Mayor Johnson’s PRO Ordinance is meaningless grandstanding. What Chicago needs is a strategy that unleashes the housing market and caps housing costs
The most onerous provisions of Mayor Brandon Johnson’s so-called renters-protection ordinance — provisions that would likely have increased rents while reducing the number of affordable rental units — have been omitted. Unfortunately, the ordinance still creates a massive bureaucracy that will further burden landlords and developers. That risks worsening the city’s affordable-housing crisis, as it becomes increasingly clear the mayor and his supporters have yet to offer a comprehensive strategy to address Chicago’s housing-affordability problem.
Johnson’s renters “nuisance” ordinance
Johnson’s original Protecting Renters Ordinance (PRO) created a “tenant bill of rights” that, among other provisions, banned landlords from charging tenants move-in fees or other so-called “junk fees,” created a citywide rental registry, and created a new Bureau of Rental Housing Services within the Department of Housing. The proposal would be funded through landlord registration fees ranging from $20 to $60 per rental unit, which city officials estimate would raise approximately $22 million annually.
The original proposal also required landlords to provide just cause for evictions and, in some cases, to pay thousands of dollars in relocation assistance to tenants whose leases were not renewed for reasons other than failure to pay rent, a serious lease violation, or a tenant’s refusal to renew a lease. Johnson scaled back the proposal by dropping the just-cause requirement and the related relocation-assistance provisions.
If the ordinance passes, the mayor will be able to check another box, claiming that he has provided renters with historic protections. He will also add rental-property owners to the list of bogeymen he can rail against when he fails to deliver on his promise to make housing in Chicago more affordable. Chicago faces a serious affordable-housing crisis, yet Mayor Johnson has no comprehensive strategy to address it.
Chicago’s rising housing costs
Chicago home prices have risen faster than the national average. In June, Chicago led the 20 major metropolitan areas tracked by the S&P Cotality Case-Shiller Index, recording a 6.9 percent annual increase in home prices, compared with a 1.5 percent increase nationally. Local housing inventory remains well below pre-pandemic levels, driving greater competition for available homes.
Low-income renters are under similar strain. The Chicago metro area has only 31 affordable and available rental homes for every 100 extremely low-income renter households, according to Housing Action Illinois and the National Low Income Housing Coalition. The same analysis estimates that the Chicago metropolitan area lacks 224,445 affordable homes for extremely low-income renters.
With disinvestment and gentrification — especially on the South and West Sides — Chicago is confronting declining housing stock in some neighborhoods and property taxes on owner occupied homes and rental properties driving up rents, leading to displacement. The shortage of affordable rental housing is increasingly severe, and requires more than another bureaucracy.
Johnson’s claims on affordable housing
At last week’s Austin United Alliance Apartments press event, the mayor highlighted a 78-unit mixed-income development, 50 units of which are designated as affordable. The development’s total cost was reported at $51.7 million, or approximately $663,000 per apartment. The project received a financing package that included $12.9 million in TIF funding, $14.45 million in Department of Housing multifamily loan funds, and an estimated $20.7 million in Low Income Housing Tax Credit (LIHTC) equity.
That distinction matters: The $51.7 million figure is the project’s total development cost, not simply a city subsidy. The broader problem remains. Spending hundreds of thousands of dollars per unit to produce a limited number of apartments is not a sustainable citywide strategy. Chicago needs a cohesive plan that expands available housing by removing regulatory barriers, enabling more homebuilding, and supporting the rehabilitation of vacant properties — while also limiting annual revenue growth from unimproved residential property.
What a legitimate affordable-housing policy looks like
A comprehensive affordable-housing plan cannot be dominated by massive subsidies that make only a modest dent in the need, provide the city with little lasting investment, and consume hundreds of millions of taxpayer dollars. A comprehensive housing policy requires sweeping away barriers to increasing supply while reducing the cost of homeownership and renting.
First: Cut the red tape
The mayor’s “Cut the Tape” initiative, released in May 2024, was intended to remove obstacles to affordable-housing construction and conversion. The city reported that 96 of its original 107 recommendations were either fully implemented or underway after one year. Nonetheless, implementation should not be confused with meaningful reform.
