HB5198 104TH GENERAL ASSEMBLY

LRB104 18044 KTG 31483 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5198

Introduced 2/10/2026, by Rep. Tracy Katz Muhl

SYNOPSIS AS INTRODUCED:

310 ILCS 67/5
310 ILCS 67/10
310 ILCS 67/15
310 ILCS 67/20
310 ILCS 67/25
310 ILCS 67/30
310 ILCS 67/50
310 ILCS 67/60

Amends the Affordable Housing Planning and Appeal Act. Requires non-exempt local governments to provide residents with notice and the opportunity for comment at a public hearing prior to adopting an affordable housing plan. Requires a non-exempt local government to provide proof of its compliance with the notice and public hearing requirements when it submits a copy of its affordable housing plan to the Illinois Housing Development Authority. Expands the list of information that must be provided in the affordable housing plan to include, (i) an identification of "specific lands" (rather than "lands") within the jurisdiction that are most appropriate for the construction of affordable housing, (ii) proposed timelines to commence "specific actions and deadlines" (rather than "actions") to implement the components of the affordable housing plan, and (iii) incentives, including certain measures to address the need for affordable housing, that the local government may provide for the purpose of attracting affordable housing. In a provision permitting certain persons to appeal a local government's denial of a proposed affordable housing plan, expands the list to include a service provider that is under contract to provide services for potential residents of a proposed supportive housing project or community-integrated living arrangement that is included in the proposed affordable housing plan. Contains provisions concerning final actions or decisions by the governing body of the local government on the proposed affordable housing plans; appeal procedures and timelines; and other matters. Expands the Illinois Housing Development Authority's rulemaking authority to include the adoption of rules and regulations concerning the substance of affordable housing plans consistent with the changes made in the amendatory Act.

A BILL FOR

AN ACT concerning housing.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Affordable Housing Planning and Appeal Act is amended by changing Sections 5, 10, 15, 20, 25, 30, 50, and 60 as follows:

(310 ILCS 67/5)

Sec. 5. Findings. The legislature finds and declares that:

(1) there exists a shortage of affordable, accessible, safe, and sanitary housing in the State;

(2) it is imperative that action be taken to ensure assure the availability of housing for the State's workforce, retired persons, and low-income and moderate-income households, including households that have persons with disabilities and retirement housing;

(3) it is necessary for local governments in the State that do not have sufficient affordable housing are encouraged to assist in providing affordable housing opportunities to ensure assure the health, safety, and welfare of all citizens of the State;

(4) increasing the inventory and affordability of housing choices for people earning between 80% and 140% of household the area median income, termed the missing middle, also helps preserve affordable housing, prevents homelessness, and encourages investment in more inclusive, mixed-income communities throughout the State; and

(5) studying the inventory and affordability gaps that affect the missing middle is also crucial to ensuring workforce and retirement housing in the State.

(Source: P.A. 104-319, eff. 1-1-26.)

(310 ILCS 67/10)

Sec. 10. Purpose. The purpose of this Act is to encourage counties and municipalities to incorporate affordable housing within their housing stock sufficient to meet the needs of their county or community. Further, affordable housing developers who believe that they have been unfairly treated due to the fact that a proposed the development contains affordable housing may seek relief from local ordinances and regulations that may inhibit the construction of affordable housing needed to serve low-income and moderate-income households in this State.

(Source: P.A. 93-595, eff. 1-1-04.)

(310 ILCS 67/15)

Sec. 15. Definitions. As used in this Act:

"Affordable housing" means housing that has a value or cost or rental amount that is within the means of a household that may occupy moderate-income or low-income housing. In the case of owner-occupied dwelling units, housing that is affordable means housing in which mortgage, amortization, taxes, insurance, and condominium or association fees, if any, constitute no more than 30% of the gross annual household income for a household of the size that may occupy the unit. In the case of dwelling units for rent, housing that is affordable means housing for which the rent and utilities constitute no more than 30% of the gross annual household income for a household of the size that may occupy the unit. In the case of dwelling units for rent, the costs of any required parking, maintenance, or landlord-imposed fees are to be included in the calculation of affordable housing if available from the U.S. Census Bureau.

