High taxes have driven Illinois to the bottom of the state rankings for new housing permits.
According to U.S. Census Bureau data provided by iPropertyManagement, Illinois had 1.34 new privately-owned housing permits per 1,000 residents in 2023. Only Rhode Island and Alaska had fewer.
HBA Realty broker and owner Jeff Kropp has an explanation.
“Taxes are really high here in Illinois. I hear it from people all the time, trying to move out of Illinois down to areas that have low income taxes or no income taxes. Just the cost of doing business in Illinois, particularly in Chicagoland, far exceeds the states that are more friendly to developers,” Kropp said.
North Carolina led the United States with 9.12 new privately-owned housing permits per 1,000 residents in 2023. Florida was next at 8.57.
Census numbers show that privately-owned housing starts have fallen nationwide in 2024. The housing-start rate for July of 2024 was 16% lower than the rate for July of 2023.
Kropp said, along with taxes, government regulation is a big factor.
“Regulation is a big part of it. Chicago has created a bunch of new rules for set-asides for affordable housing,” he said.
Kropp said he sees a financial crisis for buyers, even though affordability to buy is at an all-time low.
“HOA fees have doubled. Insurance fees are getting close to doubling as well. And then the prices are skyrocketing, because there’s basically one home for every four buyers,” he said.
Kropp said rents are also skyrocketing.
“There’s a lack of housing across the board, all types, that’s really creating a large crisis. Wages are going up, but they’re nowhere near what they would need to be to tackle this inflation in housing costs. It’s crazy,” Kropp said.