An Illinois Policy Institute analysis found roughly half of the measures classified as “completed” consisted of committees, roundtables, checklists, or training programs. Another quarter involved putting forms online, accepting digital signatures, or launching software portals. These steps may improve administration, but they do not necessarily remove the deeper regulatory barriers that limit construction.
Second: Expedite permitting and zoning
Critical to addressing the affordable-housing crisis is expediting the permitting process, including zoning approvals. Chicago issued only 4,039 new residential building permits in 2024, including 321 single-family detached homes, compared with approximately 52,000 residential permits issued in Houston.
Chicago should permit duplexes, triplexes, and accessory dwelling units more broadly in neighborhoods where current zoning restricts them. These types of housing are often more attainable for seniors, newly married couples, and single adults. The city has expanded ADU rules in recent years, but implementation should be evaluated against a clear production goal.
Third: Restoring vacant and abandoned properties
Census vacancy figures should be interpreted carefully, since a vacant unit is not necessarily abandoned or available for immediate occupancy. Units may be vacant because they are being renovated, held for family use, or otherwise temporarily off the market. Still, Chicago’s vacant buildings and vacant lots represent a major opportunity.
A strategic program to secure, transfer, and rehabilitate appropriate vacant properties could yield thousands of affordable units more quickly than constructing every unit from the ground up. Partnering with local developers and community-based organizations, the city could offer rehabilitation grants and temporary property-tax abatements until restored units are occupied. In exchange, the city could take a modest equity stake in certain projects, building long-term fiscal value and generating assets that can be leveraged for future investments.
The city should establish an Affordable Housing Trust fund with the power to secure vacant property and the resources to make investments. It could be supported by a share of city TIF surpluses, housing fines, and potentially gaming revenues. The trust could take equity positions in an array of community-based affordable-housing projects, helping ensure a long-term return that can finance future projects.
Fourth: Leveraging federal incentives
Last year’s expansion of the federal Low-Income Housing Tax Credit, enacted as part of the One Big Beautiful Bill Act, permanently increased nine percent LIHTC allocations by 12 percent and reduced the bond-financing threshold for certain four percent LIHTC projects. Novogradac estimated that the changes could support construction of 34,700 affordable homes in Illinois and generate approximately $2 billion in state and local tax revenue.
Illinois should move quickly to supplement this federal program with a state-level Build Illinois Homes Tax Credit, providing the upfront capital that is often critical to making projects financially viable.
Chicago should also prepare to harness the next generation of Opportunity Zones. The One Big Beautiful Bill Act made the federal Opportunity Zone incentive permanent, but the current set of zones will expire at the end of 2026. New designations will take effect on January 1, 2027, based on updated eligibility rules and a new nomination process.
Chicago and Illinois should be prepared to use that opportunity to attract private investment to eligible South and West Side neighborhoods. Opportunity Zones allow investors to defer capital-gains taxes when reinvesting in designated low-income communities. The program has attracted substantial private investment nationally, Chicago should approach the next designation cycle with a strategy that emphasizes housing, neighborhood revitalization, and transparent community benefit.
Fifth: Capping property taxes to curb gentrification
Over the last decade, city property taxes have risen sharply. A 2024 Wirepoints analysis found that Chicago’s property-tax levy had grown to nearly $1.8 billion, up 105 percent since 2014; it also reported that annual TIF revenues had risen to roughly $1.4 billion, a 266 percent increase over the same period.
As commercial-property values fall — particularly downtown — the tax burden shifts toward residential homeowners. New development, where it occurs, can also heighten gentrification. Capping annual increases on individual parcels when no improvements have been made would stabilize housing costs, encourage small-business growth, and help mitigate displacement. The city should assess the fiscal effects of such a policy and identify revenue offsets that do not simply transfer the burden to other property owners.
Johnson’s housing policy is insufficient
Mayor Johnson’s rhetoric on affordable housing masks a major policy void. His current approach has produced limited results at high per-unit costs. Real progress comes only through market-friendly reforms, streamlined regulation, intelligent use of existing resources, and a willingness to take advantage of federal incentives made available by the Trump administration.
Chicago must make the cost of maintaining a home and renting affordable. That requires limiting property-tax increases on individual residential and commercial parcels when there have been no improvements. Without these changes, housing will remain out of reach for a growing share of Chicagoans and the city’s affordability crisis will deepen.
