Chicago does not cap what you may charge and does not require cause to end a tenancy. It regulates process, and the penalties are automatic: a security deposit error awards the tenant two times the deposit plus interest, and outside eviction actions the prevailing plaintiff recovers attorney’s fees. Since 2020 a landlord must give 120 days of notice to raise the rent on a tenant of more than three years, whether or not the unit is covered by the ordinance. Cook County has lost 1.6 percent of its population since 2020 and permitted 0.22 percent of its housing stock.

Aerial view of the Chicago skyline at golden hour, downtown towers along Lake Michigan with the Chicago River threading between them and the lakefront stretching north.

Emerging market

Chicago multifamily investment guide

#7 of 49 nationally Midwest

Deep private capital and cash-flowing assets, against a difficult fiscal backdrop.

Chicago from the lake. Nothing about the risk in this market is visible from the air: it is procedural, it lives in lease files, and it is enforced with fee shifting. Generated plate, produced for Grey Oaks. Illustrative of the metro, not a photograph of a specific property.

Our read

Investor capital depth 5 / 5

Buy-side conditions 3 / 5

Qualitative judgments on a five-point scale, not licensed index values. Ranked #7 of 49 markets we cover.

0 Jobs in the metro BLS, July 2026

Fee shifting Attorney’s fees Chi. Mun. Code 5-12-180

120 days Notice to raise rent, tenancy over 3 years Fair Notice Ordinance, 2020

None Parcels in Cook County with no tenant ordinance Chicago RLTO; Cook County RTLO effective June 1, 2021

The case for

Going-in yields are among the best available in a major metro, and the investor base is deep and sophisticated.

The case against

Property tax trajectory and state fiscal position are genuine long-term risks to underwritten expenses.

Our stanceScreening selectively, with taxes stressed hard.

The figures that matter

Penalty for a security deposit error: 2x deposit Chi. Mun. Code 5-12-080, plus interest · City of Chicago, Department of Housing Awarded on noncompliance with the deposit rules. Five separate deadlines can trigger it.
Attorney’s fees: Fee shifting Chi. Mun. Code 5-12-180 · City of Chicago, Department of Housing Outside eviction actions the prevailing plaintiff recovers costs and reasonable fees.
Notice to raise rent, tenancy over 3 years: 120 days Fair Notice Ordinance, 2020 · City of Chicago, Department of Housing 30 days under six months, 60 days from six months to three years.
Parcels in Cook County with no tenant ordinance: None Chicago RLTO; Cook County RTLO effective June 1, 2021 · Cook County, Illinois The question is which ordinance applies, not whether one does.
Multifamily assessment penalty: None Cook County classification, Class 2 and Class 3 · Cook County Assessor’s Office Seven or more units is Class 3, but both classes are assessed at 10 percent.
Permits as a share of stock: 0.22% 2025, our arithmetic on two Census figures · U.S. Census Bureau 4,969 permits against 2,292,484 units.
Population change since 2020: -1.6% to 5,194,625 July 1, 2025 estimate · U.S. Census Bureau A loss of roughly 84,000 people from the April 2020 base.
Effective cap rate at entry: Pending Not held · U.S. Census Bureau Transaction cap rates require a licensed subscription we do not hold. We will not estimate one.

Where we would and would not transact

How to read this map

The layer that matters on this map is not rent or vintage, it is which municipality the parcel sits in. Inside the city limits the Chicago ordinance governs. In most of suburban Cook the county ordinance governs. In a handful of suburbs that kept their own, a third set of rules governs. Nowhere in this county is unregulated, and the compliance regime you inherit is decided by the municipal boundary the building happens to fall on.

Select a submarket on the map to see our read on it.

Submarket 1 of 6

Not for this strategy

The Loop and the near North Side

Carries the office exposure and the full city ordinance at the same time.

What drives our read

Financial activities fell 4.3 percent on 306,100 jobs.

What this stance means

We would not buy here on this strategy. That is a judgment about fit, not a prediction that the submarket performs badly. Somebody with a different mandate may well be right to buy it.

Other submarkets here

Submarket 2 of 6

Watching

Lakeview and Lincoln Park

Stable, long-tenured resident base, which is exactly what triggers 120 day notice.