"Affordable housing developer" means a nonprofit entity, limited equity cooperative or public agency, or private individual, firm, corporation, or other entity seeking to build an affordable housing development.

"Affordable housing development" means (i) any housing that is subsidized by the federal or State government or (ii) any housing in which at least 20% of the dwelling units are subject to covenants or restrictions that require that the dwelling units be sold or rented at prices that preserve them as affordable housing for a period of at least 15 years, in the case of owner-occupied housing, and at least 30 years, in the case of rental housing.

"Approving authority" means the governing body of the county or municipality.

"Area median household income" means the median household income adjusted for family size for applicable income limit areas as determined annually by the federal Department of Housing and Urban Development under Section 8 of the United States Housing Act of 1937.

"Community-integrated living arrangement" has the meaning ascribed to that term in Section 3 of the Community-Integrated Living Arrangements Licensure and Certification Act.

"Community land trust" means a private, not-for-profit corporation organized exclusively for charitable, cultural, and other purposes and created to acquire and own land for the benefit of the local government, including the creation and preservation of affordable housing.

"Development" means any building, construction, renovation, or excavation or any material change in any structure or land, or change in the use of such structure or land, that results in a net increase in the number of dwelling units in a structure or on a parcel of land by more than one dwelling unit.

"Exempt local government" means any local government in which at least 25% 10% of its total year-round housing units are affordable, as determined by the Illinois Housing Development Authority in accordance with Section 20, or any municipality with a population under 2,500 1,000.

"Household" means the person or persons occupying a dwelling unit.

"Housing organization" means a trade or industry group engaged in the construction or management of housing units, or a nonprofit organization whose mission includes providing or advocating for increased access to housing for low or moderate-income households.

"Housing trust fund" means a separate fund, either within a local government or between local governments pursuant to intergovernmental agreement, established solely for the purposes authorized in subsection (d) of Section 25, including, without limitation, the holding and disbursing of financial resources to address the affordable housing needs of individuals or households that may occupy low-income or moderate-income housing.

"Local government" means a county or municipality.

"Low-income housing" means housing that is affordable, according to the federal Department of Housing and Urban Development, for either home ownership or rental, and that is occupied, reserved, or marketed for occupancy by households with a gross household income that does not exceed 50% of the area median household income.

"Moderate-income housing" means housing that is affordable, according to the federal Department of Housing and Urban Development, for either home ownership or rental, and that is occupied, reserved, or marketed for occupancy by households with a gross household income that is greater than 50% but does not exceed 80% of the area median household income.

"Non-appealable local government requirements" means all essential requirements that protect the public health and safety, including any local building, electrical, fire, or plumbing code requirements or those requirements that are critical to the protection or preservation of the environment.

"Special needs populations" means the special needs populations described in subsection (e) of Section 8 of the Illinois Affordable Housing Act.

"Supportive housing" means permanent or transitional housing with access to the needed supportive services which enable special needs populations to live as independently as possible.

(Source: P.A. 102-175, eff. 7-29-21; 103-487, eff. 1-1-24.)

(310 ILCS 67/20)

Sec. 20. Determination of exempt local governments.

(a) The Beginning October 1, 2004, the Illinois Housing Development Authority shall determine which local governments are exempt and not exempt from the operation of this Act based on an identification of the total number of year-round housing units in the most recent data from the U.S. Census Bureau for each local government within the State and by an inventory of owner-occupied and rental affordable housing units, as defined in this Act, for each local government from the U.S. Census Bureau and other relevant sources.

(b) The Illinois Housing Development Authority shall make this determination by:

(i) totaling the number of owner-occupied housing units in each local government that are affordable to households with a gross household income that is less than 80% of the median household income within the county or primary metropolitan statistical area;

(ii) totaling the number of rental units in each local government that are affordable to households with a gross household income that is less than 60% of the median household income within the county or primary metropolitan statistical area;

(iii) adding the number of owner-occupied and rental units for each local government from items (i) and (ii); and

(iv) dividing the sum of (iii) above by the total number of year-round housing units in the local government as contained in the latest U.S. Census Bureau and multiplying the result by 100 to determine the percentage of affordable housing units within the jurisdiction of the local government.

