Illinois is short roughly 130,000 homes today and needs about 240,000 more by 2030. The state can’t change mortgage rates or material costs, so Governor JB Pritzker of Illinois is targeting something else: the rules that make homes hard to build. He walks through the Build Initiative, a set of bills to legalize more ADUs and small multifamily buildings, relax some parking and stairway requirements, standardize impact fees, and put limits on permit delays. He also talks about local pushback, bipartisan support, and why these modest changes could mean more housing choices without the sense that neighborhoods are being upended.
Hey, this is Chuck Marohn. Welcome back to the Strong Towns podcast. Before we get started today, I want to give you a little bit of background, because I'm speaking with the Governor of Illinois, JB Pritzker.
In this episode, his office contacted us and said the governor would like to come on the podcast. I've been on the road — we had our national gathering — and basically we were like, hey, we can do it, but it's going to be in June sometime. The response we got was, no, he'd like to come on right now. We've got this pending legislation, the session is going to be over by then, and they wanted to talk about the Build set of initiatives. We were able to make it work in a little time slot I had between different trips.
I want you to know that they really wanted to make this happen, and we wanted to make this happen too. I'm very happy to talk to any governor, but especially the Governor of Illinois. We had five different local conversations there in Illinois, and a couple of them wanted to talk to me at the National Gathering about this legislation. There's a lot of momentum there.
When you listen to it, there might be some of you that are frustrated because I don't argue points with the governor. If you've been here a while, you know I'm not an argumentative sort. I'm a Minnesotan — we're generally pretty easygoing. I told the governor, I'm going to ask you questions and I want you to make your point. I did ask a couple of hard questions and let him answer the way that he would.
I'm going to do a follow-up podcast and chat a little bit about the legislation in Illinois and some of the other legislation we see around the country, but this is an opportunity for you to hear from the governor, who wants Strong Towns people to hear what his proposal is and what his message is. I thought it was a really good opportunity.
Enjoy the podcast. It was a really good conversation. He was a cool guy, his staff is nice and easy to work with, and they're doing stuff that I think generally aligns with Strong Towns and the way we're trying to move the country. So many thanks to our local conversations there for engaging in this, and here's the episode.
Hey everybody, this is Chuck Marohn. Welcome back to the Strong Towns podcast. JB Pritzker is the 43rd governor of Illinois. He has a proposal that he calls the Build Initiative, a series of statewide reforms to push for more housing and ultimately lower housing costs for Illinois residents. He joins us today on the Strong Towns podcast. Governor, welcome to the show.
Thanks, Chuck. Great to be on.
You have talked about a housing problem in Illinois. I wanted to maybe start at the top by allowing you to describe it in your own words. What is the housing issue that you're trying to address right now?
Sure. Right now we've got a need for about 130,000 more homes. We have a shortage, and unfortunately that's led to higher prices — a very difficult circumstance for first-time homebuyers and also for seniors who are looking to downsize but find nothing on the market. We need 130,000 homes nearly immediately, and then about 240,000 or so between now and 2030. That's a lot to do, because you can't snap your fingers and have all those homes show up. We have to go at this in many different ways.
The causes of the shortage exist all over the country, but we're trying to address it at least in one way with this Build Initiative. It stands for Building Up Illinois Developments. It has a number of components, and I think it really helps us do something unusual — taking some of the barriers away so we can finally make it easier and less expensive. We're not talking about massive developers or huge developments. We're just talking about people who might want to put a duplex or a triplex on a piece of property, build something on their own property, or take an existing building and make it available. The Build Initiative is focused on small — two, three, four flats, maybe up to six — and doing it everywhere. We have a big state, 57,000 square miles, and a need for housing everywhere. I'm excited about the Build plan, and it's right before the legislature now.
Let me ask you this, because I know as governor you've got a lot on your plate — not just housing, but many things. The federal government is very active in housing finance, and local governments are active in housing regulation. What made you prioritize this now? Why is this an important thing? Why are we talking?
When we talk about this moment, you hear the word "affordability" a lot. I don't really like that word, because I think it doesn't really describe the high cost of things these days. There are lots of ways to address that. I always say the best way to address affordability is to put more money in your pocket — if we can raise wages, that's always a great way to overcome the challenges. But sometimes you can lower costs too. In this world of high gas prices and grocery prices that have gone up, there's not a lot we can do at a state level to control the cost of commodities. But there is something we can do to assist local governments across my state — towns and cities and counties — to do better in terms of re-examining their regulations.