What drives our read

88.4 percent of county residents were in the same house a year earlier.

What this stance means

We are underwriting but not committing. Something specific has to resolve first, and the read above says what it is. A watch can become a target without the submarket changing, if the price does.

Other submarkets here

Submarket 3 of 6

Watching

Logan Square and Avondale

Where most recent city delivery has landed, and where turnover is naturally faster.

What drives our read

Construction employment grew 3.3 percent while the county permitted 0.22 percent of stock.

What this stance means

We are underwriting but not committing. Something specific has to resolve first, and the read above says what it is. A watch can become a target without the submarket changing, if the price does.

Other submarkets here

Submarket 4 of 6

Where we would transact

Bronzeville and the near South Side

The deepest basis in the city, adjacent to institutional employment.

What drives our read

Education and health services is 811,600 jobs and grew 1.8 percent.

What this stance means

We would underwrite here on this strategy today. That is a statement about basis, vintage of stock and the local demand base fitting what we buy. It is not a view that any particular asset here clears.

Other submarkets here

Submarket 5 of 6

Where we would transact

Schaumburg and northwest suburban Cook

Outside the city ordinance, but inside the county one. Confirm the municipality.

What drives our read

The Cook County ordinance has governed suburban Cook since June 1, 2021.

What this stance means

Other submarkets here

Submarket 6 of 6

Where we would transact

Oak Lawn and southern suburban Cook

Workforce housing at the lowest basis in the county.

What drives our read

42.3 percent of Cook County households rent, and this is a deep part of that pool.

What this stance means

Other submarkets here

Chicago regulates the paperwork, not the rent

Sources 3 City of Chicago, Department of Housing 4 Cook County, Illinois

By this point in the series the regulatory question has taken three shapes. Most of our markets preempt rent control outright. Texas permits it conditionally, after a disaster and with the governor’s approval. St. Paul caps increases outright, and Colorado leaves rent alone and restricts possession instead. Chicago is a fourth shape, and in our judgment it is the one that most reliably costs money, because the exposure does not depend on a market event or a business plan. It depends on whether a clerk filled in a form correctly.

Illinois does not cap rent, and Chicago does not require cause to end a tenancy. What the Residential Landlord and Tenant Ordinance regulates is process, and it does so with automatic damages and fee shifting. The City publishes a summary that must be attached to every rental agreement under Section 5-12-170, which is itself a signal about how the ordinance is meant to operate.

The scope question comes first, because it is the one most often assumed wrong. The ordinance does not reach "units in owner occupied buildings with six or fewer units," along with hotels, dormitories, shelters, employee housing and owner-occupied condominiums and cooperatives. Read that the way an investor should: a seven unit building is covered, and a building of any size that is not owner-occupied is covered. Conventional multifamily is inside it without exception.

And there is no way to zone around it inside this county. The city ordinance governs inside Chicago. The Cook County Residential Tenant Landlord Ordinance, in effect since June 1, 2021, governs suburban Cook, excluding those municipalities that maintain their own landlord and tenant regulations, a group that includes Evanston, Oak Park and Mount Prospect. Every parcel in a county of 5.19 million people sits under one of three regimes. The diligence question is not whether a tenant ordinance applies. It is which one, and the answer is decided by a municipal boundary rather than by anything about the asset.

Illinois does not cap rent and Chicago does not require cause to end a tenancy.
The ordinance exempts owner-occupied buildings of six units or fewer. Seven units and up are covered.
Suburban Cook is governed by the county ordinance, in effect since June 1, 2021.
Evanston, Oak Park and Mount Prospect keep their own rules.

Nowhere in Cook County is unregulated. The only question is which of three ordinances you inherit, and a municipal boundary decides it.

Two times the deposit, and their attorney’s fees

Sources 3 City of Chicago, Department of Housing

The security deposit provisions at Sections 5-12-080 and 5-12-081 are the single most expensive thing in this guide, and they are expensive in a way that has nothing to do with market conditions.

