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Chicago’s mayor not giving up on failed tax hike on real estate

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(The Center Square) – Chicago Mayor Brandon Johnson vows to continue with his agenda despite an apparent defeat of his Bring Chicago Home referendum this week.

The measure, which would have increased the city’s real estate transfer tax on properties over $1 million and, according to Johnson, use the funds to pay for homelessness programs, now appears to be rejected by voters. Fifty-four percent of voters said “no” to 46% “yes” with 98% of precincts reporting.

“All the votes have not been counted so it has not been declared just yet,” Johnson said. “Look, there are 68,000 people unhoused, that’s the focus.”

The defeat is also a blow to the Chicago Teachers Union, which bankrolled the effort and took students out of school to vote for the referendum, which critics blasted as illegal electioneering. Reports surfaced that the Chicago Teachers Union was looking for funding to subsidize housing so teachers would choose to live in the city.

Opponents said Johnson never revealed a specific plan on how the money would be spent, and pointed to Los Angeles which passed a similar tax that caused a slowdown in the real estate market. That tax is facing repeal in the November election.

A study released by the Neighborhood Building Owner’s Alliance shows that the “Bring Chicago Home” tax increase would likely lead to higher rents. Because the tax increase would reduce the proceeds from the sale of a building, three out of four respondents (74%) indicated that the measure would make them more likely to raise rents.

Corey Oliver, chief operations officer of the Community Venture Investment Corporation, said property values have been going down and the tax would have made things worse.

“You got to believe that even buildings that are transacting are going to transact for thousands and millions of dollars less, which is going to create a situation where the assessor is going to have to reassess the value of properties and you are going to start losing tax dollars across the board,” Oliver said.

Johnson was asked about the possibility of a property tax increase to make up for the money that won’t be coming from an increase in the real estate transfer tax. He said it is not something he is considering.