On June 12th, we held our monthly “Coffee with Your GADs” chat, where members join our Government Affairs Director Brian Bernardoni for an informal discussion about policy and politics impacting the real estate industry. This is an opportunity for members to learn about CAR’s current advocacy initiatives and share any news or trends of interest.
Following a successful legislative session in Springfield, this month’s meeting largely focused on state and local issues:
Local Public Policy Issues
Derailing Assessors’ Tax Reform Package
One of the biggest successes of the spring session was derailing the Cook County assessor’s tax reform package. Because of his background in property taxes, Brian Bernardoni was brought into many of the meetings regarding the assessor’s plan, “You can’t finesse appeals,” Bernardoni said. “You can’t get into speculative assessment and expect to garner the support that you need to.” When legislators asked the assessor’s office for data that supported his plan, the office was unable to furnish any, stating that data would only come once the plan was implemented. As a result, the bill did not pass in the House. Bernardoni called part two of the assessor’s agenda “more egregious.” The assessments in the northern townships are at a record level high. While the assessor initially said he wouldn’t support rent control, he has since increased assessments for multi-unit buildings by triple digits. For example, a vacant commercial property saw a 900 percent increase in Evanston recently. These decisions actually propel rent control. The assessor is also rejecting more and more of the assessment appeals (e.g., vacancy credits no longer exist). This leads to higher assessments for commercials and multi-unit residential properties in a “historic and negative” way, Bernardoni said. While the assessor’s plan is to increase taxes on commercial and vacant lots to help residential properties, these increases create a greater burden for the property owners who, in turn, have to increase rents and thus make it less affordable for would-be renters. These tactics increase vacancies, decrease jobs and hurt communities. This causes great concern as we approach 2021, when the city of Chicago will be reassessed. The assessor’s office claims these rates will adjust to make up for the increased assessments, but in reality, the rates won’t adjust enough to make up for historic high assessments. While CAR is working hard to prevent these increases, there is strong resistance for collaboration from the assessor’s office.Taking a Look at Criminal Background Checks
How we do background checks for tenants in multiunit buildings is slated to change dramatically. Everything from lookback periods to the appeal process will be affected under a new ordinance that seeks to give greater protections to those with criminal backgrounds. CAR, along with many other organizations, is currently involved in the rulemaking process for the ordinance. This process asks many substantive questions, like if a property owner can keep a unit available for rent if a prospective tenant has a criminal history and has not yet completed the background check. Discussions are expected to go into August 2019. As more concrete rules are developed, CAR will inform members and request feedback. There is a possibility that if the rules do not get passed, the ordinance will not be able to operate. As it stands, CAR remains neutral as rules are developed and questions are answered.Canceling Aldermanic Prerogative…Almost
Mayor Lightfoot’s first executive order was to remove aldermanic prerogative for everything, except for zoning. CAR was hoping zoning would be included, particularly to take care of zoning-related issues where the city has an investment in affordable housing.New Chairpersons
The mayor has appointed new committee chairpersons. The most important for our industry include the Committee on Housing and Real Estate and the Committee on Zoning, Landmarks and Building Standards. Harry Osterman is the chair of the Committee on Housing and Real Estate. The committee itself is balanced with progressives and CAR-backed, market-based aldermen. The Committee on Zoning, Landmarks and Building Standards is now chaired by Alderman Thomas Tunney and its committee members are largely supported by CAR. CAR is confident in the relationships we’ll have with both committees.Monitoring Workforce Scheduling
The International Council of Shopping Centers (ICSC) has been monitoring the issue of workforce scheduling. One particular part of the ordinance, which includes buildings services, is of importance to CAR. In buildings with 250 or more employees, the ordinance requires that someone is on-call during normally unscheduled hours, to cover janitorial and maintenance issues. This would be an increased cost for larger property management companies. CAR doesn’t fully oppose this issue, but we are seeking clarity.Continuing the Pet-Friendly Initiative
CAR is working closely with our Industry Partner Real Estate to the Rescue on a public service project called the Pet-Friendly Initiative. Tenants are giving pets to shelters, as landlords make new rules about pets in their buildings. The goal of the project is to give shelters a list of properties that accept pets, so tenants can move into these properties or offer pets to tenants of those properties. This project has been around for a while but hasn’t gotten much traction. CAR is now working with a large property management company, which currently accepts pet rent, to help other buildings adopt a similar model and better market themselves. CAR is so focused on this because there were talks of the city developing an ordinance that would address the issue of overcrowded shelters and non-pet friendly buildings. Before the city does this, CAR believes it’s in everyone’s best interest to develop a set of best practices to protect properties, pets and pet owners.Maintaining a Right to Lobby Under the Ethics Ordinance
CAR, along with Association Forum, is fighting an ethics ordinance put forward by the mayor. It would require individuals and nonprofits lobbying City Hall to register as a lobbyist. This means even those advocating for use of English basements or more affordable homes for seniors and veterans, for example, would need to register. CAR believes REALTORS® should be able to conduct business, under the First Amendment, without having to register and be subject to additional fines.Welcoming a New Housing Commissioner
Marisa Novara is the city’s new housing commissioner. A resident of the Near West Side, Novara has an extensive and impressive background in housing policy. This will be her first role with greater responsibility for housing development.State Public Policy Issues
- Rent control is dead for now and did not pass in the last session. It could be brought up again come fall session, but its failure to move forward thus far is a great start.
- CAR supports the Affordable housing tax reform package. While it was sent to the Rules committee, it did not pass in the spring session. In short, CAR supports making a new classification for affordable housing, so these units aren’t assessed the same as other properties within the area.
- Real Estate License Law passed. The state will put out a list of changes soon, and they’ll be shared during the July Coffee with Your GAD meeting.
- The increase in transfer tax, which could have been up to 161 percent, did not pass, thanks to strong testimonial and opposition from CAR and the Illinois REALTORS®.
Federal Public Policy Issues
- The National Flood Insurance Program (NFIP) received another extension through September 30th. CAR supports a long-term reauthorization, as well as reform of the program.
- CAR is working with state and federal officials to request an increase in the Conforming Loan Limits. Previous requests for an increase were denied.
What’s Next?
- Get the latest in public policy news at the next Coffee with Your GAD meeting on July 2nd. Register now!
- Check your mailbox. A more comprehensive advocacy update is in the summer issue of Chicago REALTOR® Magazine.
- You have until June 30th to take on a leadership role with CAR and get more involved in our public policy and advocacy initiatives. Apply today!