CITY HALL — A longstanding proposal to potentially raise hundreds of millions of dollars for the city’s efforts to combat homelessness got a symbolic push forward Thursday.
The Bring Chicago Home plan aims to hike the city’s real estate transfer tax rate on property sales over $1 million, with the additional funds raised dedicated to provide permanent affordable housing and wraparound services for unhoused Chicagoans.
The proposal was discussed at a subject matter hearing Thursday hosted by City Council’s housing committee, which is led by Ald. Byron Sigcho-Lopez (25th). No vote was taken, but supporters hailed the meeting as an important step forward after recent setbacks.
In November, 25 alderpeople did not attend a special City Council meeting called in support of Bring Chicago Home, derailing an effort to add a referendum to the February election ballot. Former Mayor Lori Lightfoot, who endorsed the plan during her first mayoral campaign, later changed her position and effectively stalled it from moving forward.
Advocates say the tax rate increase from .75 percent to 2.65 percent would raise $160 million per year, funds they argue are direly needed to help get people off the streets and shelters and into permanent housing. Critics worry the tax hike would hurt landlords and commercial property owners, especially Downtown where office buildings have been slow to see a return of workers since the pandemic.
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Passing Bring Chicago Home was a central campaign promise of Mayor Brandon Johnson, who mentioned it in his inaugural address and reiterated his support for the measure on social media Thursday.
“My administration is committed to Bring Chicago Home, and to building consensus around providing affordable housing to combat homelessness in our city,” he tweeted.
Alderpeople and advocates said the next step for the measure is to introduce a resolution to City Council that, if passed, would lead to a public referendum, potentially to be voted on in March or November 2024.
If the measure passes that referendum, City Council would then craft an ordinance to actually raise the tax structure. That ordinance too would then need to be passed by the full City Council.
‘Our Current Funding Is Insufficient, Period’
Thursday’s hearing saw testimony and comments from city employees, housing advocates and alderpeople, most of whom were supportive of Bring Chicago Home. A few critics spoke out against the proposal during the public comment period.
There are several different numbers used when determining the total number of unhoused Chicagoans, Department of Family and Support Services commissioner Brandie Knazze said Thursday.
Every January, the city completes a “Point-In-Time” count, when it logs the total number of people either living on the street or in shelters. That number was 6,139 as of January 2023. Asylum seekers accounted for 42 percent of that count, according to city documents.
A broader count, including the one used by the Bring Chicago Home campaign, includes people who are “doubled-up,” meaning they live with family or friends and do not have “their own space due to economic hardship or housing loss,” according to a presentation at the hearing.
Including the doubled-up number, there are more than 65,000 Chicagoans experiencing homelessness, according to the city’s presentation. During the 2021-22 school year, 17,773 Chicago Public School students experienced “literal or doubled-up homelessness,” officials said.
Housing commissioner Marisa Novara outlined her department’s efforts to build affordable housing and support low-income renters at the hearing. But several of those initiatives are backed by temporary federal COVID funds.
“Our current funding is insufficient, period. But it is also insufficiently flexible. We really need more funding sources that are flexible that allow us to reach the very lowest income, which is the bulk of our low-income population in the city,” Novara said. “So we need more funds. We need more funds to affordably house Chicagoans who desperately need it.”
Organizers with the Bring Chicago Home campaign, including staff members from the Chicago Coalition for the Homeless and other groups, emphasized that the best way to combat homelessness is to provide permanent housing options with ongoing social services.
Dollars raised through the proposal’s tax hike would provide rental subsidies and fund construction of additional permanent affordable housing units. It would also fund case management such as mental healthcare, substance use counseling, job training and other assistance.
Amy Masters, director of government and external affairs at the Building Owners and Managers Association of Chicago, was one of the few critics to speak at Thursday’s meeting, citing concerns on how the tax would affect Downtown office buildings.
“Our office buildings will be hit exceptionally hard if this transfer tax were to pass. The shift to remote work has created incredible challenges for Chicago’s Downtown office buildings that will last for years to come,” Masters said during the public comment period. “Market studies suggest that Chicago’s office buildings have lost 50 percent of their value, and we estimate that almost half of Chicago’s office buildings are in some sort of financial distress.”
But Peter Toepfer, executive director of the Center for Housing and Health, said the plan would only impact a small number of the richest Chicagoans who can afford to do their part for unhoused neighbors.
“With this unique funding, we want to focus on what we know permanently ends homelessness and that’s housing,” said Toepfer, whose group provides housing and case management services for people experiencing homelessness. “We are asking a few people to pay a bit more on an existing tax, one time, when they sell a property over $1 million, to ensure that thousands of people can have a home to call their own.”
What’s Next?
At the earliest, Bring Chicago Home would not become law before spring, said Ald. Maria Hadden (49th), a longtime supporter of proposal. She’s optimistic a resolution will be introduced to City Council this fall to get it on the primary ballot in March 2024.
The measure would then need to come back to alderpeople to craft an official ordinance and pass it through the City Council.
In the meantime, specifics are still being worked out, like whether the increase would be a “flat” tax or a “marginal” one, where buyers of a property would pay a higher transfer tax rate only on amounts over $1 million. Under that structure, a $1.2 million sale would only be taxed higher on the additional $200,000.
Novara and Hadden said that format would help insulate the city from potential legal challenges and be less burdensome for homeowners and small landlords whose properties are worth close to $1 million.
“As we think of something that will not just withstand a legal challenge, but also work over a changing period of time, so we’re not having to come back, I think the marginal tax structure is going to withstand changing market conditions a bit better,” Hadden said.
Even facing a long road to potential passage, Bring Chicago Home supporters cheered Thursday’s hearing as major step forward after it stalled by the previous mayoral administration.
“The chambers are full,” Sigcho-Lopez said, referring to the dozens of activists who attended Thursday’s hearing. “We went from having difficulties even discussing issues to now having robust participation, which I think is something healthy.”
“This is a new day, this is the first step, of many,” he said.
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