India Walker, 33, has always wanted the luxury high-rise, city views and Yorkshire Terrier lifestyle.
“This is going to sound corny, but ever since I was a little, I’ve always wanted a bougie penthouse apartment—walking around with my little dog, you know? It’s just one of the status symbols that screamed I’ve arrived.“
Walker realized that dream during the pandemic when she was able to move into a modern, plush apartment in Chicago’s swanky West Loop neighborhood at a discounted rate, where rents for a 2-bedroom can command nearly $5,000 per month.
But as the city rolled back some of its pandemic-era relief programs, Walker’s rent not only rose, it skyrocketed.
“I had to go back home because I refused to pay more than double the rent I paid just a year ago,” she tells ESSENCE. “But even with the expense, I just really wanted that lifestyle—nothing else would do.”
Evidently, many others share Walker’s sentiment.
A cursory Google search or just taking a walk down the street will show you that dozens of luxury apartment developments are being built in the city, akin to many other metro areas across the country.
Apartment building hit a 50-year high in 2022, according to analysts at Yardi Matrix as reported by CNBC. They found that more than 400,000 units were erected in 2022, and there are strong expectations for more to go up through the rest of 2023. According to the CNBC’s analysis, the new builds are marketed as “luxury” to justify high costs for those who can afford them, a move that comes amid a housing crisis where many can barely afford their mid-range rent prices.
Chicago-based realtor and lifestyle curator Bryana Randolph says this isn’t everyone’s problem, though.
“Everybody’s wallet is not your wallet,” Randolph tells ESSENCE, referencing the looming recession that’s driving inflation for everything from food to rent. “There’s still a vast number of people who can afford to live in these rentals,” she continued. “I’ve been in fully furnished luxury penthouses at $43,000 a month here in this city, right? And there’s a market for it.”
“You see a lot of apartments and townhouses going up—not so many single family homes are being built anymore because it’s too risky. It’s just too risky.”
Williams explains that this is partially because materials are more costly for builders due to pandemic-era shortages, and rising mortgage rates that push out hopeful buyers.
“Luxury apartments are a happy medium because the materials can be a bit cheaper to source, and they still offer the same feel a single-family home would, and its less of a commitment for people who aren’t ready to buy,” Williams explains.
“When you purchase a home, if your lender qualifies you and you miss a payment within the first six months, your lender is going to be charged for that and they’re not really interested in taking those risks anymore. A few years ago, you could just go find new construction and the builders were doing all of the funding—inflation has changed all of that.”
She also points out that many people are downsizing to save money, which drives up the demand for luxury apartments as well.
“A lot of people don’t want a high mortgage,” Williams said. “They realized that they could live the same way in a luxury apartment with the same flooring, the same cabinets, friendly neighbors who all make decent money, so they feel like they’re surrounded by the same type of people that you would find in an upscale housing community right now. It just makes sense.”