How much money is in Chicago’s transfer-tax referendum fight?

When Mayor Brandon Johnson’s proposal to raise property transfer taxes on high-end deals received city council approval in November, it set the stage for a fiery referendum campaign.

As the March 19 ballot approaches, the battle is starting to heat up between the bill’s advocates, who believe it will raise funds to address homelessness, and a real estate industry concerned about its potential adverse effects. Donation money is pouring in on both sides of the fight, Crain’s reported. 

Emma Tai, the former executive director of United Working Families, is leading the pro-transfer tax campaign. After starting with just $48,000 in donations through September, the campaign committee has since amassed over $700,000, including $200,000 from SEIU Healthcare Illinois & Indiana, and $500,000 from the Michael Reese Health Trust. 

Tai hopes to wrangle volunteers behind the movement, to knock on doors, while making calls to Chicago voters to inform them of the issue.

“That being said, we understand that we need to be competitive in all the paid media channels as well — digital, TV, radio, mail — and we are making plans accordingly,” Tai told the outlet.

The anti-transfer tax campaign is led by a group called Realtors in Opposition to Real Estate Transfer Tax, which is affiliated with the Illinois Realtors association. The group closed out 2023 with a mere $500 in its coffers, largely because it spent $117,000 on digital advertising and mailers in the fourth quarter, following a $125,000 investment in the previous quarter, the outlet reported.

The opposition’s efforts could be dwarfed by “dark-money” fundraising led by campaign veteran Greg Goldner, founder of Resolute Public Affairs. Goldner’s strategy allows contributors to shield their identities through legal loopholes. While Goldner remains tight-lipped about specific fundraising figures and strategies, his involvement suggests a formidable opposition effort is underway.

Goldner contends that implications of the proposed tax extend beyond luxury properties, asserting that it could stifle neighborhood developments and impede job creation.

Chicago’s transfer tax — a one-time fee upon purchasing a property — is a flat-rate of 0.75 percent, regardless of price. Under Johnson’s proposal, called Bring Chicago Home, the rate would jump to 2 percent for sales between $1 million and $1.5 million, while rising to 3 percent for transactions greater than $1.5 million. The policy offers a tax break for smaller deals, and the majority of Chicago owners, as the rate would drop to 0.6 percent for property trades under $1 million.

Johnson and his supporters believe revenue from the transfer tax  hike will help fund affordable housing and anti-homelessness measures in Chicago. Conversely, the real estate community fears that the policy would burden a commercial real estate industry that’s already grappling with various challenges, such as high interest rates, record-high office vacancies and subdued sales. 

—Quinn Donoghue 

Read more

Chicago

City Council sends property transfer-tax hike to ballot   

Chicago

Transfer tax campaign scores $200K donation 

Chicago

Business groups sue over Mayor Johnson’s transfer tax proposal