Illinois Realtors Slam Municipal League's REAL Housing Act

The trade group representing Illinois’ municipal governments pitched its own housing affordability plan this week as it seeks to topple Gov. JB Pritzker’s Build plan, drawing immediate fire from the Illinois Realtors trade association.

The Illinois Municipal League, the statewide group representing Illinois’ 1,294 cities, villages and towns, unveiled its Reducing Expenses and Advancing Local Housing Act — branded the Real Housing Act — on Wednesday. The group pitched the proposal as an alternative to Pritzker’s six-bill package of housing legislation that would override local zoning rules to allow more residential density.

Rather than mandating local governments allow denser “middle housing” like duplexes, triplexes and accessory dwelling units, the municipal league’s proposal would make those changes voluntary, offering local governments priority access to state infrastructure funding if they opt in to a Middle Housing Incentive Fund. It also calls for establishing voluntary overlay districts where local governments can allow multi-unit housing by right in certain areas, and a state program to incentivize blight elimination and redevelopment of vacant lots.

In suggestions that raised major red flags for the real estate industry, the proposal also calls for capping combined residential real estate commissions at 3 percent of a property’s final sale price and removing the state ban on local governments adopting rent stabilization measures. It also contains limits on rental deposits and rental application fees.

Brad Cole, CEO of the Illinois Municipal League, said in a Wednesday press release the proposal addresses housing costs without preempting local authority and removes barriers that delay and increase costs for developments.

“At a time when housing affordability is a top concern for Illinois residents, this proposal focuses on what actually works, with results-driven solutions,” Cole said in the release.

Illinois Realtors, the 50,000-member trade group representing the state’s real estate agents, criticized the proposal in a statement Friday afternoon. The group urged lawmakers to reject what it called late-stage disruption of the governor’s plan.

“This proposal isn’t just misguided, it’s dangerous,” Illinois Realtors CEO Jeff Baker said in a statement. “It raises serious legal questions, proposes outright price fixing and undermines the very goal of making housing more accessible.”

The Realtors group said the commission cap could violate U.S. antitrust laws and argued other measures in the proposal could limit supply and drive housing costs up.

In a statement to The Real Deal Friday, Cole said Illinois Realtors was looking out for income over housing affordability. He said the policy was an alternative for lawmakers to consider.

“Our proposal is aimed at improving housing affordability – that’s what we thought this was all about – not protecting the profits of Realtors,” Cole said.

The Real Housing Act calls for more than two dozen policy changes overall. One proposal calls for tying future increases in local governments’ share of income tax dollars to property tax relief. Among the other provisions are impact fee regulations, permit approval deadlines, a tax exemption on building materials and incentives for limiting parking requirements in residential developments.

Whether state lawmakers will take up the local government group’s proposal remains to be seen. Pritzker has aligned closely with Illinois Realtors this year, adding some of their priorities to his Build plan and speaking at their lobbying day conference in April for the first time. The municipal league previously said the governor declined an invitation to its own lobbying day on April 29.

State lawmakers considered Pritzker’s housing package in a hearing last month, taking input from opponents and supporters on the legislation. Lawmakers did not take a vote on the measures, but some showed interest in incorporating some local government suggestions in future versions of the bills.