Where Chicago mayoral candidates stand on real estate

With less than two weeks to go before Chicago chooses its next mayor — or at least who to send to a runoff — it’s a tight race between the top three candidates, and real estate is paying attention.

“This election, with the amount of turnover on the city council coinciding with the mayor’s race, it’s a really historic opportunity for the mayor to seize on housing and realize that it offers a path to grow the city,” Illinois Realtors CEO Jeff Baker said in an interview with The Real Deal.

Incumbent Mayor Lori Lightfoot, former Chicago Public Schools CEO Paul Vallas and U.S. Rep. Jesus “Chuy” Garcia are polling at the top and within a few points from one another. Unless one of the nine candidates for mayor tops 50 percent of the vote on Feb. 28, the race will head to a runoff between the leading two candidates on April 4.

And at least one voter with real estate interests, broker and multifamily investor A.J. Manaseer, supports Vallas but has wondered aloud on Twitter whether to strategically vote for Lightfoot in Round 1 in order to lock out “anyone left of her,” who he described as Brandon Johnson and “arguably” Garcia, from the runoff.

Illinois Realtors and another trade group, the Building Industry Association of Greater Chicago, are holding back on endorsing anyone in the Feb. 28 election in favor of waiting until the runoff to consider doing so.

“I think that you may see us take a little more active role when the runoff comes.  We’ve been more of a watch and see at this point,” building association lobbyist Paul Colgan said. “From our perspective, home ownership is key, and really trying to understand where people are going to be on home ownership. We see home ownership as bigger than just government programs.”

Political donations don’t show a clear consensus within the industry among the three frontrunners, either. Lightfoot bagged $25,000 from Marcus & Millichap founder and Democratic political donor George Marcus and has maintained the financial support of trade and carpenter’s unions, while Vallas received a $100,000 donation from billionaire real estate mogul Sam Zell (Zell’s company, Equity Group Investments, didn’t return an interview request).

Vallas’ stances on hot topic real estate issues, such as property taxes, just cause eviction and rent control, aligned the most of the three with the realtors’ group positions, according to the candidates’ responses to a questionnaire form the Chicago Association of Realtors and Illinois Realtors in January, while Garcia’s diverged the most of the three.

The candidates aren’t without similarities. With access to affordable housing as a major issue, all three espouse transit-oriented development, expanding a pilot program allowing additional dwelling units in 21 wards citywide and easing parking and design regulations and boosting density to encourage the construction of affordable and workforce housing. 

Differences emerge on the proposals the candidates have offered to expand the city’s housing stock, as well as on tax policy and on the best ways to encourage development.

“They all agree that housing is a priority and agree that more needs to be done to promote housing. Where you start to see disagreement is how do you execute on that and how do you prioritize that as a public policy fashion and where do you allocate limited resources,” Baker said.

Moving dirt

While Lightfoot administration initiatives Invest South/West and LaSalle Street Reimagined put public funds into redevelopment proposals for city-selected corridors, her challengers say they want more community involvement in those decisions.

Vallas says he would create an Independent Community Development Authority made up of contractors and community development organizations to free those decisions from City Hall politics.

His platform also includes requiring a dedicated portion of all new revenues from tax increment financing districts and all developer fees to be dedicated to investments on the South and West sides and forming a municipal investment fund that would hold the dedicated funds for development projects and extend commercial and mortgage loans.

Garcia says the Invest South/West program must be reformed so that it is “led by community voices and complements each community’s own vision,” adding that each project must be sustainable and have broad economic impact.

Lightfoot, meanwhile, touted Invest South/West at a Friday groundbreaking for a $68 million industrial logistics project in North Lawndale by Related Midwest and A.J. Patton’s 548 Enterprises that was supported by the program and city approvals of $8 million in tax increment financing assistance and the sale of 21 acres of city-owned land for $1 per lot.

Managing income

Real estate professionals have cited high property taxes as one of their top issues, and politicians seem to be listening.

Lightfoot and Garcia support tying property taxes to the consumer price index, which Vallas and the realtors’ group oppose.

Vallas has vowed to repeal the automatic property tax escalator that allows Chicago’s mayor to raise property taxes by 5 percent or the inflation rate, whichever is lower. 

Lightfoot said in August that the city would lower the CPI to the five-year CPI average of 2.5 percent to give homeowners and businesses some relief amid rising inflation, the Sun-Times reported. 

Garcia has proposed an emergency city grant program for small residential and commercial property owners impacted by significant changes in assessments, as well as residential property owners unable to pay their full tax bill.

Garcia has also said he supports Bring Chicago Home, a measure proposed by housing advocates and supported by progressive City Council members to raise the real estate transfer tax on properties over $1 million to fund homelessness initiatives. 

Lightfoot and Vallas oppose the measure, putting them in line with property owners who have called it a deal killer.

Gimme shelter

In 2021, the city enacted Lightfoot’s proposal the number of affordable apartments or condo units required to be built per complex in certain neighborhoods to 20 percent of the development’s total units. 

While the change to the city’s Affordable Requirements Ordinance came after a report showed an affordable housing shortfall of almost 120,000 homes, some developers say it makes it harder to make their projects pencil out. The updated ordinance also allows developers to pay to the city’s housing fund to opt out of the requirements.

Garcia says he would strengthen the ordinance to optimize funds it has generated in communities that need development, while Vallas says he would create a city land trust that would take control of abandoned and vacant residential buildings and support their development.

Both challengers have said they would use tax increment financing funds to fund their housing plans — Vallas for development and Garcia for grants and subsidized loans to help homeowners in gentrifying neighborhoods. Lightfoot’s administration has also used TIF funds for development projects.

There are also some differences on landlord-tenant issues, according to the realtors’ group questionnaire. Garcia supports increasing the leeway for rent control — in 2020 he called for Illinois to lift a statewide preemption of rent control laws to allow communities to decide whether to prohibit or limit landlords from increasing rent — while Vallas and Lightfoot joined with the trade group in opposing it.

Vallas was the only candidate of the three who said he fully opposes just cause eviction, which lines up with the realtors’ group’s concerns about tenant protections turning into a regulatory minefield that makes it harder to provide housing.

Overall, Baker said the group is still focused on getting their message to the people vying to be Chicago’s next mayor.

“I think there’s still work to do among all of the top-tier candidates in helping them understand if you prioritize housing, you’re going to see positive results in all of the other policy areas that you’re concerned about,” he said.