Illinois rental assistance program sees funding cut for 2026 budget in another blow to state, city housing programs

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2 days ago

William Dalton had never faced eviction until a series of bad events struck last year: His mom died, his relationship with the mother of his now 5-year-old daughter ended and his car was totaled.
He fell behind on the rent for his two-bedroom apartment in the New City neighborhood. It caused him 'anxiety every day,' he said, after receiving the eviction notice a couple of months later. He didn't know where he would go if he lost his apartment, the home where his daughter was born.
'It was a lot on me,' Dalton said, who works in education. 'It is very hard to concentrate on things you need to get done, especially when you have a little one depending on you.'
In a move that has brought him 'great relief,' Dalton was able to keep the roof over his head, where he has lived for five years, thanks to $10,000 from Illinois' rental assistance program.
'Once everything was settled, it was like I could actually start living life again,' he said. 'And it is very important for my daughter to see. I tried my best to mask it, but I'm pretty sure she picked up on it.'
After its inaugural year as a state-funded effort, Illinois' court-based rental assistance program for tenants like Dalton struggling to pay rent and their landlords will stop accepting applications Friday and will see a third of its funds wiped away in the 2026 fiscal year that begins July 1. The reduction comes after the state grappled with serious fiscal challenges when balancing its budget this year, issues exacerbated by a federal government focused on axing spending. State lawmakers cut spending in various areas beyond housing as well.
Dalton is one of 7,129 renters who has received assistance this fiscal year from the state program. The state housing authority's goal was to assist 8,900 households through the new program but will likely see closer to 8,000 households supported, said Illinois Housing Development Authority Executive Director Kristin Faust in an interview with the Tribune. The state agency administers the rental assistance program. Faust said the 8,900 number was based on an authority projection.
'We had hoped it would take us to the very end of the fiscal year because we always want to be able to meet all the need,' Faust said. 'The need was even greater than we expected.'
So far, Faust said about $58 million in aid has been distributed to tenants and landlords, with thousands more applications yet to be processed and a small portion of the funds kept for administrative fees.
The state program was previously funded by federal aid distributed during the COVID-19 pandemic and focused on helping tenants experiencing COVID-19-related hardships and at risk of eviction. At its height, the program provided up to $25,000 in rental assistance to cover up to 15 months of past-due rent and up to three months of future rent.
Rental assistance programs became widespread during the pandemic to aid the millions of renters who were struggling to pay their rent on time across the country after many lost their jobs and got sick.
Illinois allocated $75 million in state funding to continue to provide rental assistance to tenants and their landlords for fiscal year 2025. Unlike many other states and municipalities, Illinois made a significant allocation of dollars to continue the program. For fiscal year 2026, the state has appropriated $50 million. The next iteration of the program is expected to begin accepting applications in August, Faust said.
'We think it is overall a positive sign that the state in a difficult budget climate is continuing to invest in the program,' said Bob Glaves, executive director of the Chicago Bar Foundation, which manages the state eviction diversion program.
Faust agreed, calling the program 'a very positive lesson learned out of COVID.'
The court-based rental assistance program is just one aspect of the state's eviction diversion program, known formally as the Early Resolution Program. Tenants and small landlords can also receive legal aid to help settle eviction cases before they go to trial.
Under the state-funded rental assistance program for the 2025 fiscal year, households facing eviction can receive up to $15,000 in rental assistance, which can pay past-due rent, up to $500 in court costs and up to two months of future rent, according to the state housing authority. Next fiscal year's program will see the maximum amount of aid reduced to $10,000, with a raise to $700 for eligible court costs coverage. Faust said this decision was made based on data from this year's program and conversations with legal aid, tenants and landlords. The authority estimates about 6,500 households will be able to receive assistance.
'We are feeling that we will be able to meet the majority of needs with this new dollar amount,' Faust said, 'and then also try to keep the program going for as long as possible for the next fiscal year.'
Some of the data considered was the average amount of assistance doled out so far this fiscal year, which has been around $8,260, or eight months of rent. And 39% of aided households are extremely low income, earning less than $36,000 a year for a household of four, the state said.
