Chicagoans last month rejected a large property tax increase intended to fund relief for the city 68,000 homeless, dealing a blow to Mayor Brandon Johnson’s progressive economic agenda.
Fifty-two percent of voters I said no in the March 19 referendum seeking to increase the transfer tax on property over $1 million, supporting That such a move would “generate at least $100 million annually and be legally dedicated to programs that alleviate homelessness, including assistance to children, veterans and those fleeing gender-based violence.”
Those who opposed the increase were partly the predictable political suspects. “I don’t think people trust the Chicago government group, the aldermen, the mayor or whatever, to use the money appropriately,” said Aaron Del Mar, a GOP strategist and former Republican Party chairman of Cook County. But there were also some strange bedfellows. “We’re going to ask people to pay another $100 million in taxes.” She said Brendan Reilly, Democrat and alderman of the Chicago City Council, “however, I still can’t get a straight answer as to where the $200 million we allocated for this year went, where it was spent, and whether there was any return on investment.”
The mayor’s agenda was “aggressive against the business community here,” Reilly She said. Some of the strongest resistance has come from real estate groups, which protest that the measure unfairly affected businesses. After all, most of the properties have sold for more than $1 million they are commercial properties. In February, a Association had been successful stop the initiative in first instance for constitutional reasons before this ruling was overturned by the court of appeal. “This referendum would be a backdoor property tax for all Chicagoans, and it is important that our elected officials do not otherwise mislead voters,” said Farzin Parang, executive director of the Building Owners and Managers Association of Chicago , in a statement after the first ruling. .
Although the tax increase was touted as one that would target wealthier residents, dissenters She said this interpretation conveniently failed to take into account the fact that many buildings valued at more than $1 million include condominiums and multifamily complexes, which would then pass on the price of the tax increase in the form of higher rental prices.
“The landlord will push [the tax] about us,” Chicago renter Debbie Daniels She said in an interview with The New York Times. That outcome would have been bitterly ironic to those in Chicago who were said from the campaign behind the Bring Chicago Home initiative, which argued that the increase would fund affordable housing.
In response to the defeat, Bring Chicago Home presumed the movement was in trouble because it “faced an onslaught of attacks from those responsible for creating the housing crisis.” But that fails to explain why the effort has drawn ire across the political aisle. Chicago isn’t exactly a conservative city. The majority of voters simply do not see the transfer tax as the best solution to an admittedly troubling issue.
“Higher tax burdens would affect not only the owners of various commercial properties, but also their customers, employees and tenants,” Katherine Loughead, senior policy analyst he wrote for the Fiscal Foundation. It’s not entirely unlikely that Johnson’s proposed tax would punish middle-class Chicagoans while exacerbating the very problem — homelessness and affordable housing — that he said the tax increase would solve.
You don’t have to look very far for an example of how this works in practice. In 2022, the city of Los Angeles approved a similar tax increase on properties worth more than $5 million. “Immediately the real estate, the high-end real estate market collapsed,” She said Conan Nolan, chief political reporter for NBC in Los Angeles. Supporters of that tax increase predicted it would raise $900 million a year. A year later, however, budgeted spending on that tax reached $150 million. The debacle is particularly relevant in a state like California, which, from 2018 to 2023, spent around 20 billion dollars to solve the problem of homelessness, just to add more to the homeless population than any other state.
Johnson should take note. Losing him in Chicago requires him to offer more logical, long-term solutions that don’t harm the people he wants to help.