Affordability has become a pervasive mantra in American politics. Both President Donald Trump and his Democratic opponents are vowing to stem the rising cost of living. Over the last few decades, while automation and trade have kept the prices of manufactured goods in check, costs have increased significantly in three sectors of the economy: healthcare, housing, and education. Young college graduates, renters, new homebuyers, and parents are particularly exposed to the latter two. They have also cross-subsidized rising healthcare costs through entitlements and employer-sponsored group health insurance pools, likely contributing in part to delayed family formation and rising political discontent.

This inflationary pattern, known as “Baumol’s Cost Disease,” has been attributed to the labor-intensive and as-of-yet automation-resistant nature of these sectors. But another factor is that all three have become increasingly regulated over the course of the last century to the point of quasi-nationalization.

This process began in housing with the replacement of market-driven land use by zoning regulation in the early and mid-20th century, upheld by the Supreme Court in Euclid v. Ambler (1926). In Houston and its environs such as The Woodlands—the metropolitan area that most resembles the pre-Euclid American model, in which land use is primarily determined by developers responding to market demand—housing costs have not significantly outpaced overall price increases over the long term, despite demand fueled by the region’s rapidly growing population. In an era of rising mortgage rates, the damage to young homebuyers from zoning restrictions has been compounded by a New Deal-era mortgage system that locks existing homeowners into their houses, even when downsizing would benefit seller, buyer, and society’s interest in promoting family formation.

In response to surging house prices and rents in Illinois, Governor JB Pritzker has proposed a suite of reforms to expand housing supply. Some, such as allowing a single staircase for mid-rise apartment buildings and streamlining approvals and developer impact fees, are welcome deregulations. However, Pritzker’s proposals also include SB 4060, which would override local zoning to allow the subdivision of all residential lots exceeding a mere 2,500 square feet into fourplexes, with up to eight townhouses or cottages authorized on lots exceeding 7,500 square feet, in addition to allowing accessory dwelling units in all residential zones.

While developers should be free to meet demand for “missing middle” housing in new greenfield and urban residential conversion projects, overriding local preferences to allow such chaotic densification would be unjust, contrary to widely held American aspirations, and not the most effective way to expand Illinois’ housing supply.

Following the rise of zoning, many Illinois neighborhoods were developed without private deed restrictions, or homeowners allowed the original covenants to lapse. Instead, homeowners have relied on the reasonable expectation that residents could control land use through local politics. Even if a strong majority of neighborhood residents desired to add deed restrictions in response to SB 4060, it may be impractical to secure unanimous consent. SB 4060 would thus exploit a classic market failure rather than represent bona fide deregulation, unjustly stripping many Illinoisans of a de facto vested property right in neighborhood self-government.

Furthermore, there is no reason to privilege “missing middle” housing through selective zoning liberalization. Unlike detached houses and apartment towers (the latter ideally designed by Lucien Lagrange or RAMSA), which reflect American ideals of yeoman frontier independence and unbounded aspiration respectively, “missing middle” housing evokes old-world constraints. Natural limits are part of the human condition, and “missing-middle” housing may appeal to downsizing retirees while freeing up land for families. However, promoting this housing class as a general solution to the affordability crisis hardly justifies overriding the local preferences of millions of Illinoisans.

There are better ways for Illinois to expand housing supply than dismantling the middle-class, single-family neighborhoods that symbolize the American Dream.

First, Illinois could follow Florida’s Live Local Act and Texas’s SB 840 in preempting commercial-only zoning. Residential and mixed-use mid-rise buildings (or high-rise towers where permitted commercial density warrants) would also be allowed by right in all commercial zones, subject to generally applicable local aesthetic guidelines. Such a reform would link the economic advantages of commercial zoning (such as sales tax revenue) with a reciprocal obligation to expand housing options for workers, with minimal disruption to existing residents.

Second, along the lines of a proposed bill in Florida, Illinois could promote new cities on unincorporated land by preempting county-level zoning and granting expedited approvals for greenfield developments of a certain size that include a minimum number of apartments or “missing middle” units. In the long term, these developments could form the nucleus of growing edge cities like Indiana’s Carmel or Ohio’s New Albany.

To facilitate such projects, Illinois could turn to the “land readjustment” model used in Japan, Israel, and Germany. Under one variant, a supermajority of landowners could petition to form a special district empowered to use eminent domain for large projects, as upheld by the Supreme Court in Kelo v. New London, a decision President Trump has praised for promoting growth by overcoming the holdout problem. Developers could secure supermajority consent by offering existing landowners a significant premium over fair market value and a right of first refusal in the new development. Such a system could paradoxically use the Kelo holding to enable landowners rather than politicians to guide development and unlock the full potential of their property.

Finally, Illinois could reform its municipal finance system to reward housing-friendly localities. Restrictive zoning can create negative externalities for neighboring jurisdictions: if every locality attempts to maintain exclusivity by artificially inflating house prices, the result is a similar geographic clustering of socioeconomic groups but with a lower standard of living for everyone, a classic prisoner’s dilemma. And when a locality makes housing unaffordable, it impedes the talent agglomeration that underlies Chicago’s status as a national and global business hub. Therefore, the state should incentivize localities to adopt more flexible land-use policies without vitiating local self-government as SB 4060 would.

At present, one-fifth of Illinois’s 6.25% statewide sales tax is remitted to the city and county where the sale takes place. It would make more sense to distribute these funds based on population, tied to cooperation in meeting the state’s housing goals. Localities where housing is already affordable should be automatically eligible, as should cities that adopt state-recommended zoning reforms; for others, disbursements should be linked to progress toward a net housing unit growth target of, say, 10% over a decade, including through greenfield “sprawl.”

This could foster a cross-partisan coalition of affordable rural areas, low-income towns, expanding exurbs, and urban YIMBYs. Ideally, this system would incentivize Chicago and other cities to follow Austin’s successful full-spectrum zoning reforms that have kept rents in check even as its population has boomed.

Policies beyond zoning matter too. Reversing the erosion of law and order in Chicago over the past decade, aggravated by former Cook County State’s Attorney Kim Foxx’s soft-on-crime prosecutorial policies and the SAFE-T Act’s abolition of cash bail, could foster the rehabilitation of the city’s underutilized historic housing stock. Expanding rather than gutting the state’s school choice programs could also enable more families to remain in the city and take advantage of its comparatively flexible approach to density.

Illinois Republicans may be tempted to exploit SB 4060’s overreach to claw back some of the party’s suburban losses and leave it at that. However, Pritzker’s plans are a flawed response to a real problem. A market-based housing reform plan along the lines outlined above could expand opportunity for young people and blue-collar workers, contribute to the state’s beautification and economic revitalization, and provide a blueprint for a nationwide conservative affordability agenda.