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Chicago Ballot Amendment Would Tax Real Estate Moguls to Fight Homelessness

Allowing real estate interests to shape public policy will not restore housing agency to the people of Chicago.

Military veterans arrive for an event designed to help veterans who are experiencing homelessness or housing insecurity on June 16, 2023, in Chicago, Illinois.

“It was never a surprise that wealthy real estate interests would fight an effort like Bring Chicago Home,” says Asha Ransby Sporn, the campaign director of the Bring Chicago Home referendum campaign. The Bring Chicago Home ballot amendment would shift the city’s flat-rate Real Estate Transfer Tax of .75 percent to a graduated system, with a 0.6 percent tax on sales under $1 million, and a 2-3 percent progressive tax on sales over $1 million. The money earned through this measure is designed to serve as a source of funding to address affordable housing, especially for those experiencing homelessness in Chicago.

Not surprisingly, as Ransby-Sporn notes, the real estate lobby in Chicago has been relentless in undermining and challenging this referendum, including mounting a legal challenge against it. In February, Cook County Circuit Judge Kathleen Burke sided with the industry in invalidating the referendum using an unclear reasoning that cited unreleased court records. It appears that she took issue with the measure’s combination of multiple questions — a logic that could be extended to prohibit any referendum proposing a progressive tax structure.

After the Chicago Board of Elections appealed, Judge Raymond Mitchell reversed Burke’s February decision on March 6, allowing the question to remain on the March ballot.

Like New York City and Los Angeles, Chicago faces an affordable housing crisis. Unlike these other cities, however, Chicago does not have a dedicated funding stream to help combat the crisis. Bring Chicago Home represents a critical step in this direction by providing the city with some committed funding for fighting houselessness, in addition to asserting metropolitan agency, establishing political willpower and respecting voters’ voices.

The history of Chicago’s affordable housing crisis, and the related rise in people experiencing homelessness, have roots in both national and local policies. At the national level, decisions were made to deregulate financial institutions in response to the economic downturns of the 1970s and the subsequent Savings and Loan disaster of the 1980s and 1990s. Such deregulation opened the housing market to commercial banking interests and subsequent speculation, securitization and fraud. These changes have led to regular economic downturns, most notably the Great Recession and the Savings and Loan Crisis, which slowed the construction of new housing, displaced millions through evictions and foreclosures and increased the share of institutional investor owners at the expense of individual buyers. Not surprisingly, the effects of these crises have been felt most strongly by low-income Americans and communities of color.

At the local level, city leaders have, since the late 1990s, abandoned public housing while failing to establish a reliable funding stream to address the subsequent spike in houselessness. The Chicago Housing Authority’s (CHA) Plan for Transformation signaled the city’s shift away from publicly owned and managed housing toward public vouchers for Section 8-approved units and mixed-income private developments. In the 1990s, before the plan was implemented, the CHA oversaw nearly 43,000 units of public housing; by 2010 this number had been reduced to 25,000. Of the approximately 20,000 units of permanent public housing that remained following the complete implementation of the plan, about 40 percent were allocated for seniors.

Moreover, the CHA Plan resulted in a loss of about 16,000 units allocated for families, with the expectation that an increase in Section 8 vouchers and vouchers for mixed-income developments would take up this slack. However, the Section 8 wait-list has been closed since 2014, and the CHA itself cites wait times of between six months and 25 years for other forms of public housing (mixed-income vouchers and permanent units). Our collaborative, digital, public history project, the Dis/Placements Project, focuses on Chicago’s Uptown neighborhood, where wait times for all CHA public housing units (including permanent public housing, project-based vouchers, individual/family housing and senior units) range from 3 to 25 years, with the majority listed as “more than 25 years.”

A comparison with New York City provides some insight into the decline of permanent public housing in Chicago. While the population of New York City is about three times larger than that of Chicago (8.468 million vs. 2.697 million), New York maintains approximately eight and a half times more public housing units than Chicago (177,569 vs. 21,000). With the loss of so many public housing units over the last few decades, the unbelievable Section 8 wait-lists, and the real estate industry’s appetite for luxury building construction and conversions, it’s no wonder that so many low-income Chicagoans are struggling to find a home.

If we take the count conducted by the Chicago Coalition for the Homeless (rather than the more limited Department of Housing and Urban Development’s “Point-in-Time” count), then there are approximately 68,440 Chicagoans experiencing homelessness — a number that puts the city third in the nation, just behind New York (approximately 100,000) and Los Angeles (about 75,000). What is important to note here is that both New York and Los Angeles have dedicated funding streams for combating homelessness — New York City’s budget for the 2024 fiscal year included $4.1 billion for homelessness services, while Los Angeles’ fiscal 2024 budget set aside 10 percent of funds, or $1.3 billion, to address the crisis of homelessness. Chicago, on the other hand, allocated only $250 million to manage this multifaceted problem in 2023-2024.

City2023-24 budgetDollars allocated to address homelessnessPercent of overall budget allocated
New York City$106.7 billion$4.1 billion3.8 percent
Los Angeles$13 billion$1.3 billion10 percent
Chicago$16.6 billion$250 million1.5 percent

In Los Angeles, homeless services are funded through Measure H, a quarter-cent sales tax that was approved by voters in 2017, which consistently funds about 85 percent of the county’s homelessness budget. In New York, the majority of the Department of Homelessness Services’ budget is funded through the City Tax-Levy. The Homeless Service has long had a comparatively large budget because of the city’s right-to-shelter consent decree, passed in 1981, following the decision in Callahan v. Carey, in which the New York State Supreme Court determined that the city and state were responsible for providing shelter to the homeless.

Chicago’s lack of a dedicated funding stream means that it depends on federal and state dollars for the majority of its money for homelessness programs. Those state and federal funds are not only insufficient, but they also fluctuate according to decisions that are outside the city’s control. The Bring Chicago Home transfer tax proposal is projected to raise at least $100 million per year, giving the city government a dedicated funding stream for addressing homelessness. Furthermore, raising these additional funds would begin to bring Chicago in line with other major U.S. cities, putting some measure of control over housing in local hands.

Opponents of the referendum have employed scare tactics and applied pressure at the county level in an attempt to preclude a democratic referendum on the Bring Chicago Home proposal. Allowing real estate interests to determine the direction of public policy is not how we will restore housing agency to the people of Chicago.

The battle between the progressive left in Chicago and entrenched Democratic machine politics at the city and county levels has been ongoing for many decades. This conflict was perhaps most pronounced during Harold Washington’s tenure in the mid- to late 1980s, when the progressive mayor and his allies took the machine head on and faced obstruction from entrenched intraparty rivals. Mayor Brandon Johnson is seen by many as the heir of Washington’s progressive coalition, and Bring Chicago Home was one of his signature campaign promises, so the reemergence of this fight should surprise no one.

To be sure, Bring Chicago Home addresses only one facet of the complicated problem of affordability and focuses largely on the issue of homelessness. It does not necessarily provide all of the funding required for tackling this issue. Even if the referendum is passed, the city must also fund the construction of new public housing, continue to provide incentives to affordable developers, and work to preserve existing low-cost units through single-room occupancy protections and the legalization of rent control to more effectively address the shortage of approximately 120,000 affordable units.

Nevertheless, it does create a dedicated source of funding to tackle this intractable issue, which would be a step in the right direction. Establishing this funding stream will bring Chicago’s response to the homelessness crisis in line with other major U.S. metros, assert the city’s agency in addressing these challenges, and — most importantly — provide needed support to the city’s most vulnerable residents.

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