Dive Brief:

• Illinois legislators are considering a 6.25% tax on home repair and maintenance services. The bill is an amendment to Senate Bill 9, free-market nonprofit think tank Illinois Policy reported, which includes a host of other taxes, including on manicures and movie streaming.

• Building pros in the state have voiced their opposition to the new tax, saying it could decrease investment in homes, result in a loss of $47 million from the industry, and impact more than 500 jobs, according to Rock Island Today. Fewer improvements could also decrease property values.

• In response to the measure, one builder wrote in the Peoria (IL) JournalStar that incentives, not taxes, would be a better way to increase production in the industry.  

Dive Insight:

Despite Illinois’ challenges, including a two-year-long budget deadlock and the country’s lowest credit rating, construction is still strong in the state. Chicago is driving the boom: As of January, it was second only to Seattle in the number of tower cranes, and is experiencing an influx of new companies that are driving demand for both office and residential space.

Still, forecasts solely looking at the housing industry predicted that growth in Chicago’s housing market would be the slowest among the top 100 major U.S. metros this year.

Illinois homeowners are facing challenges, with nearly 17% of homes seriously underwater in 2016 (owing at least 25% more than the home is currently worth) at the end of last year, compared to roughly 10% nationwide.

The proposed tax on home improvement work could impact vulnerable homeowners the most, builder Dean Graven wrote in a letter to the Springfield (IL) State Journal-Register, including the elderly and low-income families.