CHICAGO — A lawsuit trying to block the city from raising certain real estate taxes to support homelessness services is a last-ditch attempt by wealthy landlords and real estate agents to protect their profits, advocates of the measure said this week.
The measure, known as Bring Chicago Home, was approved by City Council in November, clearing the way for a referendum question to appear on the March primary ballot. Supporters estimate the tiered tax rate hike on high-end property sales would raise about $100 million annually to build housing and provide outreach services to people experiencing homelessness.
Last week, a group of real estate trade groups and landlords that include the Building Owners and Managers Association of Chicago, Chicagoland Apartment Association, Neighborhood Building Owners Alliance and others filed a lawsuit in Cook County Circuit Court to block the ballot question, according to The Daily Line.
The groups argue the referendum question is too “vague” and “ambiguous” in explaining how it will reduce homelessness and violates the state Constitution by combining “separate, unrelated questions” about the proposed transfer tax rate, according to the lawsuit. Those should be split into three different questions for voters to consider, according to the lawsuit.
Ald. Carlos Ramirez-Rosa (35th), one of the lead supporters of Bring Chicago Home, called the lawsuit “frivolous.”
It’s a “ridiculous” attempt to block Chicagoans from voting on the progressive measure after previous attempts by real estate interests to misrepresent the measure as a property tax increase for everyone failed, Ramirez-Rosa said.
“Every neighbor and every resident that I’ve spoken with is very much in support of Bring Chicago Home,” Ramirez-Rosa said. “And I think the opposition sees that enthusiasm. I think they see just how popular and how good this policy is and are now looking to file frivolous lawsuits as a last-ditch effort to try and stop this policy from moving forward.”
The measure approved in November is a compromise among advocates, and Mayor Brandon Johnson and his allies.
The rate proposal includes:
- Property sales under $1 million would be taxed at .60 percent, down from .75 percent
- Property sales between $1-1.5 million would be taxed at 2 percent
- Property sales above $1.5 million be taxed at 3 percent
Ramirez-Rosa and fellow North Side Alds. Maria Hadden (49th) and Matt Martin (47th) introduced the resolution to City Council in September. Alderpeople passed the measure in a 32-17 vote.
“The coalition that first proposed Bring Chicago Home — as well as the city of Chicago’s Law Department — spent many, many hours crossing every ‘T’ and dotting every ‘I’ to ensure that the referendum language that was adopted by the Chicago City Council conformed with all applicable laws,” Ramirez-Rosa said.
The Building Owners and Managers Association, one of the lawsuit’s plaintiffs, previously argued in a white paper that Bring Chicago Home would hurt the city’s Downtown real estate market with a “significant additional tax burden.”
“Make no mistake, quadrupling this tax on downtown office buildings will hurt homeowners and businesses – as well as the Black, Brown and working-class Chicagoans our industry supports — across the city,” Farzin Parang, the group’s executive director, said in a statement. “We have said from the beginning that all stakeholders should be at the table to create a detailed plan and a sustainable funding source to address homelessness.”
Neighborhood Building Owners Association president Michael Glasser said in a statement that 70 percent of Chicago’s affordable housing is supplied by the small- and mid-sized neighborhood housing providers his group represents.
“This tax increase affects almost every apartment building in the city,” Glasser said in an email. “This measure will make it more expensive to invest in affordable housing, which is the exact wrong way to make housing more available and to keep people housed.”
Brandie V. Knazze, Department of Family and Support Services commissioner, urged city leaders to support Bring Chicago Home during city budget hearings in the fall.
During the early days of the COVID-19 pandemic, the city used increased federal funding to create a rapid rehousing program and an accelerated moving events program to help unhoused Chicagoans get stable housing and related supportive services, Knazze said.
That federal funding is coming to an end, Knazze said. Without a steady revenue stream from Bring Chicago Home, the department will have to scale back the “housing first” programs that the city’s Office of Inspector General called a “success” and a “potential model for other jurisdictions working with their own encampment populations” in its 2023 audit, Knazze said at the time.
Doug Schenkelberg, Chicago Coalition for the Homeless’ executive director, said the lawsuit is “a desperate attempt to deprive Chicago voters of their right to have their voices be heard.”
“This lawsuit is a political maneuver, orchestrated to protect the interests of greedy landlords and multi-national real estate corporations at the expense of Black, Brown, working class and homeless Chicagoans,” Schenkelberg said.
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