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Consultants tell Waukegan officials Lot B can support market-rate apartments as demand far outstrips supply
Summary
A housing-market study delivered to the City Council finds Northern Lake County and Waukegan face tight rental vacancies and pent-up demand; consultants recommended a mid-rise, 100-unit market-rate building on Lot B and said the market could absorb significantly more new units over the next five years.
Tracy Cross & Associates told Waukegan City Council on July 21 that a market-rate, mid-rise apartment development on Lot B (east of the downtown library) is commercially viable and that Northern Lake County as a whole has a rental-supply shortfall.
Consultants summarized a regional market audit showing vacancy rates well below balanced levels: they reported a 0.7% vacancy for Northern Lake County and just 0.3% for Waukegan among newer, class A/B market-rate product, far below the 5%-6% vacancy typically considered balanced.
The study recommended a project script for Lot B: a five- to six-story building at roughly 100 units, with a unit mix aiming at renter profiles in the market and structured parking integrated into the scheme. The firm projected an initial absorption rate of 10 units per month and said a well-positioned building could reach full occupancy within 12 months; the consultants also said the market could absorb between 1,375 and 2,000 additional market-rate rental units in Northern Lake County over the next five years if supply were introduced.
Consultant Eric of Tracy Cross & Associates explained the assumptions behind the demand estimate, including positive household growth, a sizable renter base (some 43,000 renter households in the region), tight vacancy, and spillover demand from neighboring counties where new supply has been allowed to expand.
Aldermen asked practical questions about parking, market segmentation and the effect of short-term rentals (Airbnb). Consultants said onsite structured parking would be standard, tailored to expected unit mix (a modest parking ratio given an urban site), and that the study did not analyze the short-term-rental market specifically; they noted Airbnb-style conversions in existing stock could tighten housing availability but said the Lot B study focused on conventional market-rate rental demand.
Mayor Sam Cunningham and staff said the study will guide the city's request-for-qualifications (RFQ) for developers on Lot B; staff said they expect to select a development partner in spring 2026 following the RFQ process.
Why it matters: The study provides data-based validation that downtown rental demand exists and gives a recommended product and rent ranges for developers and city negotiators working on Lot B; it is intended to attract private investment onto the city-owned site.
