Govt. Affairs Newsletter Article
By: Peter Tremulis, SSHBA Govt. Affairs Chair
Congratulations, our home building industry in Illinois has survived another year of decreasing population (most population lost in the country before West Virginia), the 48th poorest state fiscal condition in the Nation and our slow growth homebuilding industry as a result. What do we, as homebuilding industry participants, do about it?
A good place to start is to understand how we got here and what needs to change to produce a better result for our families here in Illinois. How we got here is a complicated question to answer. There are many factors that affect the business climate in Illinois, some are market related and some are policy related. They may seem like two unrelated issues, but in reality, market conditions are a result of public policy at the Global, National, State and local level. Illinois competes for jobs against other state economies, people follow jobs and housing follows people. The choice to own a home or rent an apartment is also directly affected by the costs of home ownership, chief among them, real estate taxes. Did you know that Illinois has the highest property tax rates (2.25%) in the nation with the exception of New Jersey at (2.29%)? Illinois not only has the one of the highest property taxes nationally, but also has a combination of other tax mechanisms that places Illinois as the 5th highest total tax burden state in the nation at 11%, not including your federal taxes.
Are there other factors that affect the cost of home ownership in Illinois? Yes, Illinois also has one of the most liberal Impact Fee laws in the nation that allows local taxing districts to charge up-front fees that in total can equate to as much as $30,000 per home prior to issuance of a building permit for a home with a market value of $350,000. This hidden tax does not include a Transfer Tax charged by many taxing districts that can be as much as 1% of market value payable at the time the builder sells this home to his customer. These hidden taxes likely put Illinois in the unenviable position of the having the worst total tax burden on new home purchasers in the nation. No wonder we are having such a prolonged housing recession here in Illinois!
So what do we do about it? SSHBA has a Governmental Affairs Committee eager to help address the issues surrounding our stifling homebuilding business climate. Governmental Affairs needs everyone in SSHBA to actively participate in the Governmental Affairs Committee to ensure sure we have the people power to launch a sustained campaign to change the local and state policies here in Illinois. This includes taking action on local, state and federal elections candidates. Get involved and come to our next Governmental Affairs Committee meeting scheduled for February 2nd at our SSHBA HQ office. Lunch will be served. Please RSVP to Shannon or Kate so we know we can count on your participation going forward!