(c) The Beginning on the effective date of this amendatory Act of the 98th General Assembly, the Illinois Housing Development Authority shall publish a list of exempt and non-exempt local governments and the data that it used to calculate its determination at least once every 5 years. The data shall be shown for each local government in the State and for the State as a whole. Upon publishing a list of exempt and non-exempt local governments, the Illinois Housing Development Authority shall notify a local government that it is not exempt from the operation of this Act and provide to it the data used to calculate its determination.

(d) A local government or developer of affordable housing may appeal the determination of the Illinois Housing Development Authority as to whether the local government is exempt or non-exempt under this Act in connection with an appeal under Section 30 of this Act.

(e) Additionally, the Illinois Housing Development Authority shall make the following calculations:

(i) totaling the number of owner-occupied housing units in each local government that are affordable to households with a gross household income that is at or below 30% of the median household income within the county or primary metropolitan statistical area;

(ii) totaling the number of rental units in each local government that are affordable to households with a gross household income that is at or below 30% of the median household income within the county or primary metropolitan statistical area;

(iii) adding the number of owner-occupied and rental units for each local government from items (i) and (ii);

(iv) dividing the sum of (iii) above by the total number of year-round housing units in the local government as contained in the latest U.S. Census Bureau and multiplying the result by 100 to determine the percentage of extremely low-income affordable housing units within the jurisdiction of the local government;

(v) totaling the number of owner-occupied housing units in each local government that are affordable to households with a gross household income that is between 80% and 140% of the median household income within the county or primary metropolitan statistical area;

(vi) totaling the number of rental units in each local government that are affordable to households with a gross household income that is between 60% and 80% of the median household income within the county or primary metropolitan statistical area;

(vii) totaling the number of rental units in each local government that are affordable to households with a gross household income that is between 80% and 140% of the median household income within the county or primary metropolitan statistical area;

(viii) adding the number of owner-occupied and rental units for each local government from items (v), (vi), and (vii); and

(ix) dividing the sum of (viii) above by the total number of year-round housing units in the local government as contained in the latest U.S. Census Bureau and multiplying the result by 100 to determine the percentage of affordable middle housing units within the jurisdiction of the local government.

(f) Beginning on the effective date of this amendatory Act of the 104th General Assembly, the Illinois Housing Development Authority shall publish the data collected under paragraphs (i) through (ix) of subsection (e). The data shall be shown for each local government in the State and for the State as a whole and shall be published at least once every 5 years. The Illinois Housing Development Authority shall also compile the collected data into a report and submit the report to the General Assembly.

(g) The data collected under subsection (e) shall be for informational purposes only and shall not factor into the determination of exempt local governments.

(Source: P.A. 104-319, eff. 1-1-26.)

(310 ILCS 67/25)

Sec. 25. Affordable housing plan.

(a) Prior to April 1, 2005, all non-exempt local governments must approve an affordable housing plan. Any local government that is determined by the Illinois Housing Development Authority under Section 20 to be non-exempt for the first time based on the recalculation of U.S. Census Bureau data after 2010 shall have 18 months from the date of notification of its non-exempt status to approve an affordable housing plan under this Act. A non-exempt local government must provide On and after the effective date of this amendatory Act of the 102nd General Assembly, an affordable housing plan, or any revision thereof, shall not be adopted by a non-exempt local government until notice to residents and the opportunity for comment at a public hearing in accordance with the Open Meetings Act prior to adopting its affordable housing plan have first been afforded.

