Rockford builders have a deadline circled on the calendar. The city's tax abatement program for new homes, which local leaders say has produced about 300 units since it started in 2024, is scheduled to end when the year does, Rockford News First reported.
The tax break applies to new homes where construction starts by the end of the year. There's a chance the Rockford City Council could extend it, the station reported, but as of now Dec. 31 is the cutoff.
The numbers
City Administrator Todd Cagnoni laid out the program's results year by year. "In 2024, this program created 131 units. In 2025, it created 161 units and so far, this year we're at about 50 units," he told Rockford News First. The units include both rentals and homes for sale.
Cagnoni said the new units built over the last three years add up to more new residential construction than the city has seen in the last ten-plus years.
He also explained why the city cares. When a community isn't adding housing, he said, it can see a lack of investment in existing homes, or prices climbing because there isn't enough supply to meet demand.
How the program works
According to the City of Rockford's program page, the rebate is open to anyone who builds a single-family home, townhome, two-family, three-family or multifamily building in the city and in the Rockford Public Schools district. Single-family homes must be owner-occupied.
The program pays a three-year property tax rebate in a single lump sum at the end of each tax year. The two taxing bodies that signed on, the city and Rockford Public Schools, represent more than 70% of the tax bill for city residents, the city says.
The city page also spells out the timeline: construction must start before Dec. 31, 2026, and be finished within 12 months.
The rebate doesn't stand alone. "We have also had a parallel program where we charge no building permit fees, or no water connection fees," Cagnoni said. The city's page says eligible projects get their building permit, plan review, inspection, water main connection and water meter connection fees waived, as long as they pull a permit before Dec. 31, 2026, start construction and keep at it until it's done.
One builder's pipeline
Local realtors told Rockford News First that Three Hammer construction has built 19 homes using the program so far, with another 32 in the works.
"If you compare to what we have on the market and available, that's a huge number," realtor Kelsey Shuckman said of the 32 homes. She said buyers moved quickly: "I think within the first day, we sold three of them."
Shuckman put a number on what buyers can save. "It's about a 70% discount and that would roughly, if you're looking at these houses and running those taxes, it's roughly about $4,000 a year and it's for three years," she said.
Realtor Lisa Carroll said a few people call every week looking specifically for new construction. "More people can afford it than they realize, especially with this tax break," she said.
Why it matters for contractors
This is a clear local example of incentives moving the needle on new housing. Rockford stacked a property tax rebate on top of waived permit, inspection and water connection fees, and the result has been steady starts for three straight years.
For builders in the Rockford area, the practical issue is timing. To qualify, a permit has to be pulled and construction started before Dec. 31, 2026, and the city's page says the home must be finished within 12 months. That could mean a rush to pour foundations before winter fully sets in. Subcontractors and suppliers should expect that push, too.
Builders planning 2027 projects in Rockford should keep an eye on the City Council. If it extends the program, the pipeline keeps going. If it doesn't, the incentives that helped make these homes pencil out will end with the year.