What do people normally count in cost of living? Utilities and services are fine, and groceries are easy to find reasonably priced. Transportation is fine.
So I think as others have mentioned, rent and house prices are the things climbing sharply. I know someone paying $900 for a room in a 3 person house, in a really great part of town (Division, for locals). I've heard studios go for well over $1000, and fill up fast. But really, you don't have to look very hard to find something cheap(er). Surrounding areas (with new access to light rail that goes down town) are reasonable.
I don't think it's really as bad as some people make it out to be, but it definitely is getting more expensive in town. I mean, that's the nature of the housing market recovery :)