Chicago Apartments Show Widest Rent Gap Between Top- and Low-Rated Locations
- Jul 11, 2018
Location is one of the most important factors in real estate and a core variable in the price formula. Prompted by the results of a recent renter survey, which revealed that 83 percent of renters wish they lived in a better location but can’t afford it, RENTCafé analyzed the actual rent difference for apartments located in top-rated locations versus apartments located in average and below average locations.
The analysis uses data from Yardi Matrix to compare the price of rent in apartment buildings with a location rating of A+ to B+ (top-rated) with the price of rent in apartment buildings with a location rating of B- or below (average and low-rated), as per Yardi Matrix’s location rating system. The main attributes of a top-rated location are close proximity to a high concentration of good employment sources, high-quality development in the area (residential and commercial), and easy access.
The study found that the U.S. average rent in top-rated locations is $1,655, while the U.S. average rent in low-rated locations is $1,211, a price difference of 37 percent or $444 per month.
Among the nation’s largest cities, the widest rent gap based on location is in the Windy City. Chicago apartments in top-rated locations (in and near downtown) cost as much as 79.3 percent more than apartments in the rest of the city, a net difference of $965 per month. Apartments in top-rated locations in St. Louis are 63.5 percent more expensive than apartments in less-desirable locations. In Philadelphia, the leap to a top-location would cost $760 per month or 58.8 percent. Apartments in Houston; Brooklyn, N.Y.; Memphis, Tenn.; Baltimore; Dallas; Los Angeles and Indianapolis, round up the top 10 cities in the U.S. where location upgrades bring about the highest costs.