(b) For the purposes of this Act, the affordable housing plan shall consist of at least the following:

(i) a statement of the total number of affordable housing units that are necessary to exempt the local government from the operation of this Act as defined in Section 15 and Section 20;

(ii) an identification of specific lands within the jurisdiction that are most appropriate for the construction of affordable housing and of existing structures most appropriate for conversion to, or rehabilitation for, affordable housing, including a consideration of affordable housing for both owner-occupied dwelling units and dwelling units for rent, lands and structures of developers who have expressed a commitment to provide affordable housing, and lands and structures that are publicly or semi-publicly owned;

(iii) incentives, including, but not limited to, the measures outlined in subsection (d), that the local government local governments may provide for the purpose of attracting affordable housing to their jurisdiction;

(iv) a description of any housing market conditions, infrastructure limitations, local government ordinances, including zoning and land use ordinances, local government policies or practices that do not affirmatively further fair housing as defined in the federal Fair Housing Act, and other factors that may constrain the local government's ability to create and preserve affordable housing;

(v) a plan or potential strategies to eliminate or mitigate these constraints identified in item (iv);

(vi) one or more of the following goals: a minimum of 15% of all new development or redevelopment within the local government that would be defined as affordable housing in this Act; a minimum of a 5 percentage point increase in the overall percentage of affordable housing within its jurisdiction, as described in subsection (b) of Section 20 of this Act; or a minimum of a total of 10% affordable housing within its jurisdiction as described in subsection (b) of Section 20 of this Act. These goals may be met, in whole or in part, through the creation of affordable housing units under intergovernmental agreements as described in subsection (e) of this Section; and

(vii) proposed timelines to commence, within the first 24 months after the date upon which the affordable housing plan was adopted, for specific actions and deadlines to implement the components of the affordable housing plan.

Local governments that have previously been determined as a non-exempt municipality and that have submitted an affordable housing plan shall also include a summary of actions taken to implement the previously submitted plan, as well as a summary of progress made toward achieving the goals of the plan.

To comply with the affordable housing plan requirements, no later than 4 years after adopting or updating an affordable housing plan the local government shall submit a report to the Illinois Housing Development Authority summarizing actions taken to implement the current plan.

(c) Within 60 days after the adoption of an affordable housing plan or revisions to its affordable housing plan, the local government must submit a copy of that plan to the Illinois Housing Development Authority. The non-exempt local government shall provide proof of compliance with the notice and other requirements described in subsection (a) as part of its submission.

(d) In order to promote the goals of this Act and to maximize the creation, establishment, or preservation of affordable housing throughout the State of Illinois, a local government, whether exempt or non-exempt under this Act, may adopt the following measures to address the need for affordable housing:

(1) Local governments may individually or jointly create or participate in a housing trust fund or otherwise provide whole or partial funding or support for the purpose of supporting affordable housing, including, without limitation, to support the following affordable housing activities:

(A) Housing production, including, without limitation, new construction, rehabilitation, and adaptive re-use.

(B) Acquisition, including, without limitation, land, single-family homes, multi-unit buildings, and other existing structures that may be used in whole or in part for residential use.

(C) Rental payment assistance.

(D) Home-ownership purchase assistance.

(E) Preservation of existing affordable housing.

(F) Weatherization.

(G) Emergency repairs.

(H) Housing related support services, including homeownership education and financial counseling.

(I) Grants or loans to not-for-profit organizations engaged in addressing the affordable housing needs of low-income and moderate-income households.

(J) Participation in affordable housing special assessment programs as authorized under Section 15-178 of the Property Tax Code.

Local governments may authorize housing trust funds to accept and utilize funds, property, and other resources from all proper and lawful public and private sources so long as those funds are used solely for addressing the affordable housing needs of individuals or households that may occupy low-income or moderate-income housing.

(2) A local government may create a community land trust, which may: acquire developed or undeveloped interests in real property and hold them for affordable housing purposes; convey such interests under long-term leases, including ground leases; convey such interests for affordable housing purposes; and retain an option to reacquire any such real property interests at a price determined by a formula ensuring that such interests may be utilized for affordable housing purposes.

(3) A local government may use its zoning powers to require the creation and preservation of affordable housing as authorized under Section 5-12001 of the Counties Code and Section 11-13-1 of the Illinois Municipal Code.

(4) A local government may accept donations of money or land for the purpose of addressing the affordable housing needs of individuals or households that may occupy low-income or moderate-income housing. These donations may include, without limitation, donations of money or land from persons, as long as the donations are demonstrably used to preserve, create, or subsidize low-income housing or moderate-income housing within the jurisdiction.

