CHICAGO (news agencies) — An unusual legal challenge may upend the future of a Chicago ballot measure that would hike a real estate tax on high-end property sales to fund services for homeless people.
Such citywide ballot measures are rare in the nation’s third-largest city, but other cities, including Los Angeles, have approved similar so-called “mansion taxes.”
A Cook County judge last month rejected the measure, but backers of the effort, called Bring Chicago Home, hope it will be overturned.
Early voting for the March 19 primary in Chicago has already started, so the measure remains on the ballot as it’s being settled in the courts.
Here’s a closer look at the ballot measure and the issues surrounding it.
The referendum asks Chicago voters to support an increase on a transfer tax for properties over $1 million. It’s a one-time buyer’s fee.
Chicago’s rate is currently 0.75% on all property sales. The proposal overhauls the tax structure: 2% for properties over $1 million, 3% on properties over $1.5 million and down to 0.6% on properties under $1 million.
Most Chicago property sales are under $1 million, so the majority of home buyers will pay less. Analysis by the proponents shows roughly 95% of homebuyers would see a decrease.
The Chicago area’s median sales price is roughly $350,000, according to the National Association of Realtors. A buyer would currently pay $2,625 to the city. That would drop to $2,100 under the new structure.
Also, it’s a marginal tax, meaning the increased rate applies to only the portion above $1 million. For example, on a $1.2 million property, $1 million would be taxed at 0.6% with the remaining at 2%. Currently, the buyer pays $9,000, which would jump to $10,000.
Backers of Bring Chicago Home estimate the change will generate $100 million annually. It will be set aside solely for homeless services, including mental health care and job training.
Chicago spends about $50 million of city funds for such services. Advocates say having a bigger dedicated funding source would make a huge difference, including for prevention.
“It allows us to move the needle in a way we can’t do now,” said Doug Schenkelberg, executive director of the Chicago Coalition for the Homeless.
Roughly 68,000 Chicagoans experience homelessness and racial disparities exist, according to the coalition. Roughly half are Black. The definition of homeless covers people without fixed addresses, whether they are sleeping on a friend’s couch or the streets.
Brian Rodgers, 50, struggled with homelessness for years after serving time for a theft conviction. Not knowing where he was going to stay made it hard to find work.
“It feels like you are off balance. It feels like you don’t know where or when it is time for you to leave or it is time for you to have a bed to sleep,” he said. “Unstable situations like that create unstable decisions.”
About 17,000 of Chicago’s homeless population, or 25%, are children.
Electa Bey, 66, became homeless when her husband unexpectedly died from illness in 2019. They were evicted. It took months to find public housing for the four grandchildren she’s raising.
Family took them in, but it was far from the children’s school. They spent more than two hours each way commuting on public transportation.
“They couldn’t play with their friends. Their homework wasn’t always done They were falling asleep on trains and buses,” she said. “Children are affected so profoundly.”
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