By Paul Vallas

June 12^th, 2026

The best way to achieve rent stabilization in Chicago is to cap property tax increases and remove all obstacles to expanding available housing. Any gimmick, however disguised to impose rent control, will worsen Chicago’s affordable housing crisis, and that includes the mayor’s sweeping overhaul of city rules governing renting and landlords. That is exactly what the mayor and his drafters have disguised with Johnson’s so-called overhaul. It will only worsen the affordability problem as it drives landlords to give up their property and discourage new multi-family housing investment.

The mayor finds villains and scapegoats to blame for every inherited challenge and every problem he has failed to address. His new target is landlords, whom he blames for higher rents. Never mind the impact on rents and homeownership from property taxes that rise significantly every year including more than $700 million last year alone and the tax burden being shifted dramatically from commercial to residential property.

Some neighborhoods saw massive spikes on residential property, such as West Garfield Park (133% increase) and North Lawndale (99% increase).

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. His proposed overhaul of city rules on rental property is intended to make landlords his latest scapegoat.

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 and causing over 75 percent of low-income households to be cost-burdened, spending more than 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.

Mayor Johnson Has No Real Affordable Housing Strategy

Mayor Johnson has consistently claimed massive investments in affordable housing. The mayor, claimed 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 the end of 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.

The mayor has periodically announced, with much fanfare, investments that created a fraction of the new units needed at a taxpayer subsidy that has skyrocketed. The city’s substitution of massive developer subsidies for a comprehensive affordable housing approach has seen the cost to build new city-funded affordable housing surge, rising from an average of $400,000 to nearly $750,000 per unit since 2019.

Besides his tough talk on landlords, the mayor’s other recent PR gambit is to spend $21 million providing low-income families up to $70,000 in assistance to buy a new home. This will assist a paltry 300 to 400 homebuyers. The less-than-38-percent debt-to-income ratio needed to qualify for a grant will leave few Black Chicago residents eligible, in contrast to newly arrived migrants. The selection of an affiliate of The Resurrection Project, a community-based organization prioritizing migrant services. By sheer numbers migrants have received priority over city residents in housing.

It’s ironic that while a few hundred residents will benefit from the mayor’s new grant program, over 2,000 homeowners, disproportionately poor Black households, lost their homes and more than $190 million in equity over the last ten years through Cook County tax sales. Homeowners continued to lose all their equity until a 2023 U.S. Supreme Court ruling and a more recent federal court ruling forced the legislature to make changes. Strikingly, half of the homeowners who lost deeds and equity initially owed just $1,600 or less in property taxes.

The administration’s numbers simply don’t add up. Spending hundreds of thousands of dollars in subsidies per affordable housing unit and awarding large grants to low-income homebuyers will benefit only a few hundred residents and is financially unsustainable. Chicago needs a cohesive plan that expands available housing by fully unleashing and incentivizing the market while protecting residents from gentrification through property tax stability. So, what specifically is required?

1.) Remove the 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 report 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 programs. Another quarter of those considered completed simply put forms online, accepted digital signatures, or launched software portals.

Critical to addressing the affordable housing crisis is expediting permitting. 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, more than 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 dwelling 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 not only relax restrictions but also expedite permitting. More than 40 percent of the city’s land is zoned exclusively for single-family homes.

2.) Restoring Vacant and Abandoned Properties

The U.S. Census Bureau’s American Community Survey (ACS) frequently cites figures showing around 121,000 to 129,000 vacant housing units in Chicago, about 10 percent of total housing stock. Almost two-thirds of these units are considered long-term vacancies, vacant for reasons such as ongoing renovations, family circumstances, 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 rehabilitation grants and temporary property tax abatements until restored 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 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 supporting an array of community-based affordable housing projects, ensuring a long-term return that can be used to finance future projects.

3.) Fully Leverage Federal Incentives

The recent expansion of the federal Low-Income Housing Tax Credit (LIHTC) — part of the July 4 “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.

Chicago should harness the power of federal Opportunity Zones (OZs) created in 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, are 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 more than $100 billion in private capital was invested through Qualified Opportunity Funds (QOFs) between 2022 and 2025. The program, aimed at encouraging investment in distressed communities, has largely favored real estate projects, with studies noting a concentration in urban areas already experiencing growth. Chicago, however, failed to benefit due to political hesitation to associate any initiative with Trump.

4.) Cap 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 during the same period, while TIF property tax captures skyrocketed 266 percent, from $370 million to $1.4 billion annually. Despite Mayor Johnson’s claim that he is holding the line on property taxes, the combination of school board levy increases and loopholes allowed the district to raise $700 million last year, according to a recent University of Chicago and Civic Federation analysis.

Meanwhile, as commercial property values have fallen dramatically — particularly downtown — the tax burden has shifted significantly, increasing property taxes on residential homeowners and landlords. 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 tax base.

Accelerating development risks heightening gentrification pressures, forcing senior citizens, families on fixed incomes, and low-income families in general out of their homes, often with few affordable alternatives. It also frequently places significant pressure on small neighborhood businesses. A cap on annual property tax increases for individual parcels would address the gentrification issue by ensuring that long-term residents, as well as small businesses, are not displaced by large, gentrification-driven property tax increases.

Mayor Johnson’s housing policy is deceptive and wholly insufficient. His attack on landlords is his latest attempt to cast blame for his policy failings. Real progress will come only through market-friendly reforms, streamlined regulation, intelligent use of existing resources, and taking a break from politics long enough to take advantage of federal incentives made available by the Trump administration. It will also require placing limits on property tax increases on individual residential and commercial properties when no improvements have been made.

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Paul Vallas formerly ran the public school systems in Chicago, Philadelphia and the Louisiana Recovery School District. He was a candidate for Mayor of Chicago.