Up For Growth, a national “moar housing” research group, publishes an annual report about underproduction of housing in 193 regions, including Chicagoland. In their 2023 report they found that there’s an underproduction of 120,383 homes in the Chicago-Naperville-Elgin, IL-IN-WI metropolitan statistical area.
This graphic shows how U4G derived that figure of missing homes.
Housing underproduction as a narrative formula:
((existing households + missing households) * 1.05 [1]) - (total housing units + second/vacation homes + uninhabitable units) = underproduction[1] means a 5% target vacancy rate
The novel metric here is “missing households”, which are households that haven’t formed due to a lack of housing. The report’s definition:
Missing Households. Households that may not have formed due to lack of availability and affordability, e.g. households with children over 18 years of age still living with their parents or individuals or couples living together as roommates at levels exceeding historical norms.
In the Chicago region, 120,383 homes represents 3.1 percent of the housing stock in 2021, meaning we need to grow the number of homes in Chicagoland by 3.1 percent to accommodate these emerging families, graduating students, roommates, and doubled-up tenants. The necessary expansion of housing is greater than 3.1 percent, however, to accommodate migration and homes no longer in the market due to various forms of vacancy.
We also need more housing to help prices flatten or go down, and reduce the number of households that are cost-burdened. Among the top 10 cities with the most housing underproduction, Chicago has the lowest share of households which are cost-burdened, at 46.0 percent.