The dream of homeownership is pushed out of reach by low housing supply and soaring property taxes driven by pension costs.
Decades of rising pension obligations have fueled relentless property tax hikes, piling financial pressure on families already squeezed by a severe housing shortage.
Compared to 1996, house prices are up 122%. Illinois families increasingly find themselves priced out of their hometowns, while young adults remain stuck renting.
But the housing shortage isn’t the only thing keeping homeownership out of reach. It’s the cost to keep homes, especially the property taxes that have increased at twice the rate of home values.
Illinois has the highest property taxes in the nation, and those taxes are being driven up by pension costs.
Since 1996, residential property taxes have grown by 232%. Most of the growth in property taxes can be attributed to the massive growth in pension obligations that local governments can no longer afford. As pension liabilities climb, local officials raise property tax levies to keep up, leaving homeowners paying more and getting less.
The result is a double bind for Illinois families: rising home prices because not enough homes are being built, and rising property taxes because pension costs keep climbing.
Even if someone manages to buy a home, the long-term affordability is undermined by ever-higher tax bills. That pushes some families to sell and deters others from buying in the first place, weakening communities and driving population loss.
Illinois could begin to reverse this trend by taking two steps: first, tackling the pension crisis that drives property tax growth, and second, increasing housing production to ease supply pressures. Constitutional pension reform would mean local governments no longer have to rely on constant tax hikes just to keep up with liabilities. More housing would give families more options, moderating price growth.
Until then, the dream of owning a home in Illinois will remain out of reach for too many, not just because homes are too expensive to buy, but because pensions make them expensive to keep.
