Bill
HB 5198
Illinois HB 5198 strengthens affordable housing by requiring plans, funding tools, regional cooperation, and a formal appeals process to reduce local barriers and boost missing-mid
HB 5198 (104th Illinois General Assembly) – Summary
Overview
- Topic: Affordable housing planning and development
- Purpose: Encourage integration of affordable housing into local stock and streamline processes to prevent or remove barriers to affordable housing. Create mechanisms for planning, appeals, financing, and regional cooperation to increase supply of low- and moderate-income housing (80%–140% of area median income, i.e., “missing middle” housing).
- Status: As introduced/Engrossed version circulated in 2026 (Senate actions noted). Key elements include amendments to the Affordable Housing Planning and Appeal Act (310 ILCS 67).
Main aims
- Recognize and address a shortage of affordable, accessible, safe, and sanitary housing for workers, retirees, and low-/moderate-income households, including households with disabilities.
- Promote local government action to incorporate affordable housing into local housing stock.
- Shield affordable-housing developers from local ordinances or regulations that unduly inhibit development.
Key provisions and changes
1) Definitions and core terms (Section 15)
- Affordable housing: Housing affordable to households at or below defined income levels; for owner-occupied units, housing costs (mortgage, taxes, insurance, HOA fees) ≤ 30% of gross annual income; for rental units, rent plus utilities ≤ 30% of gross income; parking/maintenance/fees may be included if data are available from the U.S. Census.
- Affordable housing development: Housing subsidized by government or where at least 20% of units must remain affordable for at least 15 years (owner-occupied) or 30 years (rental).
- Exempt local government: Localities with a high share (defined thresholds) of affordable housing or smaller populations may be exempt from certain requirements.
- Missing middle: The focus on households earning 80%–140% of area median income.
2) Exemption determinations (Section 20)
- The Illinois Housing Development Authority (IHDA) will annually determine exempt vs. non-exempt status for local governments using:
- Share of affordable owner-occupied and rental units (80% and 60% AMI benchmarks, respectively).
- Percentage of total year-round housing units that are affordable.
- Exempt/non-exempt lists published every 5 years; local governments receive notice if non-exempt.
3) Affordable housing plans (Section 25)
- Non-exempt municipalities must adopt an affordable housing plan; previously non-exempt governments reassessing after data updates must also comply.
- Plan contents required to identify needed affordable units, land/structures suitable for development or conversion, incentives, constraints (zoning, infrastructure, fair housing issues), strategies to address constraints, and explicit goals (e.g., 15% of new development as affordable, or a 5–25% affordability share, with options to meet via intergovernmental agreements).
- Plans must include timelines (first 24 months), and progress reports; annual reporting to IHDA and a 4-year compliance report to summarize actions toward plan implementation.
- Plan submission to IHDA within 60 days of adoption; mandatory open-meetings/public-notice before adoption.
4) Local government tools and incentives (Section 25(d))
- Governments may:
- Create or participate in housing trust funds to finance production, acquisition, rental assistance, homeownership support, preservation, weatherization, emergency repairs, services, and grants/loans.
- Create community land trusts to hold land for affordable housing, including long-term leases or reacquisition rights.
- Use zoning to require affordable housing under specified authorities.
- Accept donations of money or land to address affordable housing needs.
- Intergovernmental cooperation: Non-exempt governments may form regional agreements within 10 miles to create affordable housing, with crediting rules to ensure units counted toward goals are not double-counted and that jurisdictions with high affordability thresholds are respected.
5) Appeals and enforcement (Sections 30, 50)
- State Housing Appeals Board (SHAB) role clarified; starting Jan 1, 2026, certain parties (developers, potential residents, housing organizations, and service providers for supportive housing) may appeal a municipality’s denial or onerous conditions affecting feasibility.
- Appeals must be filed within 45 days of final action; for newly non-exempt communities, a 6-month waiting period applies before appeal eligibility.
- SHAB procedures: decision timeline (generally 120 days, extendable for outside-control factors); standard of review weighs public health/safety interests vs. affordable housing needs; ability to modify or overturn local decisions; attorney’s fees may be awarded to prevailing appellants.
- If a local government adopts and implements an affordable housing plan as required, SHAB may dismiss an appeal.
6) Housing Appeals Board and rulemaking (Sections 50, 60)
- IHDA administers SHAB; Board members include local government representatives, developers, and advocates; reporting and hearings governed by board rules.
- IHDA may adopt rules to implement the Act, including details of affordable housing plans and related processes.
Impact and who is affected
- Local governments (counties and municipalities): New obligations to assess, plan, and implement affordable housing strategies; potential exposure to appeals if non-exempt or failing to comply; ability to form housing trust funds, land trusts, or enter intergovernmental agreements to meet goals.
- IHDA: Responsible for exempt determinations, oversight, data publication, and administration of SHAB.
- Affordable housing developers and service providers: New rights to appeal if proposals are denied or conditioned improperly; broader avenues to seek relief from local regulatory barriers.
- Residents and prospective residents: Increased avenues to obtain affordable housing; more predictable development timelines and potential protections from arbitrary local barriers.
- The broader market: Incentives for regional cooperation, zoning changes, and funding mechanisms to increase the supply of missing-middle housing.
Timeline and notable dates
- Exemption determinations: Beginning October 1, 2028 (and ongoing every 5 years thereafter).
- Appeals: Effective January 1, 2026 for eligible appellants; 45-day filing window after final local action.
- Reporting: Local governments must report progress on plans within 4 years of adoption/updating; IHDA to publish and report periodically.
Bottom line
HB 5198 strengthens and expands Illinois’s Affordable Housing Planning and Appeal Act by updating definitions, formalizing exemption determinations, codifying comprehensive affordable housing plans, enabling funding mechanisms (housing trusts, community land trusts), permitting intergovernmental regional collaboration, and introducing a formal appeals process through the State Housing Appeals Board to challenge zoning and development decisions that hinder affordable housing.
Compiled from official sources — confirm details with the bill’s official record.
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