Many of those regulations, some of which date all the way back to redlining, persist even today. I'm not suggesting anybody has a desire to redline anymore in Illinois, but some of those regulations just carry on. Also, at the local level, they tend to pile regulation on regulation. Someone will come up with a new idea, they'll pass it, and there's another regulation. But they aren't looking three deep in the regulatory manual to find out that there's something else already related to it — you don't really need both of those regulations.
We're trying at the state level to make some minor adjustments. We want to leave decisions about the character of the community and local control of height restrictions and everything else to the locals. What we're trying to do is just take away things like a prohibition against accessory dwelling units that shouldn't be there anymore. We all think our parents should be able to live on our property if we want a garage apartment, for example, so we can take care of them nearby. But in a lot of towns that's not allowed. If a developer wants to put up a duplex, permitting is so expensive it takes forever. Some towns are doing that purposely because they really don't want to deal with it.
So we're trying to level the playing field across the state, allowing for a little more availability of homes, which I think can add literally tens of thousands of places to live. We also have other things we're doing — offering down payment assistance and help to local governments so they can build underground infrastructure to activate a property and make it available for building.
Let me ask you about what I think is the low-hanging fruit, because you do have the ADU reform, the backyard cottages, all that. You also have the parking reforms in there, which is another statewide initiative we've seen be rather successful. How are you thinking of those in terms of the low-hanging fruit of this package? It seems like those are the ones that should have the broadest support — maybe the least controversial at a block level.
I think that's right. In a couple of our biggest cities — Chicago is by far our biggest, but we've got a lot of others, Champaign, Rockford, and so on — some cities have already taken on the reforms and done the things that are necessary. Transit-oriented development ought to yield opportunities to have fewer parking requirements, which makes it less expensive to develop in those areas. That's an example of how we're making a difference for developers, just lowering costs. If we can lower the cost for developers, first, they're going to want to develop. If you can't develop homes at a price people can afford in a certain city, then you're not going to develop any.
As you're saying, these are maybe the easier ones. The pushback on parking reform, to the extent there is any, is less significant than some of the other things that have a lot of misinformation associated with them. People understand that if there's transit nearby, you don't really need as many parking spaces. Where people get a little caught up is when we say we want to allow duplexes or triplexes — then people start to imagine the 50-condo building coming up next to all the single-family homes on a block, which is not at all what we're authorizing. That's where there's misinformation and people feeling like we're encroaching on the local character of a community, and that's not at all what we want to do. We just want a few houses everywhere in the state, and that'll help us get to our goal.
It's interesting because a lot of states have done parking reform and ADU reform, and I've seen that be very successful. You actually step beyond that a little bit and try to address the duplex, triplex, and quad unit. The actual details of the bill would allow up to eight units on certain size lots — not the condo building, not the massive apartment building. There's a context there.
I want to give you a chance to speak to the statewide part of this, because you listed a bunch of cities. I wrote down the ones I've been in recently: Peoria, Lockport, Rockford, Bloomington, Normal. These are all different than Chicago, which is also a great city I've been in. What would you say to someone in those cities in terms of, hey, we're not thinking of you the same way we're thinking of Chicago? What is that nuance, and why statewide reform rather than just reforming the big cities or just near transit?
We're not going to pick out one city and say we're only going to do reform there. I will say all of these reforms are at such a low level — they're not significant impositions. Take transit reform and apply it to Rockford. Rockford doesn't have a subway the way Chicago does — we call it the L. It's got buses, though, and it's got transit as a result. And there are towns where there's no applicability of transit-oriented or parking reform. The applicability in a smaller city like Lexington, Illinois is not that much. So that part is not any imposition on them.
Even in other places, we're just trying to acknowledge something that's already understood. A lot of times what happens in local communities is people forget about all the regulations they've piled one on top of another, the result of which is you can't get a permit in a reasonable amount of time — whether you're somebody who owns your own home and just wants to have an ADU, or someone who wants to develop a six-unit or four-unit building.
Again, what are we doing? We're not saying everybody gets permitted. We're saying if the city or town can't complete the permitting process within a reasonable period of time, we're going to let a third party review all of the rules around the permitting and award them, because they can do it faster. It's an incentive for the community to do it better and faster.
