Judge tosses Chicago referendum on tax hike on sales on million-dollar homes to fight homelessness
CHICAGO (CBS) -- A Cook County judge on Friday ruled the controversial Bring Chicago Home ballot referendum is invalid.
A judge ruled the referendum is vague and unconstitutional. It would ask voters to restructure the real estate transfer tax to bring in funds to help the homeless in the city.
Those against the proposal called it a victory. Yet those supporting the referendum said they will keep fighting.
The measure was to appear on the March 19 Illinois Primary Election ballot in Chicago. The referendum remains on the ballot, but if the judge's ruling stands, the votes will not be counted.
The measure would have given the City Council authority restructured the real estate transfer tax – with the tax on homes valued at more than $1 million going up, and the tax on some other homes going down.
The real estate transfer tax is a one-time tax paid when an estate changes ownership.
Specifically, the Bring Chicago Home proposal would create a tiered system for the real estate transfer tax for property sales in Chicago:
- 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.
The proposal was a key initiative of Mayor Brandon Johnson's progressive agenda. The mayor has said the ordinance would lower the real estate transfer tax for 95% of homeowners, while increasing the tax on more expensive buildings, creating approximately $100 million in annual revenue for efforts to combat homelessness.
"We know that homelessness is up since 2019, and that Black Chicagoans account for 69% of our city's unhoused population, and one in four Black students in the Chicago Public Schools, unfortunately, will experience homelessness at least once during their lives. Bring Chicago Home is an important measure that I believe will help rectify this wrong," Mayor Johnson said in November. "My administration will continue our mission to support Chicago's unhoused, and I will remain resolute in my belief that housing is truly a human right."
Advocates for the referendum spent weeks canvassing Chicago neighborhoods and holding rallies.
"It's absolutely a solid referendum," said Doug Schenkelberg, with the organization Bring Chicago Home that pushed to get the yes/no referendum to voters. "It's to create a dedicated revenue stream to provide permanent housing and wraparound services to people experiencing homelessness."
But real estate groups called the proposal unconstitutional, so they sued. On Friday, a judge agreed – to the pleasure of even the Southland Black Chamber of Commerce.
"I think they just assumed that since the $1 million price tag was put on there, this is a rich person's tax to help poor people,'" said Cornell Darden Jr., chairman of the Southland Black Chamber. "But we didn't see it that way."
Darden said if property owners paid the increase, they would simply pass it on to renters.
"It can help increase the problem of homelessness by raising rental prices," said Darden.
Ald. Maria Hadden (49th) of Rogers Park took aim at the real estate lobby that sued.
"These are the same companies raising your rents and deconverting your condos, displacing you and your family from our neighborhoods," she wrote in a statement. "Chicago voters should be furious."
"We expected this tactic to be out there. We expect other tactics to be thrown out to try to stop this," added Schenkelberg, "but it doesn't slow us down."
The Mayor's office released the following statement: "Bring Chicago Home remains on the ballot. We are disappointed in the court's ruling, but will be exploring every legal option available. We firmly believe the referendum is legally sound and the final arbiter should be the voters of the City of Chicago."
The Chicago Coalition for the Homeless also said they believe the decision will be appealed.
As for voters, whether the yes and no votes on the referendum will be counted depends on if and how the courts rule next.
"We await future direction from the courts as to what to do with this question on the ballot, and votes already cast for it," said Max Bever, director of public information for the Chicago Board of Elections.
The Chicago Building Managers Association helped bring the lawsuit. They said the referendum was a backdoor property tax for all Chicagoans.