A landlord must give the tenant a receipt. The deposit must be held "in a federally insured interest-bearing account in a financial institution located in Illinois," and deposits and interest "shall not be commingled with the assets of the landlord." Within fourteen days of receiving the deposit the landlord must disclose in writing which financial institution holds it. Interest must be paid each year on deposits held more than six months, at a rate the City Comptroller sets annually. Before deducting for damages, the landlord must give the tenant an itemized statement within thirty days of the tenant vacating, with copies of the paid receipts for the repair or replacement attached. The balance must be returned within forty five days of the tenant vacating, or within seven days where the tenancy ended because of a fire.

That is five independent deadlines, a segregated account requirement, an annual interest calculation and a documentary standard, on every deposit, on every unit, for the life of the tenancy. And the consequence of getting any of it wrong is not a proportionate remedy. Where a landlord fails to comply, "the tenant shall be awarded damages in an amount equal to two times the security deposit plus interest."

Then Section 5-12-180 supplies the enforcement economics: "Except in eviction actions, the prevailing plaintiff in any action arising from the application of this Ordinance shall be entitled to recover all court costs and reasonable attorney’s fees."³

Put the two together on a realistic number. A $1,500 deposit mishandled produces $3,000 in statutory damages, which would not by itself justify litigation. The fee shifting is what makes it worth bringing, and in practice the fees are the substantial part of the exposure. Multiply the arithmetic across a two hundred unit property and a defective deposit procedure stops being an administrative problem and becomes a portfolio-level liability, all of it created before a single tenant is dissatisfied about anything.³

This is why a number of institutional operators in this city have simply stopped taking security deposits, using non-refundable move-in fees or surety products instead. We would treat the deposit policy of any Chicago asset we looked at as a first-order diligence item, on the same footing as the rent roll.

Segregated, federally insured, interest-bearing, in an Illinois institution, not commingled.
Written disclosure of the institution within fourteen days.
Itemized damages statement within thirty days of vacating, with paid receipts attached.
Deposit returned within forty five days, or seven days after a fire.
Noncompliance: two times the deposit plus interest, and the tenant’s attorney’s fees.

The damages are two times the deposit. The attorney’s fees are what make the case worth filing. Ask how deposits are held before you ask what the rents are.

One hundred and twenty days of notice to raise the rent

Sources 3 City of Chicago, Department of Housing 2 U.S. Census Bureau

The 2020 revisions to the ordinance, known as the Fair Notice Ordinance, changed the operating tempo of this market in a way that is easy to miss because it is not framed as rent regulation.²³

A landlord must give a tenant who is not in the eviction process 30 days of notice to terminate a month-to-month tenancy, decline to renew a lease "or raise your rent" where the tenant has lived in the apartment less than six months; 60 days where the tenancy has run more than six months but less than three years; and 120 days where the tenant has lived there more than three years.²

The City is explicit that this reach is broader than the ordinance generally: these provisions "apply to all residential units, regardless of whether they are covered by the RLTO." The owner-occupied six unit exemption does not save you here.³

A hundred and twenty days is four months. On a long-tenured resident, a rent increase has to be decided and served a third of a year before it can take effect, which means it is set against market conditions that are a third of a year stale by the time it lands. Where an operator misses the window, the increase simply cannot take effect on schedule, and the unit runs another cycle at the old rent.

The demographic figure that decides how much this matters is one that rarely appears in an offering memorandum. In Cook County, 88.4 percent of residents lived in the same house a year earlier. This is a stable, long-tenured population, which is generally a virtue in rental housing and here also means a large share of any rent roll sits in the 120 day bracket. As in Denver, though through an entirely different mechanism, the distribution of tenancy lengths turns out to be a first-order underwriting input.²

Four months of notice to raise the rent on a long-term resident. Ask for the distribution of tenancy lengths, and ask when notices were last served.

Five million people, shrinking, and barely building

Sources 2 U.S. Census Bureau 1 U.S. Bureau of Labor Statistics 5 Cook County Assessor’s Office

Cook County held 5,194,625 people as of July 2025, down 1.6 percent from its April 2020 base, a loss of roughly 84,000 residents. It is one of a small number of counties in our coverage to have lost population at all.²

It is also building very little. The county authorized 4,969 residential permits in 2025 against a housing stock of 2,292,484 units. On our arithmetic that is about 0.22 percent of stock, the smallest ratio anywhere in our coverage, below Ramsey County, Minnesota at 0.30 percent and Los Angeles at roughly 0.6 percent. For scale, Harris County, Texas permitted 30,909 units, more than six times Cook County’s figure on a housing stock only about 12 percent smaller.²

Those two facts pull in opposite directions and roughly cancel. A shrinking population is a demand problem. Effectively absent new supply is a demand protection. What is left is a market where existing stock is not going to face much new competition, and where the rent thesis rests on the cost of the alternative rather than on growth.

