MOORE’S SUMMARY: The Illinois Municipal League has unveiled a counterproposal to Gov. JB Pritzker’s Building Up Illinois Developments (BUILD) housing plan that they say will spur more homebuilding and address affordability while preserving local control.

‘TRYING TO FIND SOLUTIONS’: “We could easily have just sat here and said ‘no’ on everything,” IML executive director Brad Cole told me on Friday. “But what we did is we said ‘no, we don’t agree with those things, but here are a couple of dozen more proposals and ideas and suggestions, and we’re happy to come up with more.’”

WHAT’S IN THE PROPOSAL? Legislation is expected to be filed this week, Cole said. Among the provisions likely to be included:

• The establishment of a “Middle Housing Incentive Fund” that local governments can tap into to support the development of multi-unit dwellings. Those that opt in would have priority access to state capital funding and housing grants.
• Allowing local governments to establish locally designated overlay districts where middle housing is allowed by right. Those who adopt these districts would receive additional priority funding from the incentive fund.
• The creation of a blight clearance program that allows the Illinois Housing Development Authority to offer grants or low-interest financing to local governments for the demolition of abandoned or unsafe structures.
• Capping residential real estate transaction commissions at 3% of a final sale price.
• Exempting building materials for residential developments from the state’s 5% sales tax. This would be like an existing incentive for developments in state-designated Enterprises Zones.
• Limiting up-front rental costs (security deposits, move-in fees, damage deposits, etc.), excluding the first month’s rent, to no more than one month’s rent.
• Barring homeowners’ and condo associations from restricting accessory dwelling unit or middle housing development. The limits on rental costs would also apply.
• Any Local Government Distributive Fund receipts above 8% received by local governments would be used to provide property tax rebates. This year, local governments received 6.47% of the state’s income tax receipts. In Pritzker’s proposed 2027 budget, they’d receive 6.28%.

“Nobody can say we’re not trying to find solutions,” Cole said. “They can say they don’t like our solutions, but they can’t say we’re not trying to find them”

WHY IT MATTERS: In February, Pritzker announced BUILD, a comprehensive plan to address the state’s housing shortage that would preempt local zoning laws to allow multi-unit housing by right on most residentially zoned lots. It would also legalize accessory dwelling units on all residentially zoned lots, expedite timelines for housing permit reviews and inspections and standardize “impact” fees.

Pritzker’s plan hasn’t moved in the House or Senate – though the Senate Executive Committee held a subject matter hearing last week and negotiations continue behind the scenes.

The IML has fiercely opposed BUILD, dismissing it as a one-size-fits-all approach to housing and zoning laws that takes control away from local governments.

Pritzker administration officials, however, told us in February that the existing “patchwork of local barriers” impedes the development of housing and has driven up costs statewide. And the only effective solution, they said, is statewide standards.

A Pritzker spokesperson reiterated on Friday that “a coordinated, statewide approach is necessary to solve the housing affordability crisis.”

“The current status quo has only deepened the housing shortage, so the time for action is now. BUILD doesn’t eliminate local control — it establishes minimum expectations and sets the floor in a coordinated way to meet every locality’s housing needs, all while ensuring the enhancement and preservation of each town’s character,” Pritzker spokesperson Jillian Kaehler told Capitol News Illinois.

The Illinois REALTORS – the top outside group pushing Pritzker’s plan – blasted the IML’s plan as a “wish-list of anti-real estate measures,” specifically targeting provisions capping real estate commissions, controls on rental charges and overriding Homeowners Association agreements.

“This proposal isn’t just misguided, it’s dangerous,” said Jeff Baker, CEO of Illinois REALTORS. “It raises serious legal questions, proposes outright price fixing, and undermines the very goal of making housing more accessible. At the worst possible moment, IML is throwing a wrench into efforts that are actually moving Illinois forward.”

CARROT VS. STICK: The easiest way to describe the IML’s proposal versus Pritzker’s is that it’s carrot versus stick. The IML wants lawmakers to incentivize but not mandate local governments to adopt policies encouraging homebuilding. Pritzker’s team believes the state’s housing crisis is acute to the point where something they view as a half-measure simply won’t cut it. And that a statewide solution is needed to change the historically exclusionary use of zoning by local governments in addition to capital investments.

But Cole said the patchwork is the point.

“So the patchwork is, I guess, not unlike the states in our national system,” Cole said. “Should we just eliminate the 50 states and just have one? I mean, we have 1,294 communities in Illinois and they’re all different. I mean, I can guarantee you that the things that are needed in Carbondale are not the same things that are needed in Chicago — and that’s okay.”

RECEPTION: While the governor’s office has not been receptive to the IML’s suggestions, legislators are listening, Cole said. Not that it should come as a surprise – many lawmakers are products of local government. House Speaker Emanuel “Chris” Welch, D-Hillside, speaking at the Illinois REALTORS’ annual conference last month, expressed support for the goal of Pritzker’s plan, but said the state needs “a BUILD plan that works with communities, not around them.”

“So the governor’s office has been boxing us out of this,” Cole said. “The members of the General Assembly, however, said, ‘Yeah, we want you at the table and thanks for sending these ideas. We don’t agree with all of them, but we like these.’”

STATE OF PLAY: Even as they laid out their BUILD plan, Pritzker’s team acknowledged that it would be subject to negotiations with the legislature. That’s taking place now. There seems to be broad agreement on the need for capital investments.

Notice that opposition to BUILD mostly focuses on issues of local zoning preemption and not the $250 million capital funding requests for site preparation grants, middle housing development, and first-time homebuyer assistance.

But statewide preemption of zoning ordinances is always a tough sell, even if ‘yes in my backyard’ is having a moment.

That said, the IML’s plan contains provisions that are likely nonstarters. For one, the property tax rebate portion only begins at 8% of LGDF – a percentage most underneath the dome would consider a pipe dream. And the provisions touching rental costs and real estate transactions will be vociferously opposed by the real estate industry.

Regardless, the IML has put its cards on the table.