Mayor Johnson’s affordable housing plan is an expensive mirage that will do nothing to address the city’s housing crisis. A strategy that unleashes the housing market and caps housing costs is what’s needed
Chicago is facing one of the worst affordable housing crises in the nation, yet Mayor Brandon Johnson has no comprehensive strategy to address it — unless one counts his focus on housing migrants. Johnson’s touted “reforms” have been largely cosmetic, while his generous subsidies to often politically connected developers have yielded minimal results at extraordinary cost. Meanwhile, there’s a clear, cost-effective path forward that his administration has ignored.
Chicago’s worsening affordable housing crisis
Chicago home prices have risen faster than the national average, driven by a severe housing shortage. Local inventory remains about half of pre-pandemic levels, pushing competition — and prices — upward. According to the S&P CoreLogic Case-Shiller Index, Chicago recently ranked first among major U.S. cities in home price increases.
Lamentably, low-income renters are under similar strain. Chicago ranked among national leaders in rent growth in 2025, with year-over-year increases between 4.4 percent and 6 percent. The average rent of $2,461 is roughly $700 above the national average. Since before the pandemic, rents are up about 35 percent, far outpacing wage growth causing over 75 percent of low-income households to be cost-burdened, spending over 30 percent of their income on housing.
With disinvestment and gentrification, especially on the South and West Sides, Chicago is facing declining housing stock, while other areas face rising rents, leading to displacement. Chicago faces a critical shortage of roughly 120,000 affordable rental units. A joint report by Housing Action Illinois and the National Low Income Housing Coalition found only 31 affordable units available for every 100 extremely low-income renters in the metro area.
Johnson’s mythical affordable housing strategy
Mayor Johnson has consistently claimed massive investments in affordable housing and the city’s decline in murders and non-lethal shootings are the result not of more proactive policing under the leadership of Police Superintendent Larry Snelling, who he rarely acknowledges, or the policies detaining dangerous, habitual criminals applied by State Attorney’s Eileen O’Neill Burke, which he completely ignores. Far from praising the Police Superintendent and State’s Attorney, Johnson has attributed reductions in violent crime to his affordable housing policies.
Recall the Mayor’s claim last year that the city “invested $11 billion” to “build 10,000 more units of affordable housing” — a projected cost of $1.1 million per unit. His actual record on affordable housing is minuscule: Through 2025 it amounted to a recommitment of $324 million in subsidies to produce just 505 units downtown, a commitment originally made by Mayor Lori Lightfoot.
This year has seen the mayor announcing limited affordable housing commitments with much fanfare such as the recent ribbon cutting on two affordable housing units that the city spent $150,000 a piece subsidizing or his recent announced investment of $300 million to create or “preserve” 1,223 housing units, a mere 1,164 of which qualify as affordable. The city’s substituting massive developer subsidies for a comprehensive affordable housing approach has seen the cost to build new city-funded affordable housing has surged rising from an average $400,000 to nearly $750,000 per unit since 2019.
The administration’s numbers simply don’t add up. Spending hundreds of thousands in subsidies to produce a handful of units is unsustainable. Chicago needs a cohesive plan that expands available housing by removing regulatory barriers, enabling more homebuilding, and supporting the rehabilitation of vacant properties — all while protecting residents from gentrification through property tax stability.
So what does an affordable housing policy look like? Clearly it is not one dominated by these massive housing subsidies which make nary a dent in addressing the needs while providing the city no real investment and squandering hundreds of millions of taxpayer dollars. A comprehensive housing policy requires that you sweep away the barriers to increasing supply while reducing the cost of home ownership and renting.
Removing barriers to new construction
The mayor’s “Cut the Tape” initiative, released last May, was intended to remove obstacles to affordable housing construction and conversion. Johnson’s annual reports said more than 90 percent of the original 107 recommendations had been completed or were in progress. However, roughly half of the items marked as “completed” merely created committees, roundtables, checklists or training. Another quarter of those considered completed simply put forms online, accepted digital signatures or launched software portals.
Critical to addressing the affordable hour crisis is expediting the permitting process. In 2024, Chicago issued only 4,039 residential building permits (just 321 single-family homes) compared to Houston’s 52,000. Roughly 17 percent of zoning applications were rejected due to process delays or incomplete submissions. At the same time, over 1,300 properties required three or more inspections per year, according to a Harvard Kennedy School study — a bureaucratic bottleneck that stifles supply.
