Oswego rent is ‘ridiculous,’ residents say. So why is the village approving more apartments?

OSWEGO- Nikki Kallmann and her three children have been renting in Oswego for five years. She has no plans to move and said she couldn’t even if she wanted to because of the rising cost of rent in the village.

Kallmann pays $1,600 a month for her three-bedroom home her family has lived in for five years.

Kallmann describes herself as a divorced mom of three who is working her way back up from the devastation of a divorce in which she lost her house.

Still, Kallmann said she has been lucky in securing the home she and her family are in. She found it because she is friends with a Realtor, and after explaining her situation to the landlord, he was sympathetic and has not raised the price.

“Rent is so high in our area, it’s ridiculous,” Kallmann said. “I can’t even afford the $1,600 a month, so I will not move.”

Kallmann is not the only Oswego resident facing these challenges.

Kallmann said there are many women who have shared stories similar to hers in a Facebook group, and who are struggling to find rental housing they can afford.

Kallmann said she initially was very intrigued at Avanterra, a development of rental single-family homes now under construction off Wolf’s Crossing Road in the village, but was turned off by the price.

“I think it’s insane,” Kallmann said, “I make $50,000 a year, and my daughter has to help pay the rent. And she can’t afford to go out on her own at $1,500 a month.”

Kallmann said she thinks homeowners who have stability in their income and their lives see rentals as a threat to their home values and associate renters with transients.

Kallmann said Oswego residents such as herself need more rentals, but they need the cost to reflect the economy.

“I would like companies who are renting to individuals to look to see why they are renting,” Kallmann said. “What’s the reason?”

The village of Oswego has seen a wave of proposals for a variety of rental developments in recent years, as apartments, townhomes and now even single-family homes are being built to rent.

In the past five years, the village has approved proposals and concept plans for six luxury apartment complexes totaling 1,658 units, two rental townhome communities totaling 317 units and one community of 149 single-family homes for rent.

While some residents have concerns about the increase in rental proposals, village officials say market trends ultimately decide what gets developed in Oswego.

‘There’s a lot of reasons to rent’

In a recent Shaw Local News Network online survey, 60% of respondents said they were concerned about the increase in proposals for rental housing in the village, although 80% of the respondents said they have lived in apartments or rental housing in the past.

Charles Pajor, chairman of the village’s Planning and Zoning Commission, said he has seen a lot of changes in the village’s housing market in the nearly 25 years he has served the village, first as a village trustee and more recently as a commissioner.

In some cases, property owners worry that renters are more transient and don’t share the same commitment to the community, but Pajor said he has found that not to be the case. Despite such concerns, Pajor said apartments in the village have not detracted from the community.

“If you look at the rental opportunities in Oswego, they’ve been very well maintained and have added to housing options,” Pajor said. “There’s a lot of reasons to rent, and they’re not always negative.”

Rental housing ratio

While some Oswego residents are against more rental properties being developed, village officials said the ratio of rental to owner-occupied dwellings is extremely low compared to other communities.

Village Administrator Dan Di Santo said, based on U.S. census data from 2020, Oswego’s ratio of rentals to owner-occupied property was about 11.6%. The average in the Chicago suburbs is 35.8% and the average in Illinois is 33.7%.

“We’re severely underserved with rental property, which keeps a segment of the population out of Oswego, not having those housing options,” Di Santo said.

Di Santo said the village currently has more than 1,500 rental dwelling units, with at least that many currently in the planning stages.

Di Santo said even if every rental development currently in the planning stages is built, the village’s rental housing ratio would only rise to 21.3%, still on the low end of communities in Illinois.

Di Santo said the lack of rental options excludes the village from serving a large demographic of people.

“We want Oswego to be available to everybody,” Di Santo said. “And that means different types of housing.”

Rod Zenner, the village’s development services director, has been with the village for 16 years and said he believes the village needs to diversify housing developments as much as possible to provide housing opportunities throughout the community.

