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Chicago voters rejected an increase in the city’s transfer tax on high-value properties in a referendum on Tuesday, with Mayor Brandon Johnson and progressives saying they want to use the new revenue to combat homelessness, the third-highest rate in the country, according to the Associated Press. The Democratic Party’s long-held goal was not achieved. -The largest city.
The results were announced after several days of vote counting, including mail-in ballots, but could not be reported on election day.
Real estate groups had warned that the new fees could be devastating to the downtown office market, which is already losing value and struggling with vacancies.
The vote comes at a politically volatile time in Democratic-majority Chicago, where homelessness has become more visible since the pandemic and an influx of immigrants has strained financial resources. And the results raised questions about the strength of the city’s progressive movement, led by Johnson. The movement has become a dominant force at City Hall over the past decade, mobilizing an army of city volunteers to knock on doors in support of tax changes. .
“Certainly this is a loss for Mayor Johnson and a loss for the progressive movement,” said Dick W. Simpson, a former Chicago City Councilman and professor emeritus at the University of Illinois at Chicago who campaigned for tax changes. Ta.
The referendum called for increasing the transfer tax on properties sold for more than $1 million, while lowering the transfer tax on properties selling for less. Supporters described it as a chance to level the playing field and help the city’s most vulnerable residents. Some call it a “mansion tax,” and versions of that have been approved by voters in Los Angeles and Santa Fe, New Mexico.
“Homeless people are everywhere,” said Jason Rodriguez, 41, a Northwest Side resident who supported the tax change. “It’s common, but it shouldn’t be. No one should be without a home or a place to sleep,” Rodriguez said of the growing number of tent encampments near his home.
Opponents of the tax agreed that homelessness was a problem, but questioned the wisdom and timing of the proposed solution. Office tower owners have already been hurt by the post-COVID-19 shift to remote work. And the city is struggling to keep up with the tens of thousands of migrants arriving in the Chicago area by bus and plane from the southern border.
“This is not a mansion tax. It’s an immigration tax,” said Anthony Beal, a Democratic city councilman from the South Side who opposed the referendum. He said he believes it will have a negative impact on the local economy.
Homelessness has emerged as a top issue in urban areas across the country in recent years, and a variety of responses are being taken. In Minneapolis, where encampment clearances occur regularly, authorities have declared unsheltered homelessness a public health emergency. The city of Sacramento experimented with renting out homeless encampments. Austin, Texas is looking to build more tiny homes. New York City, whose shelter population reached a record high last year, has placed limits on how long some immigrants can stay in city facilities.
Despite these widespread concerns, voters in some areas are unsure whether to approve more spending on homelessness. Many observers say California voters overwhelmingly approved a ballot measure that would require the state to spend billions of dollars to expand treatment centers and supportive housing for people with mental illness and addiction. I expected that. The bill passed, but by a narrow margin, and the campaign was not called until more than two weeks after the election.
In Chicago, Debbie Daniels, 57, a retired accountant who lives on the Northwest Side, agreed that the homeless problem is getting worse. But she said property tax changes will ultimately lead to higher costs for renters like her. And if people can’t pay their rent, there could be more homelessness in the future, she says.
“The landlord is going to force it on us,” Daniels said. “If the tax passes, it’s coming. It’s going to belong to Chicago renters, and we’ll be here forever.”
Different methods of counting the city’s homeless population have yielded widely varying estimates of Chicago’s problem. The city’s annual homeless count, conducted on a single day in early 2023, found about 6,100 people living on the streets or in homeless shelters. The Chicago Coalition for the Homeless, a nonprofit organization that supports tax reform, estimates that about 68,000 people were homeless in the city in 2021, but that number includes people living temporarily with others. It also includes people who have a “concurrent job” in a room with their name written on it. It’s not a lease.
But these counts were done before most immigrants arrived. As of Monday, more than 11,000 of the estimated 37,000 migrants who have come to the Chicago area since June were still living in 23 city- and state-run shelters, officials said. That’s what it means. City authorities began removing some migrants from shelters on Sunday.
Progressives began proposing a tax plan they called “Bringing Chicago Home” in 2018 during Mayor Rahm Emanuel’s tenure, and continued to push it throughout Lori Lightfoot’s four-year term. But it was Mr. Johnson’s election last year that enabled what supporters saw as an opportunity to recalibrate the city’s priorities.
“For the people of Chicago, this is something that has been a long time coming,” Johnson said weeks before the vote. “Two administrations have been quiet, or frankly negligent, but it’s just another day for Chicago. That’s good.”
The vote left open the question of exactly how and by whom the new revenue would be spent. Even if transfer taxes on properties sold for less than $1 million were reduced, supporters estimate that the referendum would generate at least $100 million in additional revenue annually for homeless and affordable housing programs. ing.
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