That alternative is expensive on a monthly basis and not on a purchase basis, which is an unusual combination. Median home value is $324,500 against median household income of $83,498, about 3.9 times, which is affordable by the standards of this series. But median monthly owner cost with a mortgage is $2,270 against a median gross rent of $1,435, a gap of $835 a month. Only Los Angeles, at $1,206, is wider among the markets we cover. Rent absorbs about 20.6 percent of median household income on our arithmetic, and 42.3 percent of county households rent.²

Employment is flat rather than falling. Total nonfarm employment was 4,802,800 in July 2026, up 0.2 percent, with unemployment at 4.9 percent, down from 5.3 percent in June. Education and health services grew 1.8 percent on 811,600 jobs and construction 3.3 percent. Financial activities fell 4.3 percent on 306,100 jobs, which is a material decline in a city that defines itself partly by that industry, and trade, transportation and utilities, the largest sector at 933,400, fell 1.1 percent.¹

One tax point is worth stating precisely because investors coming from other states expect the opposite. Cook County classifies property, and multifamily buildings of seven or more units fall in Class 3 rather than the Class 2 that covers buildings of six or fewer. But both classes are assessed at 10 percent of market value. Unlike Tennessee, where crossing into the commercial class raises the assessment ratio from 25 to 40 percent, crossing from Class 2 to Class 3 in Cook County does not change the assessment level. Illinois property tax is heavy, but the weight does not come from a multifamily-specific classification penalty.⁵

Population down 1.6 percent to 5,194,625.²
4,969 permits against 2,292,484 units, about 0.22 percent of stock.²
Owning costs $835 a month more than renting.
Class 3 multifamily and Class 2 residential are both assessed at 10 percent.⁵

What we ask before we buy in Chicago

Sources 3 City of Chicago, Department of Housing 2 U.S. Census Bureau

We would look here, and we would price the compliance history rather than the compliance rules. The rules are knowable and manageable going forward. What is not manageable is inheriting several years of defective deposit handling across a few hundred units, because that liability is already created, it is fee-shifted, and it does not appear on a rent roll or a trailing twelve. Our method is set out in how we evaluate a market, and the full ranked list is on the markets index.

Which ordinance governs this parcel: the city, the county, or a municipality with its own?³
How have security deposits been held, in which institution, and was the written disclosure made within fourteen days?
Has interest been paid annually at the Comptroller’s published rate, and can that be evidenced for every unit?
Were itemized damage statements issued within thirty days of each move-out, with paid receipts attached?
Is there any history of RLTO litigation or demand letters at this property, and what did it cost?
Would converting to a non-refundable move-in fee or surety model remove the exposure going forward?
What is the distribution of tenancy lengths, and what share of the rent roll requires 120 days of notice?²
What rent growth is assumed against a population that is shrinking, and how much of the return comes from operations rather than the exit?

Price the compliance history, not the compliance rules. The rules you can follow. The prior owner’s deposit files are a liability you buy.

Employment by sector

Chicago-Joliet-Naperville, IL Metropolitan Statistical Area. Figures are as published for July 2026, preliminary.

Sector	Jobs	12-month change
Trade, transportation and utilities	933,400	-1.1%
Professional and business services	817,900	+0.3%
Education and health services	811,600	+1.8%
Government	549,000	+1.1%
Leisure and hospitality	499,200	+0.7%
Manufacturing	410,400	+0.4%
Financial activities	306,100	-4.3%
Construction	200,800	+3.3%
Other services	196,000	-0.3%
Information	76,700	-1.2%
Mining and logging	1,700	0.0%

Source: U.S. Bureau of Labor Statistics, Economy at a Glance, Chicago-Joliet-Naperville, IL. Retrieved September 2, 2026.

