Published on February 23, 2026 2:43 pm
Last Updated on February 23, 2026 2:43 pm
Effingham Mayor Mike Schutzbach has released a statement on housing and what the City is doing to address the issue. Here is the Mayor’s report:
“I want to take a few minutes to talk about something that is on many of our community members’ minds — housing.
Over the past few years, communities across the country have felt the pressure of a housing shortage, and here in Effingham, we are no different. City officials know how important it is for our residents to have good places to live and for developers to have real opportunities to build here. The housing shortage didn’t happen overnight. It has been shaped by many factors including historic underinvestment, rising demand, the cost of building materials and interest rates, lack of building sites, high labor costs, to identify a few.
So, what are we doing about it?
First, the City applied for funds and hired a consultant who created the Effingham Housing and Economic Recovery Plan which was funded by the Research in Illinois to Spur Economic Recovery (RISE) Grant through the State of Illinois’ Department of Commerce and Economic Opportunity (DCEO). The purpose of this grant was to help local governments and economic development organizations in creating or updating economic housing plans focused on promoting economic recovery from the COVID-19 pandemic and beyond.
Additionally, the City partnered with the Illinois Housing Development Authority and conducted a full housing stock survey that inventoried every house and land parcel, accounting for quality and quantity of each parcel within our city limits. That lengthy stock survey helps us understand where improvements are needed and where growth makes the most sense.
Our Comprehensive Plan includes these studies, the IHDA – (City of Effingham Community Revitalization Plan) and the RISE Grant which paid for the Effingham Housing and Recovery Plan.
The City is very aware of the City’s housing situation — we are planning.
We are also working closely with landowners and developers to encourage new housing within city limits. New construction is essential if we are going to meet today’s demand.
To help make projects feasible, the City offers incentive programs designed to reduce development costs. In 2023, City staff led a significant effort to expand the Effingham Enterprise Zone program to include residential construction incentives. This required extensive coordination and negotiation with local taxing bodies to secure agreements that support new housing while protecting community resources.
As a result, new single-family homes located within the Enterprise Zone receive a five-year property tax abatement, and new multi-family housing receives a three-year tax abatement. In addition, building materials are exempt from sales tax.
City staff has also worked closely with the Illinois Department of Commerce and Economic Opportunity to complete the approvals needed to bring four new subdivisions into the Enterprise Zone, creating more than 120 buildable lots for future housing.
In addition to The Enterprise Zone, the City continues to offer existing Tax Increment Finance Districts (TIF) incentives that includes a program for the historic downtown and southtown rehab and restoration areas, along with a newly approved housing component formed for the City’s southside. These districts can receive reimbursement for rehabilitation and demolition costs — 25 percent, up to $25,000 — along with other tax incentives. These TIF District programs continue to be utilized by our business community and residential communities.
We have also taken steps to provide relief more broadly. The City recently eliminated the City’s portion of property taxes by reducing its property tax levy from $4.38 million to just $13,000 — a significant reduction aimed at easing the burden on all City property taxpayers.
New housing and subdivision annexations don’t just help one group — they create a ripple effect. When new homes are built, current homeowners have the opportunity to move up, which opens homes for first-time buyers and renters. That movement strengthens the entire housing market.
According to our annual housing report, residential development is active — and we are committed to keeping that momentum going. In 2025, 72 dwelling units, including single-family and multi-family, were constructed in the Enterprise Zone. The City recently received a $373,500 grant through the Department of Commerce and Economic Opportunity (DCEO) to purchase 2.68 acres on Heritage Avenue. Developer proposals are due this month, and the project is expected to bring 15 to 17 new units.
We are also currently working with two developers on projects that are anticipated to add another 55 units. Also, there are individuals building homes within existing subdivisions — something we are always glad to see.
The lack of housing is multifaceted requiring comprehensive solutions, including increased investment in workforce housing, reforming tax policies, and addressing the barriers to new construction. Without significant action, the disparity between those who can afford housing and those who cannot is likely to worsen, impacting communities and economies alike.
Everything we are doing is guided by the goals and standards laid out in our City’s Comprehensive Plan. The City’s actions are strategic, thoughtful, and proactive because housing availability matters to families, to businesses, and to the future of Effingham.
We know there is more work to do, and your city government is working hard every day to create opportunities for growth and to ensure Effingham remains a place our citizens are proud to call home.”
