February 20, 2026
During his annual State of the State Address this week, Governor JB Pritzker announced a broad and ambitious legislative agenda focused on reducing the cost of living for Illinois residents. The centerpiece of this agenda is the Building Up Illinois Developments (BUILD) initiative, a series of bills intended to confront Illinois’ high housing costs by stimulating new housing construction.
Increasing the Housing Supply – A Common Goal Among Several States
Housing costs have increased in America by more than 50 percent since 2019 and continue to grow at a rate ahead of inflation. The key driver of high costs is a widespread housing shortage estimated to be between 2.8 and 4 million homes nationwide. In Illinois specifically, the Governor’s office cited a statewide housing shortage of 142,000 units, with an additional 83,000 units needed to meet projected housing demand in the next five years.
Recently, states across the country and the political spectrum, including Montana and California, have adopted legislation to promote increased housing density, reduce construction costs, and shorten development approval timelines. Just across the state line, the Indiana General Assembly is considering HB 1001, a bill that would allow development of duplexes and accessory dwelling units (ADUs) in any zoning district where single-family homes are permitted by right and significantly restrict minimum parking requirements local governments can impose.
An Ambitious Proposal
During Wednesday’s address, Governor Pritzker touted the BUILD agenda as key to the financial well-being of the state and its residents through expanded access to affordable housing. This agenda consists of a mixture of statewide zoning regulation, construction process standardization, and grants for housing and infrastructure construction.
Immediately after the Governor’s address, Representative Kam Buckner filed House Bill 5626, which significantly amends the Illinois Municipal Code with the goal of increasing both the amount and variety of housing construction in Illinois. To that end, HB 5626 includes the largest preemption and restriction of local zoning and land use regulatory authority considered since the establishment of home rule authority in Illinois in the 1970 Constitution. If the bill becomes law as introduced, local governments would be stripped of almost all regulatory control over residential developments with eight or fewer units.
This Elrod Friedman Alert provides a broad overview of HB 5626 as introduced on February 18, 2026.[1] We expect that this bill, and its counterparts in the Senate, will be amended as they work their way through committees. However, given the potential impact on local authority, it is important to understand the ambitious scope, scale, and potentially disruptive nature of this legislation. Elrod Friedman will provide more in-depth analysis of specific areas of the BUILD legislation in the coming days through additional alerts.
Key Elements of the Bill
With over 40 pages of new legislative text, HB 5626 significantly amends both the Illinois Municipal Code and the Counties Code to introduce new statewide standards on zoning, subdivisions, building codes, plan reviews and inspections, and impact mitigation fees.
Curtailing Local Residential Land Use Authority over Housing
HB 5626 includes numerous amendments to Article 11 of the Illinois Municipal Code governing local authority over zoning and subdivisions. The bill defines a new class of residential structures – “Middle Housing” – which encompasses multi-unit buildings with up to eight separate dwellings (including duplexes, triplexes, fourplexes, townhouses, attached courtyard housing, and stacked-flat plexes[2]) as well as “cottage clusters” of detached single-unit buildings arranged together on a single lot.
If enacted, HB 5626 would require local governments to allow the construction of Middle Housing in any district where single-family housing is allowed by right. Further, local governments would be required to apply the same zoning and subdivision standards to Middle Housing that govern single-family houses. To accomplish this goal, HB 5626 restricts almost every aspect of local land use regulation governing residentially zoned properties and imposes new statewide standards on density, parking, and bulk, height, lot size, and other traditional subdivision standards.
Density – Under HB 5626, local governments would be required to allow the construction of additional housing density in every residential zoning district where single-family homes are allowed by right. This includes:
- Allowing ADUs on any lot with an existing single-family home.
- Allowing multi-unit Middle Housing buildings to be constructed by right on any residential lot larger than 2,500 square feet, with increasing density determined by lot size.
- Prohibiting minimum lot size requirements of less than 2,500 square feet in any residential zoning district that allows single-family detached dwellings.[3]
Parking – In addition to allowing significantly higher housing density in residentially zoned districts, HB 5626 imposes strict limits on how much off-street parking a local government may require residential developers to provide. Following the precedent set by the recently adopted People Over Parking Act, the bill would also eliminate minimum off-street parking requirements for certain forms of residential development altogether.
