Chicagoans who show up at the polls in March will be asked to authorize a fundamental change in tax policy to confront the burgeoning problem of homelessness.
The City Council’s Rules Committee made it happen Tuesday by putting a binding referendum on the ballot asking Chicago voters to authorize the City Council to quadruple the city’s real estate transfer tax rate on sales over $1.5 million and more than double the tax rate on transactions above $1 million.
The vote was 32-16.
With a limit of three referendum questions, Chicago mayors and their Council allies have for decades used innocuous, advisory questions to crowd off the ballot controversial ideas that could change the political landscape — like an elected school board.
Tuesday’s vote offered a twist on that playbook, at the behest of Mayor Brandon Johnson.
The question approved Tuesday is what proponents call “Bring Chicago Home.” Two advisory questions — asking whether Chicago should add more mental health clinics and devise a flood mitigation plan — will be considered by the Rules Committee at 9:45 a.m. Wednesday.
The revised transfer tax is expected to generate $100 million a year, earmarked exclusively to combat homelessness and provide supportive services for an unhoused population of roughly 68,000. That includes people living on the streets, in shelters and “doubled-up” with relatives, friends or acquaintances.
Before the final vote, Ald. Ray Lopez (15th) tried to replace the binding tax question with an advisory referendum asking voters whether Chicago should remain a sanctuary city.
Johnson’s allies shot that down, 37-11.
Undaunted, Lopez joined colleagues Anthony Beale (9th), Marty Quinn (13th), Silvana Tabares (23rd) and Anthony Napolitano (41st) — in calling a special Council meeting for 10:30 a.m. Thursday to consider the sanctuary city question and two other advisory referenda.
That sets up a race to see which side can approve its three questions first to crowd the other side off the ballot.
“We were expecting fireworks today. Instead, we are getting parliamentary drama,” said North Side Ald. Maria Hadden (49th), a champion of the “Bring Chicago Home” movement. “Taking out each other’s items, right, so that you can have your political moment is wrong.”
Lopez held his ground, demanding to know how the $100 million in new tax revenue would be spent.
“I’m not a fan of, ‘Trust us. We’ll get it to you later,’” Lopez said.
“Raising taxes to grab a headline does squat when we’ve literally got hundreds of millions of dollars we still haven’t moved the needle on.”
Top mayoral aides said the $100 million would be used to support “permanent supportive housing” and bankroll “services around it.”
Beale warned Johnson was asking too much of the business community.
“The breaking point is gonna be coming because we just hit ’em with the tipped wage workers. We’re trying to hit ’em with the P.T.O. [paid time off]. Now, we’re gonna hit ’em with this. When does it stop?” Beale said.
To appease business and minimize Council opposition, Johnson accepted a “three-tiered progressive structure.”
The new tax rate on sales under $1 million would be 0.60%, down from the current rate of 0.75%. Sales of $1 million or over, but under $1.5 million, will pay a 2% tax, more than 2.5 times what they pay now. And sales of $1.5 million and higher will pay 3%, four times the current rate.
Ald. Carlos Ramirez-Rosa (35th), the mayor’s City Council floor leader, said he has no doubt Chicago voters will approve the binding referendum even if business leaders and the real estate industry spend big money to defeat the question at the polls.
“They are very well aware that this is good, winning public policy. That’s why they’ve worked so hard behind the scenes and in public to try to stop this vote from even happening today. Because they know that, if voters are given a choice, they’re gonna vote yes,” Ramirez-Rosa said.
After the vote, Johnson held a pep rally on the third floor to celebrate political victory five years after “Bring Chicago Home” was first introduced.
“Homelessness is at 12% since 2019 and Black Chicagoans account for almost 70% of the unhoused population. And so, whenever there are individuals asking me, ‘What are you doing for Black people?’ they don’t have to look any further,” the mayor said.