The demand base

Population, tenure, incomes and housing costs for the county. These are the figures that decide whether a renter household exists, and whether it could buy instead.

Measure	Value	As of
Population, Cook County	5,194,625 -1.6% since April 2020	July 1, 2025 estimate
Households	2,100,230	ACS 2020-2024
Housing units	2,292,484	July 1, 2025
Owner-occupied rate The remaining 42.3 percent rent.	57.7%	ACS 2020-2024
Median gross rent	$1,435	ACS 2020-2024
Monthly owner cost with a mortgage $835 above the median rent.	$2,270	ACS 2020-2024
Median household income	$83,498	ACS 2020-2024, in 2024 dollars
Median home value About 3.9 times median household income.	$324,500	ACS 2020-2024
Building permits 2025	4,969	2025, Cook County, all residential
Persons per household	2.43	ACS 2020-2024
Living in the same house one year ago Long tenancies, which is what triggers the 120 day notice rule.	88.4%	ACS 2020-2024
Employer establishments	134,513	2023
Poverty rate	13.7%	ACS 2020-2024
Bachelor’s degree or higher	42.7%	ACS 2020-2024, age 25+
Mean travel time to work Against 29.0 minutes in Harris County and 24.9 in Denver County.	31.5 min	ACS 2020-2024

Source: U.S. Census Bureau, QuickFacts, Cook County, Illinois. Retrieved September 2, 2026.

Underwriting sandbox

Run the arithmetic yourself

No market data is pre-filled here, because we will not put estimated figures in your model. Enter the numbers from a real deal and this shows you what they imply.

What to stress in Chicago

Grow property taxes materially faster than rents for a decade. In Cook County that is the structural expectation.

Units Purchase price · $ In-place average rent · $/mo Other income · $/yr Vacancy and credit loss · % Operating expenses · $/yr Loan amount · $ Interest rate · % Exit cap rate · %

Net operating income

Going-in cap rate

Debt service coverage

Cash-on-cash, year one

Breakeven occupancy

Exit value at your cap

Cap spread, entry to exit

Standard formulas, nothing proprietary. Net operating income is gross potential rent plus other income, less vacancy and credit loss, less operating expenses. Debt service assumes a thirty-year amortizing schedule at the rate entered. These outputs are arithmetic on your inputs, not a projection, and they are not advice.

Diligence

What to ask before you wire

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1 of 26

Sponsor

Ask to speak with a limited partner from a deal that did not go to plan
Confirm the general partner's cash co-investment in this specific deal
Review the full fee schedule, including construction management and refinance fees
Confirm whether the preferred return is cumulative and whether it compounds
Read the capital call clause and what declining one does to your position

The asset

Current rent roll and trailing twelve month operating statement, not a summary
Economic occupancy, not physical occupancy, for the last eight quarters
Bad debt and concession history by month
Third-party property condition assessment with remaining useful life on roof and mechanicals
Unit-level renovation scope and actual achieved premiums on completed units

The market

Units under construction within a two-mile radius, with delivery dates
Submarket rent trend in dollars, not percentages, over eight quarters
Employment concentration: what share of demand depends on one employer
Comparable trades in the submarket over the last eighteen months

Expenses

Bound insurance quote at this asset, with current roof age and any mitigation report
Post-sale property tax modeled from the purchase price under this state's rules
Utility structure and whether any recovery program is in place
Payroll and management fee structure, including any affiliate arrangements

The capital stack

Debt maturity date and what happens at it
Whether the rate is fixed, floating, or capped, and who pays for the cap
Debt service coverage covenant and current headroom against it
Refinance assumptions in the model and what happens if none is available

Chicago specifics

Township and position in the triennial assessment cycle
Appeal history and current representation
Whether the asset falls under the Chicago RLTO or suburban state law
Ten-year property tax stress, not five

Follow-up

What investors ask us about Chicago

Search questions

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Ricardo Sanabria · Grey Oaks Multifamily

Answering

Ask me anything about Chicago. These are the questions that actually come up.

Why look at Chicago at all?

Going-in yields are among the best available in any major metro, the employment base is genuinely diversified, and the transaction market is deep. The tax and fiscal risks are real and priced, which is not always true elsewhere.