Chicagoans are gearing up for a pivotal decision in Tuesday’s primary election, where they’ll cast their votes on a proposal to increase taxes on real estate transactions exceeding $1 million. The aim? To generate funds aimed at tackling the city’s pressing issues of affordable housing and homelessness.
Under the proposed ballot measure, property transfer taxes for the majority of Chicago residents would see a decrease, dropping to $3 for every $500 of a transfer price under $1 million, as opposed to the current flat rate of $3.75.
However, the plan introduces new tax brackets for the upper echelons of the property market. This includes imposing a tax rate of $10 for every $500 of the transfer price between $1 million and $1.5 million, and $15 for anything beyond that, affecting high-value properties like office buildings that dominate Chicago’s skyline.
Advocates of the “Bring Chicago Home” initiative, predominantly led by Democrats in the City Council, project an additional annual revenue of $100 million, specifically earmarked for homelessness services.
According to Carlos Ramirez Rose, the alderman for Chicago’s 35th ward, this adjustment brings Chicago in alignment with other major U.S. cities like San Francisco and Philadelphia. He dismisses concerns, stating, “This is not a big scary change,” attributing much of the apprehension to misinformation spread by wealthy entities.
The council highlights that approximately 93% of home purchases in Chicago fall below the $1 million threshold, thus benefiting from reduced tax bills under the proposed changes.
Nevertheless, opposition surfaces from landlords and managers of pricier properties, including the Building Owners and Managers Association of Chicago. They argue that such measures could impede efforts to rejuvenate downtown office towers, already grappling with tenant retention post-COVID-19.
Echoing a trend in many American cities, lower- and middle-income Chicagoans face mounting challenges posed by escalating rents and property prices. Illinois law mandates voter approval for any property tax modifications.
A recent report by the Chicago Coalition for the Homeless underscores the urgency, revealing that over 68,000 Chicagoans experienced homelessness at some point in 2021. The coalition stands in support of the proposed tax adjustment as a step towards addressing this crisis.
