Illinois housing least affordable in Midwest
It’s tougher to pay for shelter in Illinois than anywhere else in the Midwest, especially if you’re living in poverty. Illinois needs another 113,000 units and nearly 290,000 affordable rental homes to help its low-income families.
Illinois has 1 in 3 households paying more than 30% of their income for housing, and 1 in 6 households paying over half their income for shelter.
Why? Mainly because there’s an Illinois housing shortage: 113,000 fewer units than needed in 2021. There were nearly 290,000 too few rental units for extremely low-income renters.
The U.S. Department of Housing and Urban Development defines housing as affordable when it costs no more than 30% of household income, whether you own or rent. Above that amount, a household is considered “burdened” by housing costs.
Illinois sees 32.26% of households paying at least 30% of their income for housing. It has 15.54% households paying more than 50%, making them “severely burdened” by federal standards. Under either classification, Illinois ranks worst among the 12 Midwestern states.
Households making under $35,000 struggle even more. At 81.49%, Illinois has the highest percentage of low-income households paying over 30% of income for housing. Of those households, 56.67 % are paying over half of their income for a home.
Low-income households tend to rent rather than owning property, and rent costs are especially high in Illinois compared to the rest of the Midwest. The median rent for apartments in Illinois is $1,413 a month, $100 higher than second-place Minnesota. Rental for all property, including single-family homes, is significantly higher at $1,800 in Illinois, almost $300 more than second-place Minnesota as of May 2024.
A large part of what is driving these high costs is a housing shortage. In a recent research report, Up for Growth estimated Illinois’ housing underproduction in 2021 at 113,000 units.
Research from the National Low Income Housing Coalition reveals 451,737 renter households in Illinois are extremely low income. There is a shortage of 289,419 affordable rental homes for these extremely low-income renters.
If Illinois wants to provide housing relief for its most vulnerable, it needs to change how government regulates and restricts housing.
A recent report by the Illinois Policy Institute outlined steps Illinois communities can take to make housing more affordable. Top recommendations include permitting a wider variety of housing, lowering land use restrictions to allow for more alternative dwelling units on single-family lots, duplexes, triplexes, etc., lowering minimum parking requirements and streamlining environmental review processes. Many areas have already enacted such policies with exceptional results.
Chicago Mayor Brandon Johnson recently released his “Cut the Tape” report that embraces many of these policies. He could go farther by reducing restrictions on land use and housing, such as allowing granny flats and other alternative housing units to better use Chicago’s limited space.
Illinois should look to market-centered solutions to foster housing growth and make housing more affordable. That means government needs to loosen its grip.