City Council Delays Chicago Real Estate Transfer Tax Vote

Chicago City Council delayed a vote Wednesday on an ordinance that would ask voters to decide if they want to increase Chicago’s one-time transfer tax on high-end property sales to fund policies combatting homelessness.

The city's rules committee approved the “Bring Home Chicago” measure by a 32-16 vote Tuesday, setting up a final city council vote on Wednesday that would lead to a March referendum. But in a procedural move, its supporters put off the vote until a council meeting that will be scheduled for next week, Crain’s Chicago Business reports.

Chicago

Despite the delay, this week marked a major win for Chicago Mayor Brandon Johnson and his allies since clearing the subcommittee hurdle all but assures the measure will make it through a full city council vote. The subcommittee consists of the entire 50-member body of the council.

“Today, we moved one step closer to fighting homelessness for thousands of unhoused Chicagoans,” Johnson said on X, the platform formerly known as Twitter. “It's time to Bring Chicago Home.”

Critics in the business community and real estate interests argue that the increased tax will stifle activity in an already anemic commercial real estate market.

The tax “will worsen this crisis and impose costs on everyone in the city,” Farzin Parang, executive director of the Building Owners and Managers Association of Chicago, told Bloomberg.

The proposal would create a tiered system that lowers the tax for property sales below $1M to 0.6% and increases the rate on sales larger than $1M. The transfer tax on property sales between $1M and $1.5M would be 2%, while the transfer tax on property sales over $1.5M would increase to 3%, quadrupling the current rate.

The city would spend the estimated $100M in additional tax revenue to support policies to fight homelessness, though the precise allocation of funds is to be determined — a factor that has angered some opponents.

Alderman Brendan Reilly, who voted against the measure on the subcommittee, said the mayor’s office and various city departments didn’t provide a clear answer on how the city has previously spent money allocated toward aiding the unhoused, the Real Deal reports.

“That’s my concern here,” Reilly said, per TRD. “We’re going to ask folks to pay more taxes for another $100M, yet I still can’t get a straight answer on where the $200M we allocated for this year has gone, where it’s been spent and if there’s been a return on investment.”

It appears likely that the full city council will approve the measure and put the referendum on voters’ ballots, where it will take a simple majority to pass. If approved, the council would need to pass a different ordinance next spring to codify the tax and specify where new revenue would be spent, Crain’s reports.

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