Illinois HB1814: A New Initiative To Increase Housing Inventory

Big news in Illinois real estate, especially if you care about zoning, affordability, or development opportunities. House Bill 1814 is working its way through the legislature, and if it passes, it could completely change what cities can and can’t do with residential zoning.

Starting January 1 of next year, cities in Illinois with over 25,000 residents would have to allow middle housing, think duplexes, triplexes, townhomes. The idea is to increase housing supply and affordability by unlocking underused single-family lots for moderate-density housing. Cities can still set design rules, but they won’t be allowed to add restrictions that will slow things down or drive up costs unnecessarily.

Keep your eye on this legislation, especially if you’re a builder, investor, or just curious about how zoning reform could shape Illinois housing in the next few years.

Illinois HB1814 Impact on Chicago Real Estate Explained

Under Illinois HB 1814, property owners and managers in cities with more than 25,000 residents would see dramatic changes in local zoning, not fee structures. The bill requires municipalities to allow duplexes, triplexes, fourplexes, and townhouses to be built on any residential lot of at least 5,000 sq ft. Smaller cities (10,000–25,000 people) must allow duplexes.

Illinois HB1814: Main Takeaways

Overall, supporters are confident this new initiative will increase housing statewide by removing restrictions and red tape that prevented new construction in the past. More vertical density growth in areas like Chicagoland would create more homeownership opportunities for first-time buyers while not creating an exodus from the area or neighborhoods. This aims to be accomplished through:

• Mandates “middle housing” development:
  Starting January 1, 2026, all municipalities in Illinois with populations over 25,000 must allow the development of “middle housing” (duplexes, triplexes, fourplexes, townhouse-style units) on lots of at least 5,000 sq ft zoned residential. Cities between 10,000 and 25,000 people must allow duplexes on similar lots.
• Limits local zoning authority:
  While municipalities can impose design or siting regulations, they cannot enact rules that effectively discourage middle housing through excessive cost or delay. Oversight is aligned with statewide land-use planning goals.
• Restricts home-rule zoning powers:
  HB 1814 curtails local preemption powers to align municipal zoning with state housing policy

Illinois HB1814: Why It Matters

As mentioned, the main benefit of Illinois HB1814 being passed is an increase in new housing. Along with providing new affordable homeownership opportunities, it may also lead to a slowdown in the massive increase in the average home price since COVID, something renters consistently mention as a roadblock to ownership. Illinois HB1814 will bring relief to the Illinois and Chicago real estate market by:

• Boosting housing availability: Requiring duplexes and other middle housing types significantly increases developable units in single-family zones.
• Promoting affordability: Middle housing can offer more accessible cost options than large single-family homes.
• Preserving community character: Local design rules are still allowed, so the feel of neighborhoods isn’t necessarily lost.
• Guiding sustainable growth: It discourages sprawl and expensive land grabs by leveraging existing lots.
• Limits on home-rule extremes: Stops local governments from blocking needed reforms under the guise of municipal autonomy.

If you have any questions on Illinois HB1814 or its impact on the Chicago real estate market, please contact us with the form below.