Chicago Voters Deny Tax Change for Homeless Programs

TL/DR –

Chicago voters have rejected a proposed increase to the city’s transfer tax on high-value properties, a measure that Mayor Brandon Johnson and progressive Democrats hoped would generate revenue to address homelessness. The referendum sought to raise transfer taxes on properties selling for more than $1 million while lowering the rate on properties selling for less, with supporters arguing it would help the city’s most vulnerable residents. However, critics, including real estate groups and some city council members, warned that the measure would adversely affect the downtown office market and the local economy.

Chicago Transfer Tax Increase for High-Value Properties Rejected by Voters

Chicago’s proposed increase to the real estate transfer tax on high-value properties has been rejected in a recent referendum, according to< a href="https://www.nytimes.com/2023/04/04/us/elections/chicago-mayor-election-brandon-johnson.html">The Associated Press. This is a setback for Mayor Brandon Johnson and the progressive Democrats who hoped to use the additional income to combat homelessness in Chicago, the third-largest city in the US.

Final results emerged after days of counting, including mail-in votes not reported on Election Day. Real estate groups had voiced concerns that the increased rates would have further destabilized the downtown office market, already reeling from high vacancy rates.

Implications for the Progressive Movement and the Fight Against Homelessness

Chicago’s political landscape is heavily Democrat, and the result of this vote raises questions about the influence of the city’s progressive movement, spearheaded by Mayor Johnson. “Yes, it is a loss for Mayor Johnson and is a loss for the progressive movement,” stated Dick W. Simpson, a former Chicago City Council member who campaigned for the tax change.

The tax was proposed to increase for properties selling for more than $1 million and decrease for those selling for less. Supporters argued this would level the playing field and aid the city’s most vulnerable residents. Similar ‘mansion taxes’ have been approved in Los Angeles and Santa Fe, N.M.

Opposition to the Proposed Tax Change

Opponents agreed that homelessness is an issue, but questioned the wisdom and timing of the solution. They argued it would further harm owners of office towers already affected by the post-Covid shift towards remote work. “It’s not a mansion tax, it’s a migrant tax,” said Anthony Beale, a Democratic City Council member, suggesting it would further strain the local economy.

Homelessness: A Nationwide Concern

Homelessness has become a major concern in several US cities. In Minneapolis, for instance, homeless encampments are routinely cleared out. New York City has placed limits on how long migrants can stay in city facilities.

However, public opinion on increased spending on homeless programs is divided. For instance, California voters only narrowly approved a ballot measure for the state to spend billions on treatment centers and supportive housing facilities.

The Situation in Chicago

In Chicago, estimates of the homeless population vary greatly. The city’s annual homeless count in early 2023 showed about 6,100 people living on the streets or in homeless shelters. But a nonprofit group’s estimation suggested about 68,000 people were homeless in 2021. This includes individuals living temporarily with others or in units where they are not on the lease.

With the migrant influx, the city is housing more than 11,000 of the estimated 37,000 arrivals in 23 shelters run by the city or state. Mayor Johnson had hoped the tax increase would generate at least $100 million each year for homelessness and affordable housing programs.

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