Backers of Chicago real estate transfer tax hike aim to take measure to voters; money would fight homelessness

City Council allies of Mayor Brandon Johnson announced their intentions to get a real estate transfer tax hike that would fund homelessness services on the 2024 primary ballot, seeking to advance a key promise from the mayor’s progressive campaign eight months after similar efforts failed in a dramatic showdown.

The council’s housing committee met for a three-hour hearing Thursday on the yearslong drive to raise the tax on the sale of properties worth at least $1 million and use that money to address the city’s homeless crisis. The panel did not vote on the proposal, but one of its chief supporters vowed to pass City Council legislation this fall to place the question on next March’s presidential primary ballot.

“I’m sorry this has taken multiple, multiple years,” Ald. Maria Hadden, 49th, said.“This is continuing to get worse. ... I hope that we can keep the urgency going to make sure that we are not ... leaving money on the table.”

The so-called Bring Chicago Home movement was one of many bitter fronts between former Mayor Lori Lightfoot and progressives who felt betrayed when she walked back a campaign promise to enact such a tax hike for homelessness services, citing issues with the current version. Her allies no-showed a subject matter hearing on the initiative in November, scuttling the coalition’s plans to pass legislation in time to get the proposal on February’s election ballot — when Lightfoot lost her bid for a second term.

Now, with newfound power following Johnson’s victory, the City Council’s left flank nodded to what that means for their agenda.

“I want people to understand: This issue was decided in April, when the voters elected Mayor Brandon Johnson,” the City Council floor leader, Ald. Carlos Ramirez-Rosa, 35th, said during the hearing. “So this is no longer a question of if this will happen. It’s how it will happen.”

The proposal applies to higher-end properties and is often referred to as a “mansion tax” by supporters. But Ald. Nicole Lee, 11th, urged members to ensure that it would not apply to the sale of multiunit apartment buildings with affordable rentals.

“I just want to go on the record that these are some of the concerns that I have,” Lee said. “I want to make sure that we’re not inadvertently causing a reduction in naturally occurring affordable housing with this transfer.”

The city’s outgoing Department of Housing Commissioner Marisa Novara, who led Lightfoot’s efforts to revamp affordable housing and investments on the South and West sides, stressed the need has gotten worse.

“Our current funding is insufficient. But it is also insufficiently flexible,” Novara said. “We really need more funding sources that are flexible that allow us to reach the very lowest incomes, which is the bulk of our low-income population in the city. ... We need more funds to affordably house Chicagoans who desperately need it.”

An estimated 6,139 people in Chicago don’t have shelter on any given night, according to Department of Family and Support Services Commissioner Brandie Knazze. That includes 2,196 migrants, according to the city’s 2023 count of homeless Chicagoans. More than 11,000 , and 11,297 households experiencing homelessness are served by local homeless services in a year.

According to a 2020 report from Chicago Coalition for the Homeless, Chicago’s homeless population is more than 65,000, a number much higher than the city’s and U.S. Housing and Urban Development’s estimates due to differences in how the agencies define homelessness. HUD, which has estimated Chicago’s homeless population closer to 5,300, does not consider people who are temporarily staying with others to be homeless.

Ald. Daniel La Spata, 1st, said the 65,000 number is more representative of the city’s acute need, noting that during a difficult period of his life, he lived on someone else’s sofa with everything that he owned in a suitcase tucked underneath.

“In that year, I didn’t think of myself as figuratively homeless,” La Spata said. “I was literally homeless. A roof is not a home. For the tens of thousands of Chicagoans who are unstably housed, that is homelessness.”

Ald. Jessie Fuentes, 26th, said she believes Bring Chicago Home is the solution to homelessness in the city, adding that she’s met with residents of the tent encampment in her ward in Humboldt Park and found them to have diverse needs and circumstances that led them there.

”And they all deserve to be housed,” Fuentes said. “More importantly, we deserve a permanent revenue stream that makes housing a right in the City of Chicago.”

After failing to get the referendum on the Feb. 28 ballot, the Chicago Coalition for the Homeless has been pushing the City Council again to consider the tax hike, with Johnson campaigning on the promise to pass the proposal in his first 100 days in office, though that timeline is unlikely.

The activist-backed version would triple the real estate transfer tax on sales over $1 million, and services funded from that revenue would include housing and mental health services. The new rate would hike the tax from $3.75 to $13.25 for every $500. Sales under $1 million would remain at the $3.75 per $500 rate.

Novara said the city is open to a proposal that employs a smaller tax increase, in which the new tax rate would only apply to the chunk of money above $1 million, not the entire sale.

The only ways to change the rate, however, are through the Illinois General Assembly, which does not reconvene until the late fall veto session, or a citywide referendum. While aldermen Thursday announced they will opt for the latter, Johnson’s transition committee recently recommended going through the state legislature.

Inside the lobby of City Hall, more than 100 protesters from the Bring Chicago Home coalition gathered before the hearing around a large sign reading, “51st Ward,” a reference to the city’s unhoused population.

Anthony J. Perkins spoke about his experience being homeless for about a decade until he found housing in Rogers Park, his voice growing steadier as he progressed.

Perkins said his landlord eventually raised the rent by $450 in one year, sparking fears that he would be on the streets again. He eventually got the help of community organizers to find a new apartment, “But I now know so many folks are experiencing what I went through myself.”

“I had to move and had nowhere to go,” Perkins said. “This was my first apartment I got after being homeless. At that time, I was fearful of being homeless again. ... I know Bring Chicago Home will help fund greater access to affordable housing and services to help people with housing and mental health.”