MUNI-TIF-BLIGHTED HOMES

104th Regular Session Introduced by Chapin Rose

Allows municipalities to use TIF funds to demolish dilapidated single-family homes and rebuild, and to grant a 20-year tax abatement on the incremental value after demolition.

SB 1832 — Summary (MUNI‑TIF‑BLIGHTED HOMES)

Status: Introduced March 3, 2025; passed the Senate April 24, 2025; received in the House and referred to committees. Legislative records indicate subsequent committee consideration and later action that the bill did not ultimately advance in the House (reported as indefinitely postponed / died in committee in May–June 2025). Companion: HB 5338. Primary sponsor: Sen. Chapin Rose.

Purpose

To encourage demolition of dilapidated single‑family structures and reconstruction of new single‑family homes within municipal redevelopment/TIF areas by (1) allowing municipalities to use TIF/redevelopment project funds for demolition and site work and for rebuilding single‑family residences, and (2) permitting a 20‑year property tax abatement on the incremental value attributable to the post‑demolition/new‑construction increase in assessed value.

Key provisions

Adds a new Property Tax Code section (35 ILCS 200/18‑182) and amends the Tax Increment Allocation Redevelopment Act (65 ILCS 5/11‑74.4‑3).

Expands the definition of "redevelopment project costs" to explicitly include:

Costs to demolish buildings, site preparation, or site improvements for a dilapidated or vacant parcel zoned residential; and
Costs of reconstruction, repair, remodeling, or new construction of a single‑family residence on such parcels.

Authorizes a municipality, by ordinance or resolution adopted by a majority of its corporate authorities, to order the county clerk to abate for 20 years the portion of taxes on an “improved parcel of real property” that is attributable to the increase in current equalized assessed valuation (EAV) over the EAV immediately before demolition.

Defines “improved parcel of real property” as a parcel in a redevelopment project area where municipal redevelopment project costs were used to construct a new single‑family residence after demolition/removal of a dilapidated structure.

Requires municipalities to mail notice to each affected taxing district at least 30 days before the public hearing at which the abatement ordinance/resolution may be adopted.

Any approved abatement applies to subsequent owners of the improved parcel for the remainder of the abatement period.

Who is affected

Municipalities: may use TIF/redevelopment funds and may authorize abatements.

County clerks: implement abatement orders.

Overlapping taxing districts (school districts, counties, special districts): may see reduced property tax revenue on the incremental EAV portion for up to 20 years.

Property owners and future purchasers of redeveloped single‑family parcels: eligible for a 20‑year abatement on the incremental tax attributable to the increased EAV.

Potential impact

Creates a targeted incentive to remove blighted single‑family homes and encourage new single‑family construction within redevelopment/TIF areas.

Shifts some incremental property tax revenue away from taxing districts for up to 20 years, depending on municipal adoption of abatements.

May accelerate neighborhood rehabilitation where municipalities choose to apply both TIF funds and the abatement authority.

Bill