Illinois Governor Unveils Sweeping Statewide Zoning Reform to Address 142,000-Unit Housing Shortage

Illinois Governor JB Pritzker announced the most aggressive state-level housing reform in the Midwest during his State of the State address on February 18, unveiling the "Building Up Illinois Developments" (BUILD) plan — a sweeping package of zoning preemptions, funding, and regulatory changes aimed at closing a 142,000-unit housing shortage.

"The problem is clear. Rent is too high, and homeownership is too far out of reach," Pritzker said. "We are not building enough homes fast enough. Everything is just too damned expensive."

What the BUILD Plan Does

The centerpiece is a tiered density framework that would override local zoning across the state, allowing multifamily housing by right on residential lots without zoning approval:

• Lots under 2,500 SF: Single-unit only
• 2,500–5,000 SF: Up to 4 units
• 5,000–7,500 SF: Up to 6 units
• Over 7,500 SF: Up to 8 units

The plan would also legalize accessory dwelling units statewide on all residential-zoned properties, eliminate parking minimums for "middle housing" developments, establish mandatory permit review timelines, standardize impact fee formulas, and create a new state Director of Housing Solutions position.

$250 Million in Capital Investment

The BUILD plan includes $250 million in new spending:

• $100 million for infrastructure grants covering sewer, stormwater, and site preparation
• $100 million for middle housing development through the Illinois Housing Development Authority
• $50 million for down payment assistance and low-income housing programs

The Numbers Behind the Crisis

A University of Illinois study found the state needs to build 227,000 units over five years — roughly 45,000 annually — but current construction averages just 19,000 units per year. Home prices have risen 37% over five years while active listings have dropped 64%. Illinois ranked 48th out of 50 states for new housing construction per capita in 2024.

Industry and Political Reaction

Illinois Realtors CEO Jeff Baker called it "a major step forward," adding that "NIMBYism is ingrained at that local level to the point that if we're really going to make a difference here, it's going to require statewide change."

The plan is expected to face pushback from municipalities that oppose state preemption of local zoning authority — the same dynamic that has slowed similar reforms in other states.

Illinois joins a growing list of states preempting local zoning to address housing shortages, following Oregon (2019), California (2021), and Montana (2023). However, Illinois's density allowances — up to 8 units per lot — may be the most aggressive in the nation, exceeding even California's SB 9 cap of 4 units.

The plan requires legislative approval for both the zoning changes and capital spending.