When Housing Policy and Transit Funding Collide
A legislative proposal in Springfield could dramatically increase real estate transfer taxes across suburban Cook and the collar counties as lawmakers search for solutions to regional transit funding challenges.
What Do Housing Affordability, Suburban Transit, and a 600 Percent Tax Increase Have in Common?
A major legislative proposal moving through Springfield could connect all three and significantly increase the cost of buying and selling a home across parts of the Chicago region.
Illinois lawmakers are considering legislation that would dramatically increase the real estate transfer tax (RETT) in suburban Cook County and the collar counties of DuPage, Kane, Lake, McHenry, and Will. The proposal would raise the county-level transfer tax from $0.25 to $1.50 per $500 of transaction value, a 600 percent increase.
If enacted, the change would raise closing costs for both homebuyers and sellers, adding another financial hurdle at a time when housing affordability is already under pressure across Illinois. While existing municipal transfer taxes would remain unchanged, the proposed county-level tax would be layered on top, increasing the overall cost of real estate transactions.
The proposal is tied to a broader effort to stabilize regional transit funding and restructure transit governance in northeastern Illinois. Lawmakers are exploring a plan that would merge the Chicago Transit Authority (CTA), Metra, and Pace into a single regional agency known as the Northern Illinois Transit Authority (NITA).
Before moving forward with a merger, the state is attempting to address ongoing financial challenges within the transit system, particularly those facing the CTA. Despite receiving approximately $2 billion in federal COVID relief funding, the agency is still projected to face a $770 million budget shortfall.
To generate new revenue, the proposal includes increasing the real estate transfer tax in surrounding suburban counties.
According to Illinois REALTORS® research, if the higher transfer tax had been in place beginning January 1, 2025, it could have generated approximately $76 million in additional revenue. Much of that funding would likely be directed toward addressing transit system financial gaps.
However, questions remain about how the increased tax burden would affect suburban housing markets and whether suburban communities would see direct benefits in transit service, access, or infrastructure improvements.
Housing affordability remains a major challenge across the region. Policies that increase transaction costs can make it harder for first time buyers to enter the market and can add additional financial pressure for homeowners who need to move.
Housing policy, transportation investment, and regional economic growth are closely connected. As lawmakers debate potential solutions to transit funding challenges, it is important to consider the broader impacts on housing affordability, market mobility, and the cost of homeownership for Illinois residents.
As discussions continue in Springfield, the intersection of housing affordability and regional infrastructure funding will remain an important issue for communities throughout northern Illinois.
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Strong housing policy begins with clear data, thoughtful collaboration, and a shared commitment to expanding opportunity for every community.
—Neeley Erickson
Neeley Erickson is a Government Affairs Director specializing in housing policy, local governance, and community development across Illinois. Her work focuses on advancing practical solutions that expand housing opportunity and strengthen communities.