It's a decent amount of time to actually get on this. If they don't or can't do it, you allow a third party to, in a sense, review the permit on behalf of the city. How would that work, and what do you hope local governments do in response to that particular mandate?
I'm hoping that local governments will beef up their ability to deliver a result on permit applications faster. That's really all we want. I used to run the Human Rights Commission in the state, where we heard cases of potential discrimination. The Department of Human Rights, which can mediate these things — if they aren't able to mediate them in a reasonable amount of time, and we're not able to make a decision at the commission in a reasonable amount of time, then we allow people to remove it and go to court, because government isn't working the way it's supposed to work. That's all we're saying here: let's come on, everybody, let's do it the right way. It's not really a sanction, because the third-party reviewer still has to follow all the rules. It's just that maybe the town doesn't have enough people to look at all the applications, or in some cases there are cities and towns that don't really want to get to those applications — they don't really want new homes built in the community, for whatever reason, and I think that's terrible and unfair.
We need workers' housing. This is really about middle housing and housing for workers. When we say affordable homes or affordable housing, people immediately think of low-income housing, like Section 8 or something. That really isn't what we're talking about here. We're talking about middle housing, starter homes, things like that. There's a fear factor, but once again, this is about workers and middle-class families being able to either build or find a home, or first-time homebuyers finding a home in a community where they also work. I'll give you an example, if I may.
Please.
We have a city here, and I think you mentioned you'd been to Bloomington-Normal. When I took office in 2019, there was a very small 27-person company that came and bought an old empty Mitsubishi auto plant. The name of that company was Rivian. Rivian bought that Mitsubishi plant and went from 27 employees to 8,000 employees in Normal, Illinois, which is right next to Bloomington. Bloomington doesn't have nearly enough housing for all the new jobs that got created. The people who work there are living in Decatur or 45 minutes to an hour and 25 minutes away. It's not like it's an overrun massive metropolitan area. There is an opportunity to develop new homes, but they haven't been able to do it fast enough and at a low enough cost. That's a place where there's real demand, and it's driving up all the prices of homes.
We also want to make sure that Rivian and all the other businesses benefiting from Rivian's presence — because lots of restaurants and retailers are thriving — have the ability to have workers who live somewhere nearby. That's an example of how we're trying to fix problems around the state with this. But we're not forcing local communities to decide they want to have fourplexes. We're just giving an opportunity for a community to make it easier for developers, or when I say developers, I mean someone locally who wants to buy or build a duplex because they may have another job but they'd like to be a landlord, for example, or a developer of a small building. We just want to make it a little easier for people to do that, and again, we've got a growing state, so I'm hoping this is going to make a positive change everywhere.
Let me ask you a little bit more about the Rivian example, because I feel like there's an aspect of this bill that is very unique, and that is the reform of the statewide impact fees. If you take a city like Normal that is growing very quickly, they have the ability in Illinois to charge impact fees. This bill, in a sense, standardizes that fee schedule across the state. Can you talk a little bit about how impact fees work in Illinois and some of the abuses you've seen, or what you're trying to correct with that specific provision?
Once again, we run into the complexities of regulation for what should be a relatively simple process. Impact fees are measured differently from one place to another. Obviously a different-size property or different number of units will yield a different impact fee and a different process, but it shouldn't be an enormous barrier. Impact fees should just be a standard thing. We want someone who wants to develop homes to be able to do it in this town and in that town and follow kind of a single set of rules. Even in that, we've left an awful lot of control at the local level. Think of it like a garden that's got a lot of weeds. We're just trying to pull some of the weeds so the garden grows better, and that's what I think we're doing on the impact fee front.
I know you're getting pushback from local governments, or at least organizations that represent them. Part of the relationship the state has in building housing is a partnership with local governments. What we've seen in California, Massachusetts, and other states that have done statewide housing reforms is that when local governments aren't a partner, there's a lot they can do to thwart reform and make it not happen. What's the sense in Illinois, and how do you pull the weeds while allowing the good stuff to grow, as you said?
It's a great question. There are mayors who are on board and think this is a great thing and want it for their community — indeed, some of them have already done this in their communities. Then there are mayors who really don't want it because they have this idea that we're taking power away from them. But the state's not going to make decisions about what kinds of developments you can have. We're just trying to take a little bit of the minimum off.
