Why Is Chicago So Expensive To Live In?

Chicago is one of America’s greatest cities, known for its world-class museums, vibrant dining scene, sports teams, and iconic architecture. But along with all its attractions comes a high price tag, making Chicago one of the most expensive places to live.

In short, Chicago is expensive mainly due to its large population density, scarcity of affordable housing, and high costs for property taxes, parking, and other services. Keep reading this comprehensive guide to learn all the factors that contribute to Chicago’s high cost of living.

Housing Supply and Demand

One of the key factors contributing to the high cost of living in Chicago is the imbalance between housing supply and demand. Chicago has a high population density, with over 2.7 million residents in the city alone. This high population puts pressure on the housing market, driving up prices.

High population density

With its rich history, diverse culture, and bustling job market, Chicago has always been an attractive destination for people looking to live in a vibrant city. The city’s popularity has led to a high demand for housing, which exceeds the available supply.

As a result, prices have skyrocketed, making it difficult for many residents to afford housing.

According to a report by the Institute for Housing Studies at DePaul University, the demand for affordable housing in Chicago far outweighs the supply. This has led to an increase in rental prices, forcing many residents to spend a significant portion of their income on housing.

Limited affordable housing units

Another factor contributing to the high cost of living in Chicago is the limited availability of affordable housing units. Affordable housing refers to housing options that are priced below the market rate and are accessible to low-income individuals and families.

Unfortunately, the supply of affordable housing in Chicago falls short of the demand. According to data from the Chicago Rehab Network, there are over 120,000 low-income households in the city, but only around 80,000 affordable housing units available.

This shortage leads to fierce competition for affordable housing and drives up prices.

Efforts are being made to address this issue. The city of Chicago has implemented various programs and initiatives to increase the supply of affordable housing. These include the Chicago Low-Income Housing Trust Fund and the Affordable Requirements Ordinance, which require developers to include affordable units in new construction projects.

However, the demand still outweighs the supply, and more needs to be done to ensure affordable housing options are accessible to all residents.

Taxes and Fees

When it comes to living expenses, taxes and fees play a significant role in making Chicago an expensive city to live in. Let’s take a closer look at some of the major contributors to the high cost of living in the Windy City.

Property taxes

One of the primary reasons why living in Chicago can be expensive is the high property taxes. According to a recent study conducted by Cook County Assessor, Chicago has one of the highest property tax rates in the country.

Property owners in the city face a heavy burden when it comes to paying their annual property tax bills. These taxes are used to fund various public services such as schools, parks, and infrastructure.

City utility taxes

In addition to property taxes, residents of Chicago also have to contend with high city utility taxes. These taxes are applied to utility bills for services such as electricity, gas, and water. The city utility taxes can significantly increase the cost of living for residents, making it more expensive to maintain basic utilities in their homes.

Parking costs

Another factor that contributes to the high cost of living in Chicago is the exorbitant parking costs. Finding affordable parking in the city can be quite challenging, and parking rates in downtown areas can be astronomical.

Whether you own a car or rely on public transportation, parking costs can quickly add up and impact your monthly budget.

Goods and Services

When it comes to the cost of living in Chicago, one of the factors that contribute to its overall expense is the cost of goods and services. From dining out to buying groceries and enjoying entertainment, these expenses can add up quickly. Let’s take a closer look at each of these categories:

Dining out

Chicago is renowned for its diverse and vibrant food scene. From world-class restaurants to trendy cafes and food trucks, the city offers a wide range of dining options for every taste and budget. However, eating out in Chicago can be quite expensive.

The cost of a meal at a mid-range restaurant can easily exceed $50 per person, and high-end dining experiences can cost several hundred dollars. Additionally, the city has a high sales tax rate, which can further increase the overall cost of dining out.


When it comes to buying groceries in Chicago, the prices can be higher compared to other cities. This can be attributed to a combination of factors, including the high cost of real estate, transportation, and labor.

As a result, grocery stores in Chicago often charge higher prices for everyday food items. However, it’s worth noting that there are affordable grocery options available, such as discount supermarkets and farmers markets, where residents can find more budget-friendly options.