(e) In order to encourage regional cooperation and the maximum creation of affordable housing in areas lacking such housing in the State of Illinois, any non-exempt local government may enter into intergovernmental agreements under subsection (e) of Section 25 with local governments within 10 miles of its corporate boundaries in order to create affordable housing units to meet the goals of this Act. A non-exempt local government may not enter into an intergovernmental agreement, however, with any local government that contains more than 25% affordable housing as determined under Section 20 of this Act. All intergovernmental agreements entered into to create affordable housing units to meet the goals of this Act must also specify the basis for determining how many of the affordable housing units created will be credited to each local government participating in the agreement for purposes of complying with this Act. All intergovernmental agreements entered into to create affordable housing units to meet the goals of this Act must also specify the anticipated number of newly created affordable housing units that are to be credited to each local government participating in the agreement for purposes of complying with this Act. In specifying how many affordable housing units will be credited to each local government, the same affordable housing unit may not be counted by more than one local government.

(f) To enforce compliance with the provisions of this Section, and to encourage local governments to submit their affordable housing plans to the Illinois Housing Development Authority in a timely manner, the Illinois Housing Development Authority shall notify any local government and may notify the Office of the Attorney General that the local government is in violation of State law if the Illinois Housing Development Authority finds that the affordable housing plan submitted is not in substantial compliance with this Section or that the local government failed to submit an affordable housing plan. The Attorney General may enforce this provision of the Act by an action for mandamus or injunction or by means of other appropriate relief.

(g) The Illinois Housing Development Authority shall post each affordable housing plan submitted by a local government on the Illinois Housing Development Authority's website.

(Source: P.A. 102-175, eff. 7-29-21; 103-487, eff. 1-1-24.)

(310 ILCS 67/30)

Sec. 30. Appeal to State Housing Appeals Board.

(a) (Blank).

(b) (Blank).

(b-5) Any Beginning January 1, 2026, any of the following parties may file an appeal as an appellant to the State Housing Appeals Board against a non-exempt municipality if the proposed affordable housing development was denied by the municipality, or approved with conditions that in the appellant's judgment render the provision of affordable housing infeasible:

(1) the affordable housing developer of the proposed affordable housing development;

(2) a person who would be eligible to apply for residency in the proposed affordable housing development; or

(3) a housing organization whose geographic focus area includes the municipality, or county if in an unincorporated area, where the proposed affordable housing development is located; or .

(4) a service provider that is under contract to provide services for potential residents of a proposed supportive housing project or community-integrated living arrangement that otherwise meets this Act's definition of "affordable housing development".

Appeals must be filed within 45 days after the final action or decision by the municipality. The appellant must submit information regarding why the appellant believes the affordable housing development was unfairly denied or unreasonable conditions were placed upon the tentative approval of the development. In the case of local governments that are determined by the Illinois Housing Development Authority under Section 20 to be non-exempt for the first time based on the recalculation of U.S. Census Bureau data after the effective date of this amendatory Act of the 103rd General Assembly, no appellant may appeal to the State Housing Appeals Board until 6 months after a local government has been notified of its non-exempt status.

(b-6) A final action or decision of an approving authority may include, but is not limited to:

(1) voting to formally deny a proposal;

(2) denying land use approvals or entitlements necessary for the issuing of a building permit;

(3) refusing to take final legislative or administrative action;

(4) determining an application incomplete which complies with all criteria as specified by local land use codes; or

(5) rendering a proposal financially infeasible by imposing conditions or fees which are not required by local land use codes or extensive delay which causes a source of funding to expire.

(c) The Beginning on the effective date of this amendatory Act of the 98th General Assembly, the Board shall, whenever possible, render a decision on the appeal within 120 days after the appeal is filed. The Board may extend the time by which it will render a decision where circumstances outside the Board's control make it infeasible for the Board to render a decision within 120 days. In any proceeding before the Board, the local government appellant bears the burden of demonstrating by the preponderance of the evidence that:

(1) the denial, or approval with conditions, of the proposed affordable housing development is necessary to protect substantial public interests regarding health and safety; (i) has been unfairly denied or (ii) has had unreasonable conditions placed upon it by the decision of the local government.

