Years after a measure to raise a tax on property sales above $1 million to fund homeless services failed to gain traction, Mayor Brandon Johnson’s aldermanic allies introduced an updated version of the plan Thursday with hopes that momentum from the new mayor’s electoral victory this year will help secure its passage.
The “Bring Chicago Home” resolution was one of Johnson’s hallmark campaign promises and a key plank of his 100-day agenda. Championed by a coalition of housing advocates who say the city’s homelessness crisis needs immediate action, the measure ran into a false start four years ago when Johnson’s predecessor, Lori Lightfoot, who had supported Bring Chicago Home, grew reluctant after assuming office.
Sponsors of the latest resolution — progressive Aldermen Maria Hadden, 49th, Matt Martin, 47th, and Carlos Ramirez-Rosa, 35th — said Thursday that with a homeless population unlikely to find relief without more help soon, the time to act is now.
“The resolution that we are submitting today has been hard-fought and hard-compromised,” Hadden said. “It is a good plan. It’s going to get us the money that we need, and it’s going to not burden everyday Chicagoans.”
In a post-council news conference, Johnson paid tribute to his late brother in pushing for passage of Bring Chicago Home.
“This is very, very, very much personal for all of us up here today,” the mayor said after inviting a woman who has been homeless in Chicago to speak. “And as many of you all know, my older brother Leon, this was years ago because of untreated trauma, died addicted and unhoused. And so the time to act is now. The time to act is now.”
The original proposal, which would have tripled the real estate transfer tax on all real estate sales over $1 million, was steadfastly opposed by businesses and landlord groups, the latter of which cited potential hardships for property owners of smaller multifamily buildings.
Johnson’s team this summer hammered out a new version that offers a tiered tax rate system designed to hit the most expensive properties hardest. The measure applies to all sales of homes, commercial and apartment buildings in Chicago, though it decreases the tax rate on buildings priced below $1 million and increases it on those above that threshold.
The mayor’s team has estimated the updated plan is expected to rake in more than $100 million in revenue per year, based on the current real estate market. That’s down from the Bring Chicago Home coalition’s projection of $160 million under the original proposal.
Despite the changes, many real estate interests still oppose the measure.
Miguel Chacon, a landlord and real estate broker for small-to-midsize property owners in Pilsen, called the ordinance “terrible” and said “it will hurt renters more than anyone else,” as property owners will have to pass on added costs to tenants.
“I don’t understand how politicians think this is a good idea,” said Chacon, who is also a member of the Neighborhood Building Owners Alliance. “It just goes to the opposite of trying to avoid homelessness when you’re raising the rents for all renters across the city.”
Still, Johnson’s election in April has added new fuel to the Bring Chicago Home effort and his progressive movement in general, his supporters said. They added that tensions over whether the burgeoning population of migrants coming to Chicago since August 2022 are taking up resources have highlighted a need for more social services as a whole.
Chicago Coalition for the Homeless has counted 68,440 people experiencing homelessness in 2021, an increase of nearly 3,000 people from the previous year, according to the group’s most recent estimates. The research shows shifts in the way people experienced homelessness, noting 7,985 more people were staying on the street or in shelters as opposed to those temporarily staying with others, compared with 2020 data.
April Harris, a member of Chicago Coalition for the Homeless, said at a rally Thursday before the measure was being introduced that she and her family were homeless three times before finding stable housing.
“We need a dedicated revenue stream” to “help thousands of people,” as the numbers of people experiencing homelessness keep rising, Harris said.
Behind her, the crowd chanted, “Hey hey, ho ho, it’s time to Bring Chicago Home,” and “68K need a place to stay,” a reference to the Chicago homelessness estimates.
The only ways to change the city’s real estate transfer tax rate are either through the Illinois General Assembly, which isn’t reconvening until the fall veto session, or through a citywide referendum. Johnson and his allies have decided to try the referendum route, with a timeline of passing the resolution through the City Council next month and placing the referendum question on the March primary ballot. The deadline to get the resolution on that ballot is Jan. 2.
Currently, there is a 0.75% flat tax on all property sales in Chicago, or $3.75 per $500 of the sale price.
The previous Bring Chicago Home proposal called for two levy tiers: keeping the 0.75% on property sales below $1 million, and hiking it to 2.65% on properties above $1 million.
But under the new proposal, the Johnson administration hopes to break property sales into three categories — properties under $1 million, those properties valued between $1 million and $1.5 million and those properties valued above $1.5 million.
The plan would implement a “marginal structure,” which means only the additional dollars above a bracket are subject to the higher tax rate. So an owner of a property just one dollar above $1 million would not pay a drastically higher levy than an owner of a $999,999 property, for example.
For properties below $1 million, owners would actually see their transfer taxes go down by 20%, as the rate would decrease to 0.6%.
Buildings selling between $1 million to $1.5 million would have taxes for that portion of the sale price go up to 2%, or a 167% increase. Finally, transfer taxes on properties above $1.5 million would triple to 3% for the part of the sale above that threshold.
But Michael Mini, executive vice president of the Chicagoland Apartment Association, said such a proposal could end up backfiring for advocates by stymieing the growth of affordable and market-rate housing.
“The proposed real estate transfer tax will jeopardize investment in the city, increasing transaction costs, decreasing funds available for renovations, reducing return on investment, and will lead to apartment developers to do business elsewhere,” Mini wrote in a statement. “Chicago taxpayers deserve a better strategy that encourages investment, creates jobs and grows our tax base.”
Bring Chicago Home advocates attempted to get the question before voters on the Feb. 28 ballot, but their efforts failed after months of stonewalling from Lightfoot and her allies, who said their proposal was flawed. At the time, Hadden said supporters were “out of runway,” but she and others said the campaign is ready to win the battle this time.
“As long as City Council can do the right thing — pass this resolution, put the question to the voters — when we win and come back to council, we are going to be able to provide a solution for homelessness and for neighbors experiencing homelessness within a year,” Hadden said.
Also Thursday, South Side Aldermen Desmon Yancy, 5th, and Jeanette Taylor, 20th, introduced a new housing preservation ordinance to protect South Shore renters and homeowners from what they said is incoming displacement tied to the Obama Presidential Center in Jackson Park. Yancy said he wants to pass the legislation by the end of the year.
After the council meeting, the mayor said he supports the spirit of a community benefits agreement but wanted more time to review the legislation to best support longtime residents who “should have a right to remain there,” he said.
The mayor’s team also introduced another piece of legislation Thursday tied to his 100-day agenda, this time on the campaign to reopen the mental health clinics shuttered by former Mayor Rahm Emanuel and provide a citywide nonpolice response to mental health crises.
Dubbed Treatment Not Trauma, the ordinance would create a “working group” to suggest a “framework and road map” on how the city can go about those goals, which Johnson has recently cautioned will take more time than one budget cycle to accomplish.
Chicago Tribune’s Gregory Royal Pratt contributed.
