ADVOCACY: WHERE WE STAND ON KEY REAL ESTATE POLICIES AND ISSUES
The Chicago Association of REALTORS® works every day to protect private property rights for you and your clients, encourage development throughout Chicagoland and encourage policy that ensures the safety of property owners/management and tenants. We take a non-partisan approach to this, working with officials on both sides of the aisle to make sure Chicago’s communities can thrive.
AMENDING THE RLTO
C.A.R. believes the RLTO should protect landlords just as it protects tenants. As a result, CAR supports amendments to the RLTO to allow greater judicial discretion and the elimination of mandatory sentencing for minor offenses.
LOWER TAX RATE FOR AFFORDABLE RESIDENTIAL UNITS
C.A.R. is supportive of Low-Income Housing Tax Credits to incentivize property owners to invest in more affordable housing options. This has proven be more successful and sustainable than proposed rent control measures.
AN AFFORDABLE BUILDING CODE
C.A.R. supports aligning the Chicago Building Code with the International Construction Code, including materials such as plastic pipe and Romex®, because if developers don’t build, REALTORS® don’t sell.
- IN THE NEWS
The new ARO’s early results don’t surprise brokers, who also opposed the new rules, according to Brian Bernardoni, a lobbyist and public policy director for Chicago Association of REALTORS®. “The market is reacting exactly the way we predicted it was going to react, and that’s unfortunate in light of the demand in many markets for affordable rental units,” Bernardoni said. “Developers are realizing that deals can’t pencil under these requirements. And if builders can’t build, REALTORS® can’t sell.”
C.A.R. is an active participant in Mayor Rahm Emmanuel’s building code reform committee. So far, the committee has successfully rewritten the electrical code. It’s expected that the next revamps will be done to the plumbing code and life safety code. Right now, the good news in terms of life safety is that there seems to be no consensus for a mandatory retrofit. A new agenda item includes the conversion of garden and basement units into affordable housing and pre-fab housing.
The committee is optimistic that successful building code reform can be accomplished. This would help in areas such as training, making the code more universal and less localized, and ultimately quicker and less costly.
A FEE TO BE ADDED TO THE WATER BILL TO REMEDIATE LEAD FROM THE WATER
Unlike an increase in the real estate transfer tax, adding a fee to Chicago’s water bills would generate the money needed to remediate lead from our city water. C.A.R. supports this option, as it would be a guaranteed source of income from a greater number of homes and businesses, including those living outside city limits, renters and private property owners.
- IN THE NEWS:
“Brian Bernardoni, senior director of government affairs and public policy for the Chicago Association of REALTORS®, said the proposed 1 percent tax on large real estate transactions ‘won’t even come close’ to generating the money needed to solve the problem. In fact, the annual take could be as low as $20 million, Bernardoni said. ‘There are only 279 listings in the city of Chicago today on realtor.com® this month” that exceed $750,000, Bernardoni said. Instead of putting the burden on high-end real estate, Bernardoni suggested an additional fee on the water bill — on top of the 29.5 percent fee for the Municipal Employees Pension Fund. “If people don’t want lead in the water and they want the problem solved now, let’s deal with it in an effective way that’s strung out across all water users. Every single water bill,” he said.”
- Aldermen Consider $2 Billion Plan to Get Lead Out of City Water – WTTW-TV
The Chicago Association of REALTORS® warns the tax could tank the real estate market – and that a better way to pay for these needed upgrades would be to tack an extra fee onto everyone’s water bill – not charge 1 percent on a home sale of $750,000 or more.“That’s a $7,500 tax, for the benefit of you leaving Chicago. That’s outrageous,” said the association’s Government Affairs Director Brian Bernardoni. “The water bill is something that everyone gets. You attach that fee, amortize it over a longer period of time so everyone’s not getting hit hard. But at least you know there’s a fund and that fund is being used to deal with lead remediation.”
