Pritzker proposes reducing burdensome housing regulations
The state needs to add 227,000 homes by 2030 to meet demand
Gov. J.B. Pritzker made Illinois’ acute housing shortage a focus in his recent State of the State address, proposing to make building homes easier by reducing an array of harmful regulations.
Pritzker’s housing focus comes as Illinois faces a shortage of 142,000 homes, according to a recent report from the University of Illinois. To meet its growing demand, Illinois needs an estimated 227,000 new units over the next five years.
The state received a grade of “C” and an affordability ranking of 30th in an analysis from Realtor.com.
Pritzker’s assessment is one of simple supply and demand: “The problem is clear – rent is too high and home ownership is too far out of reach. The cause is clear, too. We are not building enough homes fast enough.”
This aligns with a proven principle: The key to achieving housing affordability is to increase housing supply.”
Pritzker acknowledged that bureaucratic red tape “unnecessarily increases costs, delays construction, and frequently kills projects altogether.” Illinois authorizes permits at a much lower rate than the national average. Since January 2015, Illinois has permitted an average of 848 private housing units per month. The national average over that time was 1,426 units.
The governor recommends streamlining the state’s permitting process by standardizing timelines, reducing delays at the local level by allowing qualified third-party reviewers to approve permits, and standardizing impact fees. Illinois’ permitting process is slow and represents a significant barrier to increasing housing supply.
In his remarks, Pritzker singled out parking requirements, which mandate a certain number of spots for each unit. Parking mandates increase costs for developers, because they usually have to add expensive underground parking for larger buildings.
In Chicago, underground parking spots can cost developers up to $36,000 apiece. The mandates can raise housing costs up to 17%. They’re also unnecessary in many cases, particularly when the housing is near public transportation and people select it for that reason.
Last summer Chicago eliminated parking requirements for construction 0.75 miles from CTA or Metra lines, which covers most of the city. In November, Illinois eliminated parking minimums near transit hubs. Pritzker wants to further reduce these requirements statewide.
In his proposed budget for fiscal 2027, the governor wants to boost “housing developments by modernizing outdated building codes and legalizing family-friendly housing types (duplexes, triplexes, four-flats, ADUs).” The document does not specify what reforms Pritzker will propose.
Illinois has the second-strictest zoning code in the Midwest and the 30th-most burdensome nationally.
The best way to boost supply on these types of housing is by “adopting by-right zoning and broadly legalizing multi-family housing, upzoning existing low-and-medium density residential areas and legalizing accessory dwelling units,” says a 2024 report from the Center for Poverty Solutions.
Accessory dwelling units, such as granny flats and coach houses, are particularly appealing for boosting supply because they’re smaller and built on existing properties.
Chicago would stand to gain the most housing units by making it easy to build ADUs. The city’s current policy inequitably harms minorities in the city’s poorest neighborhoods.
Although Chicago eased restrictions slightly in 2025, building ADUs remains nearly impossible in most parts of the city.
Senate Bill 3726 would prevent municipalities from prohibiting the building or usage of ADUs. The bill has been assigned to the executive committee.
Pritzker’s pro-building initiative follows a proven approach to housing affordability: address the root regulatory burdens that make it unnecessarily expensive for developers to build the homes Illinoisans need, such as adopting by-right zoning statewide and eliminating aesthetic restrictions.