Bring Chicago Home real estate transfer tax referendum appears headed to defeat
CHICAGO (CBS) -- Chicago voters on Tuesday appeared poised to reject a bid by Mayor Brandon Johnson and his progressive allies on the City Council to raise taxes on the sales of million-dollar properties to help fund efforts to fight homelessness.
With the vast majority of the vote counted as of 9:15 p.m., 54% of Chicago voters had voted no on the so-called Bring Chicago Home referendum, which Johnson had campaigned on during his successful run for mayor in 2023.
However, the Bring Chicago Home coalition supporting the referendum was not ready to concede defeat.
"While tonight's election results are disappointing, we are nowhere near the end of our journey," the coalition said in a statement, noting more than 100,000 mail-in ballots have yet to be returned to the city's election board.
With no votes on Bring Chicago Home holding an edge of more than 23,000 votes so far, an overwhelming majority of outstanding mail ballots would need to favor the measure for it to win out in the end.
"Whatever the final count, one thing is abundantly clear tonight: how determined our opponents are to continue profiting from displacement and inequality. From landlords sending intimidating emails to tenants to a legal challenge attempting to invalidate the results, the realtors, corporate landlords, and mega-developers fought us at every turn," the coalition added.
A coalition of real estate and business groups sought unsuccessfully to block the question from the ballot, claiming it is unconstitutional, but it was allowed to remain after the Illinois Supreme Court declined to take up a lower court ruling in favor of the referendum.
Now voters appear close to defeating the tax plan at the ballot box.
What is the Bring Chicago Home referendum?
The Bring Chicago Home referendum is a signature initiative of Mayor Johnson and his progressive allies on the City Council in an effort to raise more money to fight homelessness.
The measure asked voters to authorize the City Council to increase the real estate transfer tax on the sales of properties for $1 million or more in Chicago, while lowering the tax rate for less expensive properties:
- The transfer tax for properties valued at less than $1 million would drop from 0.75% to 0.60%.
- Properties sold for between $1 million and $1.5 million would pay a 2% transfer tax, nearly triple the current rate.
- Properties sold for $1.5 million or more would pay a 3% transfer tax, four times the current rate.
Bring Chicago Home's backers originally tried to convince the Illinois General Assembly to pass the tax plan, but with no action from state lawmakers, their only other option was to seek a voter referendum in Chicago.
In November, the City Council voted 32-17 to put the binding referendum on Tuesday's ballot.
Why did the referendum fail?
Former Ald. Leslie Hairston said she believed the tax plan was a good idea, but might not have been the best approach.
"This tax is supposed to help the homeless in Chicago, and I think everybody on both sides of the aisle would agree we need to do more to help the homeless. The question becomes how do you do it?" she said.
Hairston noted progressives had been pushing for an increase in the city's real estate transfer tax on million-dollar property sales for more than a decade, but might have needed to adjust their proposal to match inflation over the years, since most small businesses and many landlords who own small buildings would be impacted.
"I think it's put more on people's minds, and people just aren't sure," Hairston said.
Republican political strategist Aaron Del Mar, a former Cook County Republican Party chair, said the referendum's showed voters have a lack of trust in government to spend tax money wisely.
"I don't think people trust the Chicago government group, aldermen, mayor, or whatever – to use the money appropriately," he said.
While the tax might not have affected most homeowners, Del Mar said it was clear voters were not ready for another tax hike, one that would have affected small businesses and many landlords.
"I think they caught too many of the people of Chicago in here, including small business owners. You're catching landlords that have a three-flat, that that's their whole life investment. I mean a million dollars is certainly a lot of money, but it's not what it used to be," he said.
Del Mar said he believes the measure likely would have passed easily if supporters had targeted the tax increase on properties worth $3 million or more, rather than $1 million.
Why did the referendum face a court challenge?
The Building Owners and Managers Association of Chicago (BOMA) and several other real estate and business groups have argued the tax referendum is unconstitutional, and would effectively lead to a property tax hike for all Chicago homeowners.
Critics have claimed the measure is an example of illegal so-called "log rolling," when unpopular legislation is combined with more attractive proposals to secure popular support. In this case, opponents argued the ballot referendum illegally combined a proposed tax hike with a proposed tax cut.
BOMA and other opponents also have warned that the tax plan would harm the city's already struggling commercial real estate market, diminish existing commercial property values, and lead to higher property taxes for homeowners because the burden of covering the city's property tax needs would shift from commercial to residential properties.
While the appeals court decision in the case left the door open for a future court challenge should voters approve the referendum, with voters having rejected the measure, that court battle has become moot.