Bulk, Height, and Lot Standards – Local governments would also be prohibited from imposing traditional zoning and lot standards for any residentially zoned property more stringent than new state mandated requirements. The statewide limits would govern setbacks, permitted height, lot coverage, floor area ratio, and building separation. Further, the bill would remove local governments’ ability to require Middle Housing projects to undergo a discretionary zoning approval process (i.e. special permits or planned developments) in locations where single-family homes are allowed by right.
Subdivisions – Under HB 5626, local governments would also be required to approve various forms of land division for Middle Housing buildings, including subdivisions, condo-alternatives, or attached-dwelling plats, to allow residents to hold fee-simple ownership of their dwelling units. The bill does not amend or refer to the Plat Act (765 ILCS 205/0.01), but the proposed instruments of division likely would be required to conform to all state laws governing subdivisions. Further, local governments will be prohibited from denying subdivisions for Middle Housing based on minimum lot-size or excessive density.
Building Code Standardization; Plan Review and Development Inspection
HB 5626 also includes significant changes to local authority over housing construction, including:
- Authorizing construction of multi-family residential buildings with a single stairway as an exit for all units so long as certain fire safety conditions are met.
- Imposing strict timelines on local plan review and inspection of residential and commercial developments. Failure to meet these deadlines will entitle permit holders to retain a private plan reviewer or inspector to complete the review or inspection. Local governments would be required to accept the conclusions of certified private plan reviewers and inspectors.
State Controlled Impact Fees
HB 5626 would also require local governments to adopt uniform formulas for calculating impact fees for schools, park districts, transportation, public safety, as well as stormwater and other public facilities. These formulas would be set by the state Department of Commerce and Economic Opportunity (DCEO). The Department would be tasked with providing communities with standardized demand multipliers, baseline capital cost tables, and model worksheets and formula templates on an annual basis. All governments desiring to impose impact fees would be required to repeal any existing impact fee ordinances and adopt a model ordinance provided by DCEO.
Practical Impacts
Every provision of HB 5626 is paired with clear home rule preemption language declaring that the state has concurrent authority to regulate on these matters. By asserting its concurrent authority to regulate, the state would allow local governments to be more permissive in their regulation of housing, but not more restrictive than the proposed uniform standards.
The text of HB 5626 does not include a specific effective date, so if adopted during the Spring legislative session, the bill would go into effect on January 1, 2027. Certain provisions of the bill would become effective immediately on that date including:
- The prohibition on minimum off-street parking standards for small residential developments and within one half mile of public transit.
- Allowing the construction of single-stair exit multi-family buildings.
Local governments, both home rule and non-home rule, would be required to amend their zoning and subdivision ordinances to incorporate minimum state standards no later than eight months after the effective date, which could be as early as August 1, 2027. In the interim, existing zoning and subdivision ordinances would remain in place and enforceable.
However, if a local government fails to amend its zoning code and subdivision ordinances by the eight-month deadline, the community will be required to disregard its own ordinances and apply the state-imposed zoning and subdivision standards.
Alarmingly, HB 5626 creates a private right of action for any person aggrieved by a local government’s failure to apply the new state standards which would allow the aggrieved person to go to court and obtain declaratory or injunctive relief and, if they prevail, be awarded attorney’s fees.
With regard to the standardization of local impact fees, DCEO would be given 18 months from the effective date of the law to create new standards and guidelines, and communities would have an additional 12 months to adopt the DCEO standards and guidelines. Until that time, communities would be allowed to continue applying their existing local impact fee ordinances and calculations.
Looking Forward
It is clear that Governor Pritzker and supporters of the BUILD agenda in the General Assembly believe that removing local regulatory barriers to the approval and construction of housing is key to solving Illinois’ affordability crisis. HB 5626 and its companion bills in the Senate constitute an ambitious initiative to make housing easier and faster to build.
However, this legislation also threatens to deprive local governments of some of their most effective and long-held tools to make local policy decisions on important land use matters, preserve community character, and protect the public health, safety, and welfare. Communities in Illinois have spent countless hours soliciting community feedback, developing comprehensive plans, and fine-tuning their zoning codes and maps and parking requirements to balance the competing needs of residents, businesses, and visitors. If adopted in its current form, HB 5626 would be the largest single change to land use regulation in Illinois in decades.
In the coming days Elrod Friedman will publish additional alerts providing a deeper dive on different aspects of the BUILD agenda summarized in this alert. We will also closely track the debates and amendments that are likely to follow.