Zenner said one of the PZC’s strategic goals is to look at the current mix of housing in the village and assess the ratio of rental to ownership properties. He said he believes the village has a relatively low rate of rentals, but as every community is unique, it’s hard to tell what the balance should be.

Village President Troy Parlier said he often explains to residents that just because the board approves concept plans for a development, doesn’t mean it will be built.

Parlier said developments have to go through three stages: First they work with the village’s planning and zoning commission, then they go before the Village Board for concept plan approval and then back to the board for final approval.

“Whatever residential development we approve,” Parlier said, “it certainly doesn’t mean it’s going to happen in the next sixth months, if ever.”

Comprehensive development plan

Pajor said the village’s comprehensive land use plan is reevaluated regularly, most recently about seven years ago, and relies on the planning and zoning commission’s guidance for how they would like to build out the village, but it is ultimately decided by market forces.

He said it ultimately comes down to funding and, right now, rental developments are receiving funding.

Parlier said it is not as simple as just saying no to more rental developments, as the village has a legal obligation to follow its comprehensive plan.

“If a community has attractive land that is part of a comprehensive plan and zoned to be residential, a community really can’t say no, and there’s reasons for that, so you don’t have discriminatory housing practices,” Parlier said.

Parlier said the Village Board in the past year has talked about taking another look at the comprehensive plan and updating it to account for the new types of products bring proposed.

“Even within the rental communities, it’s important we have these different products,” Parlier said. “We have these new developments of single family rental communities that are certainly not high density.”

Single-family rental homes

Pajor said single-family rental home communities, such as Avanterra, are a phenomenon he hadn’t seen until recent years, and is not being developed in neighboring communities.

“The pandemic has impacted what people are looking at in the housing market, and whether that’s a short-term trend or proves to be a more permanent change in what people are looking for remains to be seen,” Pajor said. “It’ll be interesting to see how it works.”

Pajor said based on the proposals the committee has been seeing, single-family rental homes are proving to be an attractive development model across the country.

For developers, Pajor said one advantage the single-family rental home has over apartment complexes is the ability to pivot with the market in the future and change the units to owner-occupied dwellings.

Demographics

Zenner said he hears from developers that many of the renters are empty nesters who don’t want to pay a mortgage anymore, families just starting out and people starting new careers.

“People are more mobile in their jobs nowadays,” Zenner said. “They don’t usually stay in one career or one place for a long period of time.”

Parlier said the concept is ideal for those who can’t or don’t want to maintain their property. He said at Avanterra, they won’t even have to take their garbage out, as they have a garbage concierge who comes to the door to collect waste.

“It’s people with strong careers that don’t want to do any maintenance,” Parlier said.

Pricing

According to an August report by Realtor.com, the national average rent for a one-bedroom apartment was $1,653, up 22.6% from August 2020. The average cost for a one-bedroom apartment in Oswego, as of September 2022, is $1,699, according to RentCafe.

Zenner said the increase in the cost of land and development raised the price of rentals in the village, even before inflation started to rise.

One-bedroom apartments can go for $1,400 to $2,000 a month in the Reserve at Hudson Crossing and between $1,700 and $2,100 at the Springs of Oswego.

Oswego officials don’t see those prices coming down anytime soon, as both places are reportedly near capacity.

In a recent Shaw Local News Network online survey, 56% of respondents said they thought $1,500 a month was a reasonable price for a one-bedroom apartment in Oswego.

“High-cost rentals are important to have in your community, just like single-family or townhome projects,” Zenner said. “You need to have a good mix.”

Parlier said he has concerns about how young people will be able to afford to start a life in Oswego.

“Nothing we have coming in is even close to affordable for someone just starting out in their career,” Parlier said. “They are so expensive.”

Chart shows all recent and upcoming rental developments in Oswego, ordered by proximity to completion. Source: Village of Oswego