Frankie Pelusi was no stranger to Bloomington-Normal when they returned to the area in search of an apartment earlier this year.

Pelusi calls the Twin Cities area home, although they have spent the past five years in Chicago.

Although he knows the area, Pelusi was unprepared for the shock of navigating the downstate market.

“When I lived here before, in 2016, I lived in a three-bedroom house on North Main Street with in-building laundry, no pet fees, and paid $500 a month,” Pelusi recalled. “So when I came back, I was like, ‘Oh, it’s not going to be a problem finding an apartment.'”

It turned out that finding an apartment was a problem.

The first was the question of availability – there was little choice. Then, when Pelusi found an apartment in his desired price range, it was a place that “smelled of cat pee” and harbored cockroaches.

Pelusi ended up moving in with a family friend, choosing to pay more for better living conditions while looking for somewhere affordable.

“I can’t find anything anywhere. It’s the same thing, four or five properties on Facebook Marketplace week after week,” Pelusi said. “It was brutal.”

Pelusi’s problems are a microcosm of what renters and homebuyers have been experiencing in the Twin Cities for some time now: demand is up, supply is low, and the market has reacted accordingly.

A study released earlier this year by the Bloomington-Normal Economic Development Council quantified the problem that until then had remained largely anecdotal: the area is 4,300 units short.

According to the study, the shortage was caused by an influx of workers at the Rivian factory and later at the Ferraro candy factory in a market that initially didn’t have much choice.

At best, it has caused headaches for tenants like people who have been here for years, and it creates a situation where people cannot find affordable housing. At worst, it has left others on the dividing line between being housed or homeless. And it’s not just because of a shortage of units; it’s because rent has gone up in the area for almost everyone.

“I spoke to several friends and they all said, ‘No, with my salary, I can’t afford to rent an apartment right now’ or ‘I can’t even find a place to rent'” says Pelusi. “People who have been here for years, really doing Bloomington, Bloomington, are not able to find affordable housing.”

Mustaali Carbaidwala, a management broker at Class Act Realty, agreed that rents are going up – but they are going up because the prices of everything else are also going up.

“Inflation is a term that I don’t really understand. What I do know is that our staff are paid, in some cases, 50% more than two years ago,” he said. declared. “Our contractors that we work with for lawn care and snow removal, our trades people, their rates have gone up another 33% to 50%. Yes, rents are going up, but that’s to offset costs for one and peak demand is another. big piece.”

From Carbaidwala’s perspective, an increase in rental rates is overdue for the Bloomington-Normal market.

“I think rents have been relatively stable for over 10 years,” he said. “Supply and demand have been about even for the last decade or more. I think rents are starting to catch up a bit to where, maybe, they should have been.”

The rent increases apply both to tenants who are looking for unoccupied or soon to be vacant accommodation, as well as to tenants who do not intend to move.

“It’s painful for someone who a year ago was renting an apartment for, say, $650, and today we could tell them that it looks like the market rent is $775,” said Andy Netzer, president of Young America. “It’s hard to swallow over $100 in rent increase, so we usually try to stick to a renewal somewhere in the middle.”

Like Class Act Realty, Netzer said costs for Young America, also a multi-owner company, have also increased across the board, with staff receiving increases and costs such as maintenance and insurance also rising.

Renters, at least those who can afford it, also pay these rates. A few years before the pandemic, Netzer said Young America was at 91% occupancy, trying to entice tenants into signing leases. With more demand, less effort is needed and people seem to be paying those rents.

“If the supply and demand market doesn’t justify it, rents can’t go up,” Netzer said. “So you might have insurance that’s going up a lot because there’s been a lot of insurance losses in housing over the last couple of years… and you’re like, ‘Well, I’m just going to pass that on to our residents. “, and are superior to your peers, no one will rent these apartments.”

It’s all about profit, but Netzer and Carbaidwala both emphasized the personal component of their respective companies: Netzer said most Young America landowners are “almost entirely” based in the center of Illinois and Carbaidwala said Class Act landowners are also “predominantly local.”

“The landlords we are managing this for – it is their livelihood,” Carbaidwala said. “They spent money and millions of dollars and worked hard to buy or acquire these properties. So now if the expenses go up, they have to raise the rents to compensate for that.”

From a tenant’s perspective, the increased costs associated with a lack of transparency can be frustrating.

“My ideal in Bloomington-Normal would be if we could hold landlords accountable and say, ‘You’re renting this place for $800, what makes it worth $800?'” Pelusi said.

follow the line

These are, of course, the problems faced by those who can afford an apartment or who already have one.

Kat Johns works with PATH Crisis 211 in McLean County, specifically with its COVID-era rapid rehousing program. The program can only help people who are actively homeless — of which there were 133 people at the time of this interview. But Johns said, anecdotally, she’s noticed an increase in need beyond the homeless.

“It’s a pretty typical waiting list,” Johns said. “We’re definitely seeing more people jumping on the couch. A lot of people who wouldn’t normally toe that line are doing it right now.”

Johns said the requirements to rent an apartment have also increased, ranging from landlords or property managers setting credit score metrics to demanding proof of three times the amount of rent from potential tenants.

“I definitely see it harder for people who get approval for places and landlords who need more upfront,” she said. “Honestly, a lot of landlords are scared. Not as much as they were right when the eviction moratorium ended, but….you see a lot of reluctance to take on these people who don’t have good eviction recommendations. owners, or who do have an eviction on their record.”

In fact, one of the leaders of PATH finds himself in exactly this predicament, should he decide to move.

Six years ago, Liam Wheeler was homeless and struggling with addiction. At Bloomington-Normal, he was able to “rebuild my life from the ground up” and “work very hard to correct the mistakes in my life”.

Now director of PATH’s homeless services program, Wheeler said he was lucky to have a good landlord right now because there wouldn’t be room for him, given his record of lodging.

“I’m really grateful for our relationship, but considering moving forward to a nicer place that aligns with my long-term goals — that’s not a possibility,” he said. “I don’t make enough money to be able to navigate this housing market. There is no growth potential in this community.”

An added complication to the lack of rental units is people who don’t want to rent, but can’t afford to buy a home in today’s market.

Amanda Marks and her husband are currently tenants at Normal, having decided to wait out the pandemic before committing to a house.

“Every time I look online and find something…the really cheap ones disappear right away,” Marks said. “They just left really fast. We’re in kind of a sticking point, because are we staying, and can’t we have a lot to save because the rent keeps going up? Or are we taking a chance with a house and a mortgage rate with such high interest rates?”

There are no easy answers for people like Marks, Pelusi, Wheeler and others – and there are no easy solutions either.

“It can’t be like the solution or the work of the landlord, or just community partners or the government,” Wheeler said. “It’s literally going to take all of us working together to find the solutions, because the disparity is too big for any one group of people to fix.”