Chicago rents have soared to historic highs, but in Phoenix they’re falling. The reason? A greater housing supply. In 2024, Arizona issued more than three times as many building permits per capita than Illinois, approving 5.4 permits per 1,000 residents compared with Illinois’ measly 1.6.
Why? Arizona enacted the Permit Freedom Act, a bipartisan reform in 2023 that automatically approved permits if not acted on within 60 days, and approval criteria must be clear and objective.
Since implementation of the law, housing construction has surged in Arizona, with average permitting times slashed almost in half. In Phoenix, wait times dropped by over 12%, while other cities in the state saw reductions nearly five times that. This single reform is expected to add 3,800 new homes in Arizona every year by 2035, reduce new-home prices by 5%, create nearly 34,000 jobs and generate $6.4 billion in personal income in Arizona’s economy.
Now, Illinois lawmakers are debating whether passing their own legislation to remove unnecessary housing regulations is worth the ire of local municipal authorities. States such as Arizona prove that it absolutely is.
The legislation package being debated in Springfield has been labeled by Gov. J.B. Pritzker as his BUILD Plan. These bills set hard deadlines for permit reviews, allow more diverse kinds of housing on big lots, reduce mandatory parking requirements, and more. But local governments have raised strong objections to how this kind of legislation diminished local authority.
Unfortunately, local authority is what has caused much of the nation’s housing mess.
Too often, in states like Illinois, permitting decisions are dictated by vague standards and lack firm deadlines, leaving applicants vulnerable to the unpredictable pace of bureaucracy. Cities such as Chicago have kept the process hyper-local, maintaining a longstanding tradition of “aldermanic prerogative,” by which aldermen generally have the ultimate say over what gets developed in their wards, resulting in discrepancies across the city. Development opponents frequently exploit these vague criteria – such as “neighborhood character” or convoluted public hearing requirements – to delay or completely derail much-needed housing projects.
The desire to preserve the look and feel of a neighborhood is understandable, but property rights have been trampled in the process, resulting in little construction for the neighborhoods most in need.
As it stands, Illinois’ facing a deficit of 142,000 housing units and will need 227,000 new units by 2030 just to keep up with basic demand. That will require doubling the current production rates. According to the National Association of Home Builders, the cost of navigating red tape and adhering to regulations now accounts for nearly a quarter of the price of a single-family home and more than 40% of the price of multifamily developments. Opposition to development can add nearly 6% to the average home cost and delay completion by an average of 7.4 months. Today, one in five members of Gen Z now list housing affordability as their top concern, and 1.5 million more adults under 35 are living with their parents compared with 10 years ago. Young families are being priced out of their hometowns and can’t afford to live close to their families.
They then try to offset the damage caused by these regulations by introducing artificial affordability through policies such as inclusionary zoning, which require new developments of 10 or more apartments to include rent-capped units for low-income families. These policies discourage development – even of luxury apartment buildings which would relieve some of the supply constraints.
Meanwhile, in Arizona cities such as Phoenix, local governments are forbidden from enacting mandatory inclusionary zoning programs. They don’t need them because they’re free to build enough housing for everyone.
If Illinois is going to reverse those trends, objective criteria and guardrails for local authority are important.
The Permit Freedom Act is a proven model for addressing America’s housing crisis. By streamlining approvals, mandating clear and objective standards and enforcing strict decision timelines, Arizona has surged construction, reduced prices and fueled significant job growth and economic gains. Supporting the BUILD Plan, and taking the necessary steps to give future generations access to affordable, thriving communities in Illinois, is worth the temporary dissatisfaction of some local governments.