Living in a vibrant city like Chicago means having access to a wide range of entertainment options. From theaters and museums to sports events and concerts, there’s always something happening in Chicago. However, enjoying these entertainment activities can come with a hefty price tag.

Tickets for popular shows or sporting events can be expensive, and the cost of drinks and snacks at venues can add up quickly. Additionally, parking fees and transportation costs can further contribute to the overall expense of enjoying entertainment in the city.

It’s important to note that while the cost of goods and services in Chicago may be higher compared to other cities, the city also offers a higher standard of living with its abundance of amenities and opportunities.

Residents can take advantage of the city’s thriving cultural scene, career prospects, and quality of life. It’s all about finding a balance between enjoying what the city has to offer and managing expenses wisely.

If you are looking for more information on the cost of living in Chicago, you can visit websites like Numbeo or Expatistan which provide detailed insights and comparisons of living expenses in different cities.

Transportation Expenses

When it comes to living expenses in Chicago, transportation costs can be a significant factor. The city’s vast size and bustling population make transportation a necessity for most residents. Here are some reasons why transportation expenses in Chicago can be quite high:

Public transit costs

Chicago has an extensive public transit system, operated by the Chicago Transit Authority (CTA). While the CTA offers convenient options like buses and trains, the fares can add up for daily commuters.

Currently, the base fare for a single ride on CTA buses and trains is $2.50, and it increases to $5 for express buses. Monthly passes are available, but they can still be a significant expense for individuals who rely heavily on public transportation.

Toll highways

Another factor that contributes to the high transportation expenses in Chicago is the presence of toll highways. The most notable tollway in the city is the Illinois Tollway, which connects Chicago to its surrounding suburbs and other parts of the state.

Toll fees can vary depending on the distance traveled, and frequent tollway users may find themselves spending a considerable amount of money on tolls each month.

Gasoline prices

Gasoline prices in Chicago tend to be higher than the national average. The city has additional taxes on gasoline, contributing to the increased costs at the pump. Additionally, factors such as high demand and transportation logistics can also impact the price of gasoline in the city.

It’s worth noting that the prices can vary across different neighborhoods in Chicago, so it’s essential to compare prices and find the most affordable options.

Childcare and Education

When it comes to the cost of living in Chicago, one factor that significantly contributes to its high expenses is childcare and education. Parents in the city often find themselves facing steep costs in this area, making it a challenge to afford quality care for their children.

Daycare availability

One of the reasons why childcare is expensive in Chicago is the limited availability of daycare centers. The demand for childcare facilities often exceeds the supply, leading to higher prices. Parents may find themselves on waiting lists for months, struggling to secure a spot for their child.

The scarcity of options can also result in higher costs as providers have the leverage to charge more due to the high demand.

According to a study conducted by the City Colleges of Chicago, the average cost of full-time daycare for an infant in Chicago is around $1,500 per month. This is significantly higher than the national average, making it a significant expense for families.

Private school tuition

In addition to daycare costs, education in Chicago can also be a financial burden for families. Private school tuition, in particular, can be quite expensive. Families who choose to send their children to private schools often have to pay substantial fees, adding to the overall cost of living in the city.

Private school tuition in Chicago can vary widely depending on the institution. According to a report by Chicago Magazine, tuition fees for private schools can range from $10,000 to $40,000 per year. This can be a significant financial commitment for families, especially when considering the additional costs of uniforms, textbooks, and extracurricular activities.

While public schools in Chicago offer an alternative, some families may choose private schools to provide their children with a more specialized education or access to specific programs. However, these additional expenses can make it even more challenging for families to afford the high cost of living in the city.


Chicago offers big city attractions and opportunities, but that high quality of living comes at a high price. Factors like scarce affordable housing, rising property taxes, expensive goods and services, and costly transportation add up to drain bank accounts quickly.

While Chicago is still attractive to many despite its price tag, understanding exactly why it’s so expensive can help people budget properly and make the most of living in one of America’s premier cities.

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