Eligible tenants have to make 80% or less of the area median income and do not have to be facing a COVID-19-related hardship. For a household of four, the area median income for much of the last fiscal year in Chicago was $89,700, according to the Chicago Department of Housing. For the next round of assistance, the state said tenants will be ineligible if they have received aid in the last 18 months. Renters do not have to prove their citizenship status and must have an active eviction case due to nonpayment of rent to qualify. Housing providers are not allowed to evict tenants during the grant's coverage period for nonpayment of rent.
And for tenants whose landlords are unwilling to participate in the program, the state offers up to two months of future rent payments to help them find a new place to live. Renters in Chicago and Cook County maintain the right to stay in their homes if they pay their debts in full to their landlord at any time before an official eviction order is filed.
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There will be less money available for those in need of rental assistance, but Chicago's rent prices are showing no signs of easing. In May, rents in Chicago increased 2% compared to .4% nationally, which was the second fastest month-over-month rent growth of the nation's largest 100 cities, according to Apartment List. The city's year-over-year rent growth stands at 5%, landing it in fourth place for fastest growth among the nation's largest 100 cities.
The rental assistance program dollars are a piece of the state's roughly $263.7 million Home Illinois budget — an initiative aimed at preventing and ending homelessness — for the coming fiscal year. The Home Illinois budget saw an overall decrease in its pot of funds of approximately $26.6 million, according to state budget documents. The same documents show that the Home Illinois funds were significantly underused in the 2024 fiscal year, but the Illinois Department of Human Services said this is because it was a 'start-up' year for multiple programs.
There are also separate rental assistance dollars allocated to other state programs, the state said, with $89.5 million total (including the $50 million court-based program) earmarked to support those efforts this coming fiscal year. For the 2025 fiscal year, the number spent is estimated at $130 million.
The reduction in funds this coming fiscal year hit as area housing groups who rely on city, state and federal dollars are already struggling to provide subsidized housing to some of the lowest income residents in the state as they are facing multimillion dollar budget shortfalls.
Gov. JB Pritzker highlighted housing affordability as a key issue in his State of the State speech in February. Still, some of the most ambitious proposals that legislators introduced on the topic didn't pass out of the General Assembly.
Bob Palmer, policy director for Housing Action Illinois, a group advocating for an increase in affordable housing in the state, said that while he is thankful to see the state committing serious dollars to Home Illinois even in challenging budget times, the government has to find a way to increase funding for the initiative every year if it wants to accomplish the initiative's goal.
'Ending homelessness and making sure everyone has a safe and decent place to live should be one of the highest priorities, and the budget that passed doesn't reflect that,' Palmer said.
Through April of this year, about 8,280 residential evictions were filed, according to the most recently available data from the Circuit Court of Cook County.
Eviction filings in Cook County have been at pre-pandemic levels since 2022. Enforced evictions — those carried out by the sheriff's office under a court order — at residential rental properties caught up to 2019 levels for the first year in 2023.
Most evictions in the city typically take place on the South and West sides in majority Black and Latino communities, trends that line up with national data showing racial minorities are more likely to face eviction. The pandemic disproportionately affected racial minorities, who were more likely to experience hardships such as job loss and illness.
Landlords and their attorneys have said that sometimes rental assistance ends up being a Band-Aid fix, with housing providers having to evict their residents even after they have received aid.
As an owner of five buildings with a total of 17 apartments, primarily in Washington Park, Gene Lee has received rental assistance for two tenants when the program was federally funded. In those cases, Lee said the renters had worked for Chicago Public Schools and their work hours were cut during the pandemic. For tenants who are communicative and experiencing short-term financial hardships such as those two CPS workers, the rental assistance program is effective, Lee said.
Now, as the program faces a funding cut and rising rent costs are eating into households' budgets, Lee said housing providers like himself will be put in a tough position if there is not enough assistance available for some tenants in need.
'If those (rental assistance) resources become a little bit limited, it puts pressure on us,' said Lee, who runs TLG Development and works at LinkedIn. 'Do we make an economic decision to try to evict this tenant and find someone else, or do you try to have a heart for someone who just needs a place and falls on hard times?'
To apply for the Illinois Court-Based Rental Assistance Program, go to https://www.illinoishousinghelp.org/cbrap.
Tribune reporter Olivia Olander contributed.
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