We have a municipal league here that represents 1,400 cities and towns, and they do a terrific job representing them. But I think the municipal league broadly decided that they don't want any power taken away from anybody locally, because it's their job to protect the power of local governments. They aren't looking at what the effect of that is. We have this massive shortage of homes, and nothing is catalyzing the creation of new homes in an environment where interest rates are six and a half percent for a mortgage and where a set of regulations in many places makes it just too expensive. The average home price in Illinois across the state is about $290,000, and about $360,000 in Chicago. If you can't build a home that allows you to make a profit, you're not going to build.
Right.
So again, what can we do at the state level? We can't control the price of drywall. We can't control the supply chains. We can't control the war in Ukraine that's raising gas prices for everybody and causing prices to go up on input goods. The answer is just to take away the regulatory overreach of a lot of local governments, while still leaving in their hands height restrictions and setbacks and that sort of thing. There's lots of opportunity for locals to have input here, and we're winning people over. It's very popular among the public.
I was going to ask you about the politics of this, because you're the governor, you run for office statewide, and you're not going to be able to do something that's broadly unpopular. Do you sense that you have the wind at your back with this?
I think I do. Look, there are some aspects of this that are easier for people to understand and want to have happen, and others where people say, wait a minute. I'll give an example — we have a single-stair reform. You may have heard of this.
Yeah.
Buildings that used to require two stairs because of their size or number of units — we're now only going to require one. There's an understandable concern: is there a fire hazard? I'm deeply concerned about that. I want to make sure nobody gets hurt. But when you talk to fire professionals and they look at modern buildings — we're not talking about old buildings or enormous buildings — we now know that because of fire-retardant materials that can be used in stairwells, pressurized stairwells, and all of the modern technology—
Commercial sprinkler systems—
Exactly — this allows you to require a sprinkler system with a single stair. We live in a modern world where you can do that sort of thing. Why is that important? The amount of space that a second stairwell takes up in a building means it's a lot more expensive for a developer to build, for example, a three- or four-story building with eight apartments. With a second stairwell, you can't really make it pencil out economically.
You'll get fewer units and all that, yeah.
All of that, right. If you think about the single-stair reform and the transit-oriented parking reform together, the amount you're bringing down in cost to a developer of new homes is significant, and that's just those two. But as you said, a lot of people just have in their heads the idea that with a single stair, what if there's a fire? I want to have two options in the building. But good fire professionals will tell you that with modern technology, you don't really need that. Again, we're not talking about high-rises, we're talking about low-rise.
We don't do politics at Strong Towns, but you're the governor of the state, and you're a few years older than me. I want to ask you a politics question, because I feel like you and I both grew up in a time — and I don't think I'm being too general here — where the Democratic party was often the party of regulation and the Republican party was the party of stripping back. You could categorize that however you want, and debate whether good or bad. We're in this period where everything's kind of being rewritten and we're going through, as they say, interesting times. Make the case for this moment of deregulation, particularly when it comes to housing. It feels like there is this broad coalition — I don't know if it's bipartisan in your state, or if this is mixing up the red and blue parts of your state. What's the politics of getting something like this passed in Illinois?
I would use a different word to describe what we're proposing than deregulation. I would just say this is pragmatic change. This isn't like the situation in North Carolina, where they allowed building homes in an area that was, you know, where there was a storm, those homes washed away because they did away with regulations locally. That's not at all what we're talking about here. These are pretty light changes, but they're pragmatic changes based upon what we know in the modern era that we don't need in terms of barriers.
The politics here are that we have Republican mayors favoring this and Democratic mayors favoring it, and similarly on the other side, Republicans supporting it. There is a mix. From my perspective, I don't think about it as, oh my gosh, I might become less popular. I'm really trying to solve problems. When you ask the public what they think, they think we should take a lot of these barriers away too. They like things like down payment assistance for first-time homebuyers. Everybody understands that's a great thing, although there are some Republicans who don't want to spend that money. But we need to give people a little help, particularly in this moment.
I understand what you're talking about. There's this word "abundance" that people have been using to describe this, because it came out of a book recently published. But listen, I was a businessman before I became governor. People think of me as a progressive governor who's also pragmatic. I want my businesses to thrive. Maybe that's not something people hear from all Democratic governors, but I want my businesses to thrive because if they do better, more jobs get created, people get paid more, and our state is better off. We want to grow the economy — it's the best way to pay for the things we need at the state level. That's the basis of how I approach this, and it really is bipartisan.
