado reports a 35 to 40 percent vacancy rate at her three apartment buildings on West Highland Avenue. One building is closed for repairs, but the rate is still much higher than normal, she said.
Although Delgado turned away many applicants earlier in the year due to poor credit or a record of foreclosure, "we kind of had to give that up and say, 'Hey, we can accept them,' " she said.
And Delgado has begun to consider accepting families with federally subsidized Section 8 vouchers.
"I'm looking at maybe accepting the voucher at this point because it's a guaranteed income," she said.
Delgado is not the only Elgin property manager considering the Section 8 option.
Eunice Lawshea, the executive director of the Housing Authority of Elgin, said, "Recently, there has been an increase in landlords that are willing to accept Section 8 participants for rental."
Lawshea believes Section 8 participants are more attractive to landlords across Elgin because they are "safe." Rent payments from tenants using the government's housing choice voucher program are backed by government subsidy.
Other Elgin apartment managers are looking to attract business by increasing amenities, structural upgrades and gimmicks such as a month's worth of free heat.
Gary Johnstone, the regional manager at Hunter's Ridge Apartments on Byron Lane, said many of his 408 units will be upgraded this winter. Refurbished apartments will rent at a higher rate upon completion, but Johnstone is offering up to one month free rent on those apartments.
Johnstone also has a program in place to work with families with good credit other than a foreclosure.