Property taxes and restrictive zoning are driving the state’s housing crisis. New laws could help spur more construction.
The average Illinois home price has jumped almost 50% since the pandemic began, putting homeownership out of reach for many families.
The typical Illinois home now costs $285,736, according to Zillow’s Home Value Index — up 48.6% from March 2019.
That means a buyer will pay on average $93,415 more compared with just seven years ago. For families trying to save for a down payment, that’s a moving target that keeps getting further away.
The pain isn’t spread evenly across the state. Some cities have seen even more extreme price growth that has left longtime residents struggling to stay in their communities.
De Soto, in Southern Illinois, has seen the steepest climb, with home values more than 2.5 times higher than in 2019. Not far behind are communities such as Ford Heights and Sauk Village, both in south suburban Chicago. What was affordable seven years ago now requires significantly higher income or savings.
The main culprit behind rising prices isn’t a mystery: There simply aren’t enough homes for sale. Every one of the 26 Illinois metro areas Zillow tracks has seen its inventory of housing for sale shrink since March 2019.
In the Chicago area, available housing has been cut in half, plummeting 54%. Ten other Illinois metro areas have seen even steeper declines. When the same number of buyers compete for fewer homes, prices inevitably rise.
The inventory crunch is worse in Illinois than in most of the country. The state has just 32% of the active housing listings it had before the pandemic, less than half the national average of 79%, according to Realtor.com data.
The obvious solution in Illinois is to build more homes. Unfortunately, state metros are still building at disappointingly low rates.
New homes can’t be built when developers face constant roadblocks and restrictions. Strict zoning rules across the state block or add unnecessary costs to the kinds of housing that could help solve the shortage.
Fortunately, lawmakers are considering a slate of housing reforms that could make building housing in Illinois easier and less expensive.
The reforms in Gov. J.B. Pritzker’s BUILD Plan would make it easier for developers to build higher-density housing in transit-rich areas and build more housing on smaller lots, allow residents to add an accessory dwelling unit to their home, and more.
But even if Illinois had enough housing, families will struggle to keep their homes if the state does not address property taxes among the highest in the country.
Tackling both that and construction hurdles are necessary to make Illinois a place more people want to call home.
