Officials threw some more weight behind a potential tax hike that could ding buyers of Chicago’s priciest properties, and netted a city council meeting to discuss the initiative aimed at bulking up funds for fighting homelessness.
Chicago’s city leaders will discuss the resolution, which would increase real estate transfer taxes on property sales of $1 million or pricier by more than triple, CoStar News reported.
It’s been pushed by a group of advocates for policies aimed at reducing homelessness called Bring Chicago Home. The additional taxes would go toward city programs to provide housing for its homeless population, and the group estimates it would raise $163 million annually.
Opponents of the resolution argue it would increase taxes in the city that are already among the most expensive nationally, while inflation and rising interest rates are slowing or evaporating commercial real estate deals.
“The timing of it just couldn’t be worse,” Farzin Parang, executive director of BOMA/Chicago, a trade association for 240 commercial buildings in the city, told the outlet.
Chicago has the second-highest commercial property taxes in the nation, trailing only Detroit. The proposal would also move Chicago up from having the fourth highest transfer taxes in the country, to the second, behind only Philadelphia. Most of Chicago’s transfer taxes are paid by buyers, and that would remain the case for the additional increment, if it passes. 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, respective aldermen for the 49th, first, 47th and 37th wards, called for the Nov. 14 meeting. The four represent areas on Chicago’s North Side that are known for ethnic diversity and a rising threat of gentrification, as well as increasing property values.
Proponents of the tax hike would have convince a majority of the 50-seat city council to send a referendum to voters on whether they support increasing the tax. 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 out of the pockets of a large corporation.
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