February 10, 2023 State Capitol Report

The pace is picking up in Springfield and today is the Senate bill introduction deadline. Nearly 4,000 bills have been introduced in the House and Senate combined. We expect at least 2,000 to 3,000 more bills to be introduced by next Friday, which is the House bill introduction deadline. As always, we are reading the bills and finding some bills that will benefit the real estate industry and other bills that will continue to negatively impact the severe housing shortage we are experiencing. As we move forward into the session, we will provide information on these bills.

Illinois REALTORS® Unveils Workforce Housing Legislation

At the suggestion of Illinois REALTORS®, the Workforce Housing and Housing Stability Act (SB2413) was introduced in the Senate this week by Senator Mattie Hunter (D, Chicago) and Senator Cristina Castro (D, Elgin). It will be introduced in the House next week. Illinois, like the rest of the country, faces a housing supply crisis in all price ranges. According to Freddie Mac, there is currently a housing shortage of at least 3.8 million units. Even after the recent increase in mortgage interest rates Illinois only has 1 – 3 months of housing supply on the market on any giving day. This supply crisis has resulted in higher prices for property buyers and increased housing instability across the state.

Growing housing demands began more than 10 years ago for many reasons and in the last two years we have witnessed accelerated effects of this problem due to historically low mortgage interest rates, healthy economic growth, and COVID-19. The result of this high-speed, textbook case of supply and demand has been an exacerbated crisis where statewide, there is an underproduction of at least 120,000 single-family homes and the Chicagoland area, a shortage of at least 48,000 new apartments.

Despite the severity of the current crisis, there are positive solutions we can implement to reverse the tide. Illinois REALTORS® realizes that it will take a steadfast, extended period to bring back balance. This bill, written by our own CEO Jeff Baker, continues to move Illinois in the right direction and will contribute to the state’s overall housing supply.

There are four components to our proposed solution. Here is a quick bird’s-eye view of the bill:

  • Re-configuration of the Illinois Home Buyers Savings Account Act. An earlier version of this Act was found to be unfavorable and difficult to navigate for everyone. Our version is quite simple and removes prior regulators from the equation.
  • Local governments may NOT prohibit the building or usage of Accessory Dwelling Units (ADUs) throughout the state. Also, it is vital to eliminate barriers to new home construction, specifically in restrictive zoning codes. This bill sets a boundary for municipalities to reconsider their zoning codes and maps following a federal proposal to increase grant scores for states that have reformed their zoning laws.
  • Following Governor Pritzker’s success of the Reimagining Electric Vehicles Act (REV), the bill creates a pilot program that incentivizes “missing middle” housing near REV projects. Following the anticipated success of the pilot program, it will be replicated throughout Illinois as soon as possible.
  • Transform the state’s existing impact fee law to bring fairness and uniformity to this critical development mechanism. This bill proposes to provide incentives to municipalities not in compliance to reform their local impact fee ordinances in order bring consistency to clear the way for home builders to engage in new projects.

An abundance of studies indicate housing stability is a key component to nearly every issue facing this state, ranging from raising more stable children, safer streets, less crime, stronger schools, and increased economic opportunities. The state has indicated a strong public policy interest in investing in housing. This bill reflects that strong commitment and encourages our state’s leaders to continue investing in housing, to reverse the housing supply crisis and to bring housing stability to everyone in Illinois. It is going to take everyone to pass this bill. Watch for continued updates on the progress of this bill.

Next Week: At-A-Glance

Legislative hearings are scheduled to take place. The deadline for the introduction of House bills is Friday, Feb. 17 so we will soon have a clearer picture of what we are facing over the next several months. The House version of our bill will be introduced. On Wednesday, Feb. 15, the Governor will present his combined State of the State and Budget Address to the Illinois General Assembly.

Thank you for reading the February 10, 2023 State Capitol Report. Click here to read previous reports.

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April 25, 2023