Chicago, IL

Chicago Mayor Johnson's Plan to Raise Taxes to Pay for Homeless Services Goes to Residents for Vote

Natalie Frank, Ph.D.

Chicago Mayor Johnson hopes to build momentum for homelessness tax plan

Mayor Brandon Johnson's proposal to address homelessness through an increased real estate transfer tax has been approved by the Chicago City Council. This move reflects a pivotal step in fulfilling one of Johnson's key campaign promises.

With a 32-17 vote, aldermen gave their endorsement to the "Bring Chicago Home" initiative. This initiative aims to introduce a tiered tax structure on property sales across the city, a strategy seen as crucial in generating essential funding for addressing the issue of homelessness in Chicago.

The approval of the referendum signifies the commencement of what is expected to be an intense battle of campaigns leading up to the March primary election. On one side stands the "Bring Chicago Home" coalition, advocating for the tax change, while the real estate industry opposes it, arguing that it could further strain an already vulnerable market, affecting office spaces, retail properties, and apartment buildings, ultimately resulting in higher costs for tenants.

Despite challenges and distractions, such as a scandal involving his closest ally in the City Council and growing concerns related to the migrant crisis, Mayor Johnson celebrated this accomplishment during a post-council meeting news conference. He expressed his confidence in Chicago's residents supporting this initiative, highlighting the progress made since the early days of his mayoral campaign when he faced low polling numbers.

Before the vote, aldermen engaged in a brief discussion about the proposal, acknowledging concerns about potential repercussions. However, there was a unanimous agreement that it is essential for the voters to have their say in this matter.

The referendum will provide Chicago residents with the opportunity to voice their opinion on implementing a revised levy structure and directing the new revenue towards addressing homelessness. This includes supporting permanent affordable housing and the necessary services to obtain and maintain permanent housing in the city.

If the referendum successfully passes, the City Council will be tasked with drafting and approving a final ordinance. This legislation was not only a part of Mayor Johnson's 100-day promises but has also been a long-standing goal for progressive groups. Although it faced a setback when former Mayor Lori Lightfoot withdrew her support after taking office, Mayor Johnson and his progressive allies see this as a new opportunity, especially given the current migrant crisis.

The proposed real estate transfer tax restructuring entails reducing the tax rate on property sales below $1 million while increasing the rate for properties valued between $1 million and $1.5 million and even further for properties exceeding $1.5 million. The tax would be implemented using a marginal rate system, subjecting only the additional dollars above the lower bracket to the higher tax rate. These rates would be adjusted for inflation every five years, taking effect on January 1, 2025, if approved by voters.

In addition to the homelessness tax initiative, Mayor Johnson aimed to double the city's current paid leave mandate to 10 days. However, this proposal was temporarily postponed due to opposition.


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