The other thing I would say is this proposal has been broken up into six bills. To the extent there are things that are less popular, like single-stair reform, the legislature could vote that down. I'd love for them to pass all of it, and we're trying really hard to get that done. But I also want to make sure we don't miss the forest for the trees. We have an opportunity here broadly to make developing a small extra unit here and there much cheaper, and even five of the six bills, or four of the six, any single one of them does affect the overall cost of a home.
In this environment where people are really strained, sometimes can't afford groceries and pharmaceuticals they need, are having trouble sending their kids to college or paying for back-to-school supplies — everything we can do helps. When people are thinking about going to buy or rent a home, that's the biggest expense of all. We've just banned junk fees here, we're going after homeowners insurance and auto insurance to make them less expensive, and those are all things. But if you look at all the bills on your table, when you're thinking, I need to move or I need to finally buy a home and not rent anymore — that's the biggest one people are facing. That's why I've made it a priority, and I don't think it's a Democratic or Republican thing. It's just an everyday common-sense thing.
Let me ask you a final question. I want you to put yourself in the mind of a resident of Illinois who's living in a neighborhood, has lived there for years, is not looking at moving, just wants to stay in place. If all six of these things pass and the initiatives come to be, what do you think their experience living in that neighborhood will be like over the next decade or more?
I think in many neighborhoods there won't be any change at all, but that's okay. I think that two blocks away, or right on your own block, instead of a single-family home, you might have a duplex, and so you'll have two families, or two couples, or maybe two single people living on your block on a property that still looks like a single-family home. It's still low-rise, still has the setback and height requirements of your local community.
The change I think people will experience is that you'll have housing for, like, your children — my kids are 21 and 23, and I think hopefully sometime in the next five or seven years before they turn 30, they might be able to go buy a home for themselves. I want them to be able to do it in my hometown. The same thing applies if you've got parents you want nearby. You've got maybe a garage on your property you could convert into a living space, because it's got plumbing and electricity, and you could convert that. You still have to get the permit, you still have to follow the rules, but allowing that to take place means you'll be able to have your parents living there. You can still restrict that from having, say, six students living in it. Local communities have the ability to restrict that and make sure it really is a single-family residence.
What I think will change in communities is just that we'll have a little more worker-friendly, middle-class housing everywhere, and the character of the community isn't going to change. I heard somebody arguing that in some wealthy communities like Lake Forest or Winnetka, there's going to be Section 8 or low-income housing next to mansions. That's not going to happen, and that's not at all what this authorizes. I really think the character is going to stay the same, but we're also going to have the ability for workers and families to own a home in a community where they're also working.
Someone described your proposals to me — I'm not sure if they said "radically modest" or "modestly radical." But what we're talking about here is something where if someone went and visited family for six months and came back, they might not even notice the new duplex up the street or the little cottage in the backyard, and yet it has the potential to build tens of thousands of units across the state in a very quick period of time.
We have more to do, by the way. Interest rates coming down would help — I know that's not something we all feel is happening right now, and it's not — but there are lots of other external things that can happen to make building and developing easier. I think that this is, as you said, modest. I just told you we need a couple hundred thousand more units across the state. We need to make it easier to take existing facilities, like your garage, and use that, and that's going to add tens of thousands, or at least thousands. Then we need people to decide they're going to maybe go into business and develop a fourplex to sell. Modest — I never like to think... my slogan when I ran for office in 2018 was "think big," and we've gotten a lot of big things done in the state. When you say modest, it's almost like a hit to me.
I said "radically modest."
Radically — there you go, radically. But I'm also saying, listen, if we can add 100,000 more units spread across the state, in those towns and cities you visited and others, like Carbondale and Quincy —
That'd be good for everybody.
Yeah, I really think we have a great opportunity here, and we'll see over the next nine days what we're going to be able to get passed. Maybe we'll get the whole package, and if not, we'll be back next year in the legislative session to get the rest of it done.
Governor JB Pritzker, thank you for taking the time. Let's finish up this session, and then maybe we can get together again and chat about housing and transportation and other things that Strong Towns is working on. Thank you for all you do.
Appreciate you, Chuck. Thanks for having me on.
Thanks everybody for listening. Keep doing what you can to build a strong town. Take care, everybody.
This episode was produced by Strong Towns, a nonprofit movement for building financially resilient communities. If what you heard today matters to you, deepen your connection by becoming a Strong Towns member at strongtowns.org/membership.