Officials gave a little more weight to a possible tax hike that could affect buyers of Chicago’s most expensive properties and called a city council meeting to discuss the initiative to raise funds to fight the homelessness.
Chicago city leaders will discuss the resolution, which would more than triple real estate transfer taxes on property sales of $1 million or more, CoStar News reported.
It was pushed by a group of policy advocates to reduce homelessness called Bring Chicago Home. The extra taxes would go to city programs to provide housing for its homeless population, and the group estimates it would raise $163 million a year.
Opponents of the resolution argue it would raise taxes in the city that are already among the most expensive nationally, while inflation and rising interest rates slow or evaporate commercial real estate transactions.
“The timing couldn’t be worse,” said Farzin Parang, executive director of BOMA/Chicago, a trade association of 240 commercial buildings in the city.
Chicago has the second highest commercial property taxes in the nation, behind Detroit. The proposal would also move Chicago from fourth in the nation’s highest transfer taxes to second, behind only Philadelphia. Most Chicago transfer taxes are paid by buyers, and that would still be the case for the incremental increase, should it pass. Buyers now pay $3.75 for every $500 of a transaction’s value, and sellers pay $1.50.
Maria Hadden, Daniel La Spata, Matt Martin and Carlos Ramirez-Rosa, aldermen for the 49th, First, 47th and 37th Wards respectively, called the November 14 meeting. The four represent areas on Chicago’s North Side known for their ethnic diversity and a growing threat of gentrification, as well as rising property values.
Proponents of the tax hike have reportedly convinced a 50-seat city council majority to send a referendum to voters on whether they support the tax hike. They used Google’s purchase of the Thompson Center this summer as an example of a deal that would have generated $2 million for homeless services in the pockets of a big corporation.