Have you heard? There’s a housing shortage.
It’s a national story, yes, but it’s a problem here in Illinois, too. Chicagoans looking to buy a single-family home or condo, or who just want to rent an apartment, are all up against a tough market, where sellers sitting on good units can command high prices even as buyers also face high interest rates that jack up their monthly all-in costs.
Too little supply is a big part of the problem — Illinois is short 142,000 homes, according to research from the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois Urbana-Champaign. Illinois Realtors have come up with an idea to boost building.
Their pitch?
Working at the local level instead of waiting on Springfield.
Going local is the right approach, as each community will have different needs and challenges that a one-size-fits-all approach can’t adequately address. That was one of the main critiques of Gov. JB Pritzker’s BUILD plan, which would’ve preempted local authority on key zoning decisions.
Though that primary feature gave us pause, we supported many of the ideas in the governor’s plan. So did the Illinois Realtors, who said at the time that the housing supply crisis has cost Illinois approximately $2 billion in brokerage activity and about $9.7 billion in gross economic impact in the past five years.
For one, BUILD would’ve helped speed up the permitting process, which is often painfully slow and is a costly impediment to development. BUILD also would’ve required locals to allow construction of accessory dwelling units (ADUs), often referred to as granny flats, in areas currently zoned for single-family homes. Where it went a bridge too far was by virtually barring single-family-only zoning for lots over a certain size. No bueno.
Under the Illinois Realtors program, there is much overlap in the diagnosis of the problem and in the specific reforms, but the crucial difference is who decides which reforms make sense. Their recommendations include many of the same policy levers — reducing minimum lot sizes, reconsidering minimum parking requirements and legalizing ADUs, for example. Another useful solution they promote is using qualified third parties to supplement municipal plan reviews and inspections, particularly when municipal capacity is strained.
Under BUILD, Springfield made the rules. Here, municipal leaders voluntarily adopt changes. It’s a similar menu of reforms that officials can dine on as they wish, rather than having Springfield order for them.
It’s hard to see a downside here. Realtors have a financial interest in boosting supply, but so what? Communities have an interest in making housing more attainable, too. When everyone’s interests are served to some degree, it makes sense to accept the help and work together.
After looking over the Realtors’ planning and assessment worksheets, we can see how these tools could help communities get a handle on the basics before prescribing solutions. How many residential permits were issued last year? What housing problems do residents identify? Is the town’s population growing or declining, and by how much?
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When a problem gets this big, such simple diagnostics can be invaluable for grounding solutions in reality. Getting back to the basics is an excellent place to begin.
These are the building blocks for deciding which reforms would help in a given locale. The answer won’t necessarily be the same in Pekin as it is in Highland Park, which is precisely why starting locally makes sense.
The conversation in Springfield about sensible housing reforms shouldn’t end, but given there’s no time to lose, complementary ideas can help bridge the gap between now and whenever Illinois gets its act together.
Leaders across Illinois are showing an appetite to tackle the housing crisis. They should leverage these commonsense tools to help them get started.
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