Chicago voters are faced with a choice over taxes to fund homeless programs

Voters in Chicago will consider a ballot measure Tuesday that progressive Democrats see as a solution to homelessness.

The proposal would allow the City Council to increase property tax revenue to help fund programs to get people off the streets. But the vote will be about much more than that.

The ballot measure has sparked debate about downtown’s sputtering recovery, the influx of migrants that has strained city services and political coalitions, and the wisdom of entrusting Mayor Brandon Johnson and his fellow progressives with more taxpayer money.

One topic is not disputed: homelessness is a problem in Chicago.

“Everyone in the city probably agrees: We have to do something about our housing crisis, about our homelessness,” said Farzin Parang, executive director of the Building Owners and Managers Association of Chicago, which is leading the opposition to the proposal . The group says the new tax would deal another blow to an office real estate market still mired in a post-pandemic vacancy crisis.

The voting question is long and nuanced. If approved and implemented, it would reduce the transfer tax on properties sold for less than $1 million, but impose higher rates on homes and commercial buildings sold for more than $1 million. The additional money — supporters say it would be at least $100 million a year — would be spent on addressing homelessness, with the details of that spending to be finalized later.

Tuesday’s vote is the culmination of a longstanding goal for Chicago’s progressive movement, which over the past decade has dethroned moderate Democrats and transformed from a band of scrappy political outsiders into the City Hall establishment.

The election last year of Mr. Johnson, a former labor organizer who placed property tax change in his campaign platform, has amplified this shift.

“This is the result of organizing,” said Anthony Quezada, a county commissioner on Chicago’s Northwest Side, who supports the measure. “What happened in the city of Chicago is nothing short of a political revolution of sorts.”

But Chicago has changed in other ways since progressives first introduced higher tax rates for housing programs in 2018.

Homelessness has become more visible and larger tent camps are popping up in more places. The Downtown Loop, which was a bustling city before Covid, is still struggling with empty storefronts and rising office vacancies. And over the past 18 months, as Republican officials in Texas have sent thousands of migrants to Democratic-run cities, Chicago has been overwhelmed and the liberal coalition has crumbled.

More than 37,000 migrants have arrived in the Chicago area, and thousands of them continue to live in government-run shelters. As much as many proponents of the ballot measure have tried to focus the tax conversation on other issues, the immigrant issue has reframed the debate.

“You can’t trust that the city is going to use that money for the goals they set out to do — helping homelessness,” said Edward Boone, 69, a retired health care worker and Democrat who said he planned to vote against the tax. “Maybe they can talk about the homeless immigrants that are in town.”

Mr. Boone, who rents a home in the Hermosa neighborhood, said he worried the tax change could lead landlords to charge higher rents. He also said he was frustrated that the City Council authorized a vote on the tax issue, but not on a proposed ballot measure that would have asked voters if they wanted it. remain a ‘sanctuary city’.

Others see the tax change differently. Annelise Rittberg, 28, who recently participated in a march in support of the measure, said the stakes of the issue became clearer to her when the heat in her home near Humboldt Park, northwest of downtown, went out for a while this winter.

“That was just some inconvenience and the fact that I was in an environment that wasn’t safe,” said Ms. Rittberg, a political independent who works for a nonprofit. “And all I could think at that moment was: there are dozens of people living in the park across the street from my house, who also do not have access to a warm and safe place.”

Homelessness and housing affordability have long been challenges in Chicago, the nation’s third-largest city. But these problems have manifested differently than in some fast-growing Western cities facing housing shortages. Chicago’s population, some 2.7 million residents, has been relatively stable in recent years, and some neighborhoods are littered with vacant homes.

Different ways of counting the homeless population have produced vastly different numbers. Annual city counting homeless people, conducted on a single day in early 2023, showed that approximately 6,100 people were living on the streets or in shelters. The Chicago Coalition for the Homeless, a nonprofit that supports the tax change, estimated that about 68,000 people in the city were homeless in 2021, a figure that includes people “doubling up” in a unit or living temporarily with others.

But those counts were done before most migrants arrived. On Sunday, officials said nearly 11,000 of the estimated 37,000 migrants who have come to the Chicago area were still living in 23 shelters run by the city or state.

With the major parties’ presidential nominations already finalized, both sides of the tax debate have been scrambling to get their voters to the polls in what could be a low-turnout Illinois primary.

Increasing the transfer tax, also known as ‘mansion tax’, is not a new idea. Los Angeles voters approved a higher land transfer tax in 2022 to fund affordable housing and homelessness programs. A similar measure was approved by the voters in Santa Fe, NM, last year. Supporters in Chicago see the vote as an opportunity to reorder the city’s priorities.

“We simply cannot and should not live in a place where an industry can make money from housing and real estate, while there are people who have no place to stay,” said Asha Ransby-Sporn, deputy campaign director for Bring Chicago Home. , a group leading efforts to pass the tax.

But the timing couldn’t be worse, according to opponents.

Jeff Baker, the CEO of Illinois Realtors, which opposes the tax change, said the referendum’s passage would “immediately inject even more uncertainty and downward price pressure” into Chicago’s struggling office real estate market. And he said that could ultimately lead to higher property taxes and rental prices, even for people who wouldn’t pay the higher real estate transfer tax directly.

“I think in the long run,” Mr. Baker said, “you’re looking at even more housing instability and even higher costs of living in the city.”