Housing advocates and city leaders say the rise of construction costs by as much as 38%, zoning restrictions, interest rates, and not-in-my-neighborhood (NIMBY) sentiments are all part of a landscape of challenges that contributes to the local housing shortage crisis.
The League of Women Voters of McLean County forum at the Bloomington Public Library highlighted the need for regional and innovative solutions to address a complex community, regional, and frankly national problem.
Bloomington City Manager Jeff Jurgens mentioned Community Development Block grant money can not be used for new construction and there’s a possibility funds will be frozen. Jurgens points out the city has amended zoning codes to allow accessory dwelling units for residential construction. He said the city is working with the Bloomington-Normal Economic Development Council to get residential projects into enterprise zones, which allows construction materials for developments to be purchased tax free.
The City of Bloomington has also launched a new website, buildingbloomingonton.com, consolidated the development department and hired a new developer advocate to streamline the development process. Future plans include neighborhood revitalization programs and incentives such as waiving permit fees to attract developers, as well as speeding up the time it takes to get plans reviewed and permits issued – a common complaint among developers.
"To that end, we’ve had some discussion with some communities that have gone to a self-certification process. Phoenix, Arizona, is the big one where they actually will qualify design professionals who can self-certify plans and occupancy and things like that,” Jurgens emphasized.
Additionally, the city has hired a “nationally renowned” consulting company to figure out zoning regulations that are impacting development. Jurgens suggested areas of inquiry would include, ‘How can we make things easier? What do we need to do with parking?’ Jurgens said, ”We’re just trying to do whatever we can to encourage people to develop within our community.”
Historical market trends and current statistics
John Armstrong, a local realtor with more than 30 years’ experience, noted an 8.5% appreciation in residential housing in 2024, with home values increasing by 38% since 2020. Currently, there are just 90 homes on the market (as of Jan. 28), with 33 being new construction. The average home price is approaching $280,000 with 99% of homes selling at or above the asking price. “It’s a seller’s market because it is highly competitive, with buyers often waiving inspections and appraisals to secure properties, said Armstrong. “I’ve had a lot of people that would reach out to me and say, ‘My property taxes went up 20%’ and I’m like, ‘Stop complaining because your value went up 38%.”
Houses priced under $200,000 represent the scarcest inventory. “We have 30,000-plus homes, and there’s only 17 below $200,000 on the market,” Amstrong shared. “I was talking to an agent over the weekend who had an open house with 25 people and had 10 offers. It’s January. That’s not supposed to happen in the Midwest!”
For new construction, $280,000 is the least expensive new construction on the market.
“So if we think we can build our way out of this, we can’t. We’re not going to be touching all the price points,” Amstrong emphasized. “We can’t build a $150,000 house in Bloomington-Normal anymore, but we could possibly redevelop an industrial area into residential housing. That’s how we’re going to be able to hit more price points.”
The Bloomington-Normal Community Land Trust
Mark Adams, president of the Bloomington-Normal Community Land Trust explained the non-profit’s mission is to provide affordable housing through a land-trust model. A community land trust buys land and will maintain homes on long-term leases, ensuring affordable housing. A community land trust controls the resale cost of the home on the leased land and can also buy back the home.
Adams says the goal for their first year is to raise $54,000 and it’s seeking partnerships, particularly with Habitat for Humanity, to focus on rehabbing single-family homes. Three-quarters of all housing in McLean County was built before the year 2000 so a lot of homes and rental units need to be rehabbed. The non-profit plans to prioritize solar panels and community home improvement projects, using materials that make homes able to withstand different levels of disasters.
“Our vision is to create environmentally sustainable, affordable, and diverse homes through collaboration with community partners from inclusive neighborhoods, institutional change, and good stewardship and our values include resiliency, equity, and sustainability.”
Adams explained the organization is looking to serve people who are at 60 to 100% of area median income. “That’s your teachers. On your higher end, that’s definitely Rivian workers and very entry-level people who are in their 30s and 40s, trying to raise a family but simply cannot afford a home in this market, whether they’re a single parent or whether they’re on limited income or whatever their situation may be.”
Looking at a chart showing who might qualify, Adams said, “So if you’re looking at a household of three – say a single mom with two kids, she would have to make no more than $78,000.” He says that could easily represent half the people that live in Bloomington-Normal.
“Why is affordable housing important?” Adams asked. “Without affordable housing you get spikes in homelessness.” He says the vacancy rate for rental units in Bloomington-Normal is 3% and for a healthy rental market, it really should be between 5-7%.
What we’re really trying to do is revitalize our communities. This is a proven tool, and what we really want to do is look at homes, especially in west and south Bloomington, and northeast Normal that really need some help, and it may mean we get that home rehabbed to a point where it can be livable again.”
Adams invited anyone to attend a meeting March 18 to learn more about the organization’s goals and plans for the future.