A housing and zoning reform initiative proposed in a speech by Illinois Governor J. B. Pritzker is intended to increase housing construction and address affordability problems across the state.
Pritzker, a Democrat, announced a new initiative, “Building Up IL Developments” or BUILD, as he unveiled a new $56 billion state budget. The plan calls for modernizing building codes statewide to make it easier to build workforce housing.
“The problem is clear, rent is too high and homeownership is too far out of reach,” Pritzker said. “The cause is clear, too. We are not building enough homes fast enough.”
The plan has met with some opposition.
His plan argues that Illinois isn’t building enough homes, which has pushed rents and home prices higher. Pritzker’s proposal aims to remove regulatory barriers and encourage higher-density housing statewide.
Its main policy elements are:
- Statewide zoning reform that allows multi-unit housing on residential lots instead of restricting areas to single-family homes. It uses a sliding scale that could permit up to eight units on larger residential lots.
- Legalizes more housing types, such as duplexes, triplexes, four-flats, townhomes, and courtyard buildings in more areas. It allows accessory dwelling units (ADUs) such as basement apartments or “granny flats.”
- Reduces development barriers by setting statewide timelines for permit reviews and inspections to speed construction. It also reduces or removes parking mandates that often raise development costs.
- State funding of roughly $250 million in funding for Infrastructure needed for housing development; Support for “middle housing” projects; and first-time homebuyer assistance programs.
The BUILD initiative seeks to boost housing supply, lower costs, and make homeownership more accessible by encouraging denser development and reducing local zoning restrictions that limit construction, Pritzker said.
Illinois Republicans have criticized Pritzker’s speech and called for less spending.
Pritzker’s affordability proposals are in his budget for fiscal 2027 and come as the state faces a shortage of 142,000 homes, according to a report from the University of Illinois.
State Earned a ‘C’ in A in a New Analysis
To meet demand, a report from the Illinois Policy Institute said that Illinois needs an estimated 227,000 new units over the next five years.
The institute noted that the state got a “C” and an affordability ranking of 30th in the U.S. in an analysis from Realtor.com and scored worst among all its neighboring states.
In the budget address, the institute noted that Pritzker highlighted two other initiatives:
- Financial support for the Next Generation Capacity Building Initiative, which provides capital, training and technical resources for affordable housing through tax credits.
- Closing financing gaps, “from targeted funds for smaller projects to direct support to local communities so they can clear initial hurdles and make housing sites build-ready.”
The policy institute said if these are in addition to those outlined in the proposed budget, the total funding could surpass $250 million.
Pritzker said he believes Illinois’ housing problem is that costs are too high because not enough homes are being built.
The institute said that the funding and incentives Pritzker proposes are unlikely to improve housing affordability for low- and middle-income households because they do not address the root cause: low supply.
With the initiative, the institute said that the state would simply be trying to offset the costs of its regulatory and fiscal environment by compensating developers to build homes they otherwise would choose not to build.
Other policies meant to increase the supply of affordable housing generally have limited supply and increased prices. One of those is inclusionary zoning, which requires developers to set aside a portion of units at an affordable price. In Chicago, more than 20 years of that policy has yielded only 2,798 units.
The best way to make housing more affordable for all Illinoisans, especially low- and middle-income people, is to increase supply by making it easier to build. The state should address the root regulatory burdens that make it unnecessarily expensive for developers to build homes.
Such moves include adopting by-right zoning statewide, streamlining permitting, legalizing family-friendly housing types and eliminating aesthetic restrictions.
Mayor Opposes Pritzker’s Proposal
Peoria Mayor Rita Ali traveled to Springfield last week to openly criticize the plan.
Ali said Pritzker’s plan would be an unprecedented use of state power.
“Zoning and land-based decisions are best made locally and by the officials elected in these communities,” she said.
Ali spoke on behalf of the Illinois Municipal League, which represents municipalities across the state, and she was joined by other municipal leaders.
Ali said Illinois municipalities vary from geography to population, so housing decisions in her city are different than Eureka or even Chicago.
“A one-size-fits-all statewide mandate cannot adequately reflect these differences,” she said.