- Aldermen Consider $2 Billion Plan to Get Lead Out of City Water – WTTW-TV
A LIFT ON THE BAN ON RENT CONTROL
C.A.R. is strongly opposed to any form of rent control. Rent control would be destructive not only to the rental and overall housing market, but to the growth of our economy in general. Instead, REALTORS® pledge to work with state and local policymakers and urge them to take a more positive, innovative, forward-thinking, pro-development approach that would keep the existing market healthy and spur new affordable housing development.
- ADDITIONAL RESOURCES ON RENT CONTROL:
“We’re opposed—heart, stop!” says Brian Bernardoni, who heads government relations for the Chicago Association of REALTORS®.
“But rent regulation is not a tool that many economists and realty professionals want to pull out of the tool kit. In fact, Brian Bernardoni, senior director of government affairs and public policy for the Chicago Association of REALTORS®, likens it to ‘throwing a hand grenade on your lawn to get rid of dandelions.’ ‘This is a ‘good politics, bad economics’ kind of discussion,’ he said. ‘If you just introduce a rent control provision, but don’t look at property taxes, don’t look at building codes, don’t look at density, it blows up everything and that’s why we’re unequivocally opposed to it in Springfield.'”
“If the movement wants to go towards locking rents, and there aren’t locks on rising property tax, rising utility taxes, and utility costs, what happens to the owner?” Brian Bernardoni, Senior Director of Government Affairs and Public Policy for the Chicago Association of Realtors (CAR), told the Weekly. “The owner can’t just make up that money. The owner has no other choice but to sell, or stop investing in the building.”
- Chicago Tribune: Rent control would benefit some tenants, but sap vitality from Chicago“In Chicago today, price controls on housing would allow some renters to stay in place, but it would tighten supplies by enticing landlords to convert units to condos or sell to owner-occupants. Apartment owners also would be less likely to invest in their properties, spending less on upkeep because rising overhead costs wouldn’t be offset by rising rents. Investors would look elsewhere. As the value of rent-controlled apartment buildings stagnates, property tax revenue would decline.”
- The Chicago Sun-Times: High rents are a problem. Rent control is not the answer.“Chicago does not need to wade into the quicksand here. Given the uncertain ramifications of rent control, our city and state could move forward, right now, on better ways to make rents more affordable…Rent control is an overly blunt tool. It could do more damage than good. But about this there is no debate: Chicago needs more affordable housing.”
INCREASES TO THE REAL ESTATE TRANSFER TAX
C.A.R. opposes an increase in the real estate transfer tax to address the issues of homelessness, lead pipes and fire and police pensions. The revenue generated from the increased tax does not yield enough to address these crucial issues, and adds a greater burden to homeowners.
In 2018, C.A.R. was an integral partner exposing the dangers of proposed transfer tax increases. As a result, an increase in transfer tax was not a ballot measure in the 2018 Midterm elections and proponents have also missed the deadline to appear on the 2019 February and April ballots.
- IN THE NEWS
“Brian Bernardoni, senior director of government affairs for the Chicago Association of REALTORS®, said the transfer tax is a poor vehicle for funding homeless programs because of fluctuations in property sales, and he argued the city just could divert the money to programs other than homeless services.”
“Instead of arguing self-interest, however, the Chicago Association of REALTORS® will oppose the tax hike on the basis that wide fluctuations in annual transfer tax collections make it an unpredictable — and therefore unreliable — funding source for homeless services, said Brian Bernardoni, the group’s senior director of government affairs. Bernardoni also argued there is no guarantee the city won’t just take the money that now pays for homeless services and use it to pay for other expenses.”
Proposed “Just Housing Amendment” Rules
The Just Housing Ordinance was put in place to prevent potential tenants from being discriminated against due to their criminal history. CAR opposes the proposed rules for the “Just Housing Amendment” for the following reasons:
- They’ll make it difficult for property owners and managers to screen, evaluate and make safety determinations on potential rental applicants.
- The proposed rules call for a three-year lookback period, which is not a reasonable amount of time.
- The “Opportunity to Dispute” rule that is proposed would require the property manager to keep a unit open for an extended period, as the applicant disputes findings to their criminal record that may or may not be a mistake.
While we believe in creating housing opportunities for all, these rules appear to be counterproductive and damaging to private property rights.