Big Money Already Flowing On Both Sides Of Chicago's Real Estate Transfer Tax Battle
Key adversaries in the city’s push to pass a transfer tax on property sales are ramping up their fundraising campaigns and spending efforts with just over two months to go before the referendum appears on voters’ ballots.
The Chicago City Council approved a measure last November to put a revised real estate transfer tax on voters’ ballots in March, with revenue designated for fighting homelessness. That proposal has advocates on both sides lining up money and support in what is likely to be a contentious fight to the finish.
The campaign committee supporting the referendum has raised more than $700K since September, including $200K from SEIU Healthcare Illinois & Indiana and $500K from the Michael Reese Health Trust, Crain’s Chicago Business reports.
The committee has also tapped former executive director of United Working Families Emma Tai to lead campaign efforts that will focus on door-knocking and a phone bank to help voters understand the referendum’s language, Tai told Crain’s.
“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,” she said.
Groups against the measure include the Realtors in Opposition to Real Estate Transfer Tax. Led by the Illinois Realtors group, the organization finished 2023 with slightly over $500 in the bank after spending $125K in the third quarter and $117K in Q4, according to Crain’s. The group spent its Q4 money on mailers and digital advertising.
Opposition spending could soon increase exponentially and by an unknown amount. Campaign veteran Greg Goldner, founder of Resolute Public Affairs, is heading an independent expenditure committee shrouded in anonymity that is asking developers for six-figure sums.
Legal loopholes in Illinois campaign finance laws allow interested parties to contribute to such efforts anonymously without fear of publicly opposing Mayor Brandon Johnson, Crain’s reports.
The proposed tax would create a tiered system that reduces the burden on property sales of less than $1M to 0.6% and ups the rate on sales larger than $1M. The transfer tax on property sales between $1M and $1.5M would be 2%, while the transfer tax on property sales over $1.5M would increase to 3%, quadrupling the current rate.
A University of Chicago study found that sales of nonresidential properties would account for about 75% of the increased revenue the real estate transfer tax would generate.
"This has an impact on neighborhood developments, apartment buildings, job creation," Goldner told Crain's. "A lot of folks are taking a look at what passed and what's on the ballot and feel that there needs to be a response.”
As the money continues to flow in while the tax showdown continues, opposition efforts are ramping up in the legal sphere.
Last week, an industry group that blasted a proposal to hike the tax filed a lawsuit aimed at knocking the measure off the March ballot.
“This referendum substitutes real public policy discussion with a cynical manipulation of voters,” BOMA Chicago Executive Director Farzin Parang said in a release. “It’s time to gather all stakeholders to develop a thoughtful, realistic plan of action that has a real impact on homelessness and improves our city.”
In a statement, Chicago's mayor defended the proposal, also known as “Bring Chicago Home.”
“From the City's perspective, Bring Chicago Home will be on the ballot in March 2024, and Mayor Johnson believes it would create even more much-needed resources to address homelessness in our city and provide support for tens of thousands of our unhoused neighbors," the mayor's office said in a statement.
