A new report from the Illinois Economic Policy Institute reveals the state is facing a shortage of 142,000 housing units. To meet projected demand, Illinois must build at least 227,000 homes over the next five years. The report, You Can’t Buy What You Can’t Afford, points to a combination of factors: strong employment and income growth, low housing vacancy rates, and a spike in investor-owned properties.
Policy recommendations include:
- Easing zoning restrictions for multifamily housing
- Streamlining building permits
- Reforming parking requirements
- Offering development incentives
- Limiting short-term rentals
These reforms could help double current construction rates and improve affordability across Illinois.
Economic Snapshot
- Jobs added (May 2024–May 2025): +21,200 (22nd in U.S.)
- Unemployment rate: 4.8% (42nd)
- Average private sector wage: $35.04 (16th)
- Wage growth (YoY): +5.6% (9th)
- Illinois Flash Index (June 2025): 101.9
Project Labor Agreements: A Win for Workers and Taxpayers
A joint report by ILEPI and the University of Illinois’ Project for Middle Class Renewal found that public building projects with Project Labor Agreements (PLAs):
- Increased bid competition by 14%
- Controlled costs, even for large and complex projects
- Boosted apprenticeship enrollment by 28%
- Expanded opportunities for veteran-, women-, and minority-owned businesses
The study concludes PLAs enhance job quality, ensure timely project completion, and reduce taxpayer costs.
Modernizing Illinois’ Sales Tax
Illinois currently taxes only 29 of 176 common consumer services—far below what’s needed in a service-driven economy. A recent report, Modernizing Illinois’ Sales Tax, proposes broadening the tax base to include more services (excluding essentials like healthcare and housing).
This change could generate $2 billion annually, helping fund public needs like transit, pensions, and education while reducing tax burdens on low-income families.
Read the full reports and learn more at www.illinoisepi.org