(2) the public interests implicated clearly outweigh the need for affordable housing; and

(3) the public interests cannot be protected through reasonable modification to the affordable housing proposal.

(c-5) The Board shall take into consideration the failure to submit a compliant affordable housing plan in connection with any appeal before the Board.

(d) The Board shall dismiss any appeal if:

(i) the local government has adopted an affordable housing plan as defined in Section 25 of this Act and submitted that plan to the Illinois Housing Development Authority within the time frame required by this Act; and

(ii) the local government has implemented its affordable housing plan and has met its goal as established in its affordable housing plan as defined in Section 25 of this Act.

(e) The Board shall dismiss any appeal if the reason for denying the application or placing conditions upon the approval is a non-appealable local government requirement under Section 15 of this Act.

(f) The Board may affirm, reverse, or modify the conditions of, or add conditions to, a decision made by the approving authority. The decision of the Board constitutes an order directed to the approving authority and is binding on the local government.

(g) The Appellate Court appellate court has the exclusive jurisdiction to review decisions of the Board. Any appeal to the Appellate Court of a final ruling by the State Housing Appeals Board may be heard only in the Appellate Court for the District in which the local government involved in the appeal is located. The appellate court shall apply the "clearly erroneous" standard when reviewing such appeals. An appeal of a final ruling of the Board shall be filed within 35 days after the Board's decision and in all respects shall be in accordance with Section 3-113 of the Code of Civil Procedure.

(h) The Board shall award reasonable attorney's fees and costs of suit to the plaintiff or petitioner; however, the Board shall not award attorney's fees if it determines, under extraordinary circumstances, that awarding attorney's fees would not further the purposes of this Act.

(Source: P.A. 103-487, eff. 1-1-24.)

(310 ILCS 67/50)

Sec. 50. Housing Appeals Board.

(a) On and after the effective date of this amendatory Act of the 103rd General Assembly, the Housing Appeals Board consists of 7 members appointed by the Governor as follows:

(1) a retired circuit judge, a retired appellate judge, a current or retired administrative law judge, or a practicing or retired attorney with experience in the area of land use law or related field, who shall act as chairperson;

(2) 4 members selected from among the following categories:

(A) county or municipal zoning board of appeals members;

(B) county or municipal planning board members;

(C) a mayor or municipal council or board member;

(D) a county board member;

(3) an affordable housing developer; and

(4) an affordable housing advocate.

In addition, the Chairman of the Illinois Housing Development Authority, ex officio, shall serve as a non-voting member. At least 2 of the appointments under paragraph (2) shall be from a local government that is non-exempt under this Act.

(b) Initial terms of 4 members designated by the Governor under this amendatory Act of the 103rd General Assembly shall be for 2 years. Initial terms of 3 members designated by the Governor under this amendatory Act of the 103rd General Assembly shall be for one year. Thereafter, members shall be appointed for terms of 2 years. After a member's term expires, the member shall continue to serve until a successor is appointed. There shall be no limit to the number of terms an appointee may serve. A member shall receive no compensation for his or her services, but shall be reimbursed by the State for all reasonable expenses actually and necessarily incurred in the performance of his or her official duties. The Board shall hear all petitions for review filed under this Act and shall conduct all hearings in accordance with the rules and regulations established by the chairperson. The Illinois Housing Development Authority shall provide space and clerical and other assistance that the Board may require.

(c) (Blank).

(d) To the extent possible, any vacancies in the Housing Appeals Board shall be filled within 90 days of the vacancy.

(e) (Blank). The terms of members serving before the effective date of this amendatory Act of the 103rd General Assembly expire on the effective date of this amendatory Act of the 103rd General Assembly.

(Source: P.A. 102-175, eff. 7-29-21; 103-487, eff. 1-1-24.)

(310 ILCS 67/60)

Sec. 60. Rulemaking authority. The Illinois Housing Development Authority shall adopt other rules and regulations as needed to carry out the Board's responsibilities under this Act and to provide direction to local governments, and affordable housing developers, and other appellants. This includes, but is not limited to, rules and regulations concerning the substance of affordable housing plans as described in Section 25.

(Source: P.A. 94-303, eff. 7-21-05.)