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Plan To Tax Sale Of Property Worth $750K+ To Replace Lead Pipes Stalls

“We’re asking those that have realized the gains in house value in areas where salaries are lucrative... to help fund areas of low income and need."

The lead testing kit Chicago residents can request.
City of Chicago
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DOWNTOWN  — Aldermen clashed Monday over a measure that would add a 1 percent tax to the sale of any Chicago property worth $750,000 or more to fund an effort to replace lead pipes in Chicago homes that could be polluting water, but took no action.

The tax would also require the approval of voters as part of a referendum.

RELATED: Aldermen Propose Tax On Sale Of Property Worth $750K+ To Replace Lead Pipes In Chicago Homes

The proposal was met with pushback from the real estate lobby, which anticipated revenues would fall short and sap equity from sellers.

The funds raised by the lead abatement transfer tax would be earmarked for a special fund, which would pay to retrofit and remediate the city’s water delivery pipes and infrastructure, according to the measure.

Ald. Scott Waguespack (32) estimated it would cost $4,000 to $7,000 per house to replace service lines that run from the water main to the home, and between $1.2 and $2.1 billion citywide.

“With Chicago, the number could go up depending on the length of the pipe in some of our neighborhoods,” Waguespack said, likely more if the city replaced lines to water fountains in public parks.

“We don’t know if our own personal homes have elevated lead levels,” Ald. Chris Taliaferro (29) said. “We don’t know the cause that it could be harming our grandchildren, our children, and even ourselves as we continue to drink the tap water that runs through our faucets.

Tailaferro said he is normally anti-tax, but this issue is too important.

“There is no known safe lead level in a child’s blood… What that tells me is that we need to continue to fight until there is no lead in our water, especially with children present in the residence,” Taliaferro said.

Waguespack estimated the tax could net $180 to $240 million each year, a number disputed by Brian Bernardoni, the senior director of government affairs and public policy at the Chicago Association of Realtors, describing it as “the wrong tax at the wrong time.”

Only a small number of homes would qualify for the tax, Bernardoni said.

“Last month, $200 million in homes were sold,” Bernardoni said, adding that does not include commercial or industrial property. “That meant you’d only get $2 million on monthly basis.”

That means it would take years for enough money to be collected to replace all the necessary pipes, Bernardoni said.

Waguespack then asked if real estate agents disclose when they sell houses that contain lead pipes and service lines.

Current law only requires lead paint to be disclosed, Bernardoni said.

“If we’re going to be blunt and candid, then let’s talk about it as grown-ups” by discussing the use of PVC rather than metal pipes, Bernardoni said.

Waguespack said he took offense to Bernardoni describing the conversation Monday as not serious.

“I get what you’re saying, that there’s other ways to do this,” Waguespack said. “The Water Department has been reluctant to move on this, we put this forward to change serious problem we have with children ingesting lead. Last year we had 500 kids with lead poisoning. If we had a Water Department who would work with us, I think we could have moved this forward a lot sooner.”

Bernardoni suggested aldermen look at the existing Water Department budget or consider a fee on users of the city’s water — including the suburbs. Bernardoni also suggested tying the fixes to a capital bill in Springfield, or borrowing against a new water fee.

Aldermen already approved a hike in water and sewer fees to help pay for pensions. The city’s tax on water has nearly tripled over the past decade, from $1.33 per 1,000 gallons to $3.95 in 2018. Sewer rates also rose from 84 percent of the water rate in 2008 to 100 percent in 2015. Both rates will be tied to actuarially calculated rates to help fund the municipal pension fund.

Ald. John Arena (45) said he thought a map with housing sale prices would help illustrate “that this is not an unreasonable levy.”

“We’re asking those that have realized the gains in house value in areas where salaries are lucrative, resources are lucrative and available, to help fund areas of low income and need,” Arena said.

Attendance – Chairman Ed Burke (14), Proco Joe Moreno (1), Pat Dowell (3), Sophia King (4), Leslie Hairston (5), Roderick Sawyer (6), Gregory Mitchell (7), Patrick D. Thompson (11), Raymond Lopez (15), Toni Foulkes (16), David Moore (17), Derrick Curtis (18), Matt O’Shea (19), Willie B. Cochran (20), Howard Brookins (21), Ricardo Munoz (22), Michael Scott Jr. (24), Roberto Maldonado (26), Walter Burnett (27), Chris Taliaferro (29), Ariel Reboyras (30), Scott Waguespack (32), Carlos Ramirez Rosa (35), Gilbert Villegas (36), Nicholas Sposato (38), Margaret Laurino (39), Michele Smith (43), Tom Tunney (44), John Arena (45), Harry Osterman (48), Joe Moore (49), Deb Silverstein (50)