Demolition Tax
Northbrook
Cook County
Adopted in December 2020, Northbrook’s Demolition Tax collects funds from residential demolitions to grow the Village’s Affordable Housing Trust Fund and support future affordable housing initiatives.
Background
Northbrook developed the Demolition Tax as part of its broader Affordable Housing Plan, which was adopted in December 2020 alongside the Village’s Inclusionary Housing Ordinance (IHO). Together, these efforts aimed to expand housing opportunities for low- to middle-income households and ensure that redevelopment in the Village supported a diverse population and workforce.
With limited land available for new residential development, the Village recognized the need to preserve affordability and generate funding to address rising housing costs. Leaders anticipated that in-lieu fees from the IHO alone would not be enough to meet future affordable housing goals, prompting the creation of an additional funding mechanism.
How It Works
The Demolition Tax imposes a $10,000 fee per residential structure demolished within the Village. Funds collected are allocated entirely to Northbrook’s Affordable Housing Trust Fund. Since the program’s launch in January 2021, the Village has accrued approximately $780,000, averaging $200,000 annually.
Northbrook’s high housing values make the tax a feasible add-on to redevelopment. While officials initially anticipated resistance from developers, pushback has been minimal. Many developers active in Northbrook were already familiar with similar requirements in neighboring communities like Highland Park.
Public Involvement
Public meetings and hearings during the Affordable Housing Plan process provided opportunities for community input and helped build understanding of the policy framework, which was closely modeled on Highland Park.
Goal
Build up Northbrook’s Affordable Housing Trust Fund to support future programming.
Target
Redevelopment projects involving the demolition of residential structures.
Success
Generated $780,000 in its first three years to fund affordable housing initiatives.
Lessons Learned
Aligning policies with regional best practices can smooth implementation.
Contact Information
Village of Northbrook Development & Planning Services Department, www.northbrook.il.us
This case study was last updated in February, 2026.
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