Illinois Housing Reform Bill Would Allow Four-Flats and Multi-Unit Buildings Across State

Gov. JB Pritzker unveiled an ambitious housing plan that would significantly loosen zoning restrictions across Illinois, allowing for more multi-unit developments in residential areas. The proposal aims to address the state's severe housing shortage by making it easier to build four-flats and six-unit apartments in neighborhoods that currently only allow single-family homes or smaller developments.

Under current rules, roughly 41 percent of Chicago is zoned for single-family homes or two-flats only. Only 11 percent is zoned for three- and four-flats and apartment buildings. The governor's proposed fix includes a package of bills that would widely allow accessory dwelling units and four- to eight-unit developments in residential areas, depending on lot size.

Developer Nick Serra, who has managed roughly two dozen projects over five years, stands on an unfinished top floor of a building he is redeveloping in Chicago's Uptown neighborhood. The new top floor will be a four-bedroom apartment, which along with other changes he is making, will turn the entire building into a six-unit development capable of housing a dozen people.

Serra said finding lots zoned to allow the additional square footage and density he needs is difficult, particularly on the North Side where he primarily works. Under current rules, he has managed roughly two dozen such projects over five years.

The bills would still need to pass the state House and Senate and could be amended in negotiations. If Pritzker succeeds, it would mark not only a policy win for housing advocates but also a major political victory for the second-term governor as he tries to bolster his progressive credentials ahead of a potential 2028 Democratic presidential primary run.

Illinois faces a shortage of about 142,000 housing units and would need to build 227,000 units over five years to keep pace with demand. A joint study published last year by the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois Urbana-Champaign found this gap.

At the same time, rent increases in Chicago are outpacing national trends. While it is known for relative affordability compared with the largest coastal cities in the United States, Chicago had the sixth-fastest year-over-year rent growth in the country as of last month, even as rents fell nationally.

For homeownership statewide, median list prices climbed 26 percent from June 2019 to June 2024, to $340,000. State advisory committee data shows this increase in home prices.

The response from the governor's office has been something has to be done in the face of a housing shortage across the state, and the Pritzker administration is pushing forward anyway. Olivia Ortega, Pritzker's director of housing solutions, said for a long time, folks have not seen small-scale development happen in their neighborhoods.

What that has gotten is a really severe housing crisis where affordability is out of the question and home ownership is a really far-off dream, Ortega said.

The proposed fix Pritzker is pushing includes a package of bills that would widely allow accessory dwelling units and four- to eight-unit developments in residential areas, depending on lot size, along with a suite of other changes that could reshape housing from Chicago to Peoria and across downstate Illinois.

Additional local rules for building size and height could still apply, potentially restricting a building of the exact dimensions of the one in Uptown. But the prospect of allowing four-flats or six-unit apartments on quiet suburban streets, and granny flats in backyards across the state, has raised alarms among many local leaders.

The response from the governor's office is something has to be done in the face of a housing shortage across the state, and the Pritzker administration is pushing forward anyway.

Illinois faces a shortage of about 142,000 housing units and would need to build 227,000 units over five years to keep pace with demand.

The bills would still need to pass the state House and Senate and could be amended in negotiations.

If Pritzker succeeds, it would mark not only a policy win for housing advocates but also a major political victory for the second-term governor as he tries to bolster his progressive credentials ahead of a potential 2028 Democratic presidential primary run.

The proposed fix Pritzker is pushing includes a package of bills that would widely allow accessory dwelling units and four- to eight-unit developments in residential areas, depending on lot size, along with a suite of other changes that could reshape housing from Chicago to Peoria and across downstate Illinois.