Allowing duplexes, triplexes, and accessory units (ADUs) in these areas would meaningfully expand supply. Yet since ADUs were legalized in 2021, the city has permitted only about 400 total units — a missed opportunity to introduce lower-cost housing into existing neighborhoods.
Chicago must just not relax restrictions but expedite permitting. Over 40 percent of the city’s land is zoned exclusively for single-family homes. Allowing duplexes, triplexes, and accessory units (ADUs) in these areas would meaningfully expand supply. Yet since ADUs were legalized in 2021, the city has permitted only about 400 total units through 2025— a missed opportunity to introduce lower-cost housing into existing neighborhoods.
Restoring vacant and abandoned properties
The U.S. Census Bureau’s American Community Survey (ACS) Chicago frequently cites figures around 121,000 to 129,000 units, about 10 percent of total stock. Almost two thirds of the units are considered long term vacancies, vacant for reasons such as ongoing renovations, personal family reasons, or abandonment. Beyond existing structures, the city owns roughly 8,800 to 10,000 vacant lots, the vast majority of which are zoned for residential use.
A strategic program to secure, transfer, and rehabilitate these properties could yield thousands of affordable units quickly. Partnering with local developers and community-based organizations, the city could offer rehab grants and temporary property tax abatements until restore units are occupied. In exchange, taking a modest equity stake in these projects would build long-term fiscal value and generate assets that can be leveraged for future investments.
The city should establish an Affordable Housing Trust (AHT) fund with the power to secure vacancy 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 supporting an array of community based affordable housing projects ensuring a long-term return that can be used to finance future projects.
Leveraging federal incentives
The recent expansion of the federal Low-Income Housing Tax Credit (LIHTC) — part of the July 4th “One Big Beautiful Bill Act”signed by President Trump — increases available credits by 12 percent and reduces the bond threshold required to qualify. Analysts at Novogradac estimate these changes could support the construction of 34,700 new affordable units in Illinois, generating about $2 billion in tax revenue. Illinois should move quickly to supplement this federal program with a state-level Build Illinois Homes Tax Credit, providing upfront capital critical to making projects financially viable.
Furthermore, Chicago should harness the power of Opportunity Zones (OZs) created in the Tax Cuts and Jobs Act of 2017. There are 135 designated Qualified Opportunity Zones in the City of Chicago, established under the 2018 federal framework. These zones, largely situated on the South and West Sides, represent census tracts aimed at boosting investment in under-resourced neighborhoods. The program enacted during President Trump’s first administration was made permanent in July 2025 by the "One Big Beautiful Bill Act." The program will see new zone designations based on updated Census data.
These zones allow investors to defer capital gains taxes when reinvesting in designated low-income areas. An estimated $89 billion to over $100 billion in private capital investment through Qualified Opportunity Funds (QOFs) by 2022–2025. The program, aimed at encouraging investment in distressed communities, has largely favored real estate projects, with studies noting a concentration in urban areas with existing growth. Chicago, however, failed to benefit due to the political hesitation to associate any initiative with Trump.
Capping property taxes to curb gentrification
Over the last decade, city property taxes have surged. The city’s levy now exceeds $1.8 billion, up 105 percent since 2014. Chicago Public Schools revenue from property taxes rose 74 percent in the same period, while TIF property tax captures skyrocketed 266 percent from $370 million to $1.4 billion annually. Altogether, total property tax collections have risen 103 percent more than triple inflation (29 percent) over that decade.
As commercial property values fall — particularly downtown — the tax burden has shifted toward residential homeowners. Capping annual increases on individual parcels would stabilize housing costs, encourage small business growth, and mitigate displacement. Lost revenue would likely be offset by stronger economic activity and a larger, healthier property base.
Furthermore, accelerating development risks heightening gentrification pressures forcing senior citizens, families on fixed incomes and low income families in general out of homes, often with few affordable alternatives. It also often places significant pressure on small neighborhood businesses. The cap on annual property tax increases on individual parcels address the gentrification issue ensuring that long-term residents as well as small businesses aren’t displaced by large gentrification driven property tax increases.
Mayor Johnson’s housing policy is deceptive and wholly insufficient
Mayor Johnson’s rhetoric on affordable housing masks a major policy void. His current approach has produced negligible results at irresponsible per unit costs. Real progress will come only through market-friendly reforms, streamlined regulation, intelligent use of existing resources and taking a rest from politics long enough to take advantage of federal incentives that have been made available by the Trump administration.
Most importantly it will also require that the cost of home ownership and of renting be affordable. This means putting a limit on property increases on individual residential (and commercial) 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.
