Over the last few months, the Chicago Association of REALTORS® Government Affairs team has been working to educate City Council members about the negative ramifications of an increase in the transfer tax.
On Monday, November 14, there was a scheduled hearing on the “Bring Chicago Home,” or Real Estate Transfer Tax Proposal. Any transfer tax increases must be placed on a ballot for voters but prior to making the ballot City Council must approve referendums. The proposal, as presented, would have increased Chicago’s Real Estate Transfer Tax on transactions of $1 million or more from $3.75 per $500 of transfer price to $13.25 per $500 of transfer price. The entirety of the increase ($9.25 per $500) would be allocated to the Homeless Transfer Tax Fund, and buyers would be responsible for paying the tax. This would be a 253% increase on $1 million real estate transactions.
At the hearing, quorum was not reached three times so the issue did not move forward. REALTORS® along with a broad coalition of other industry professionals, shared our concerns and used data to show alderman which properties this proposal would affect in their ward highlighting the far reaching impact of an increase. Among the highlighted points is how significant costs would be passed on to tenants, both residential and commercial.
Further, the city did not spend at least $98 million of funding approved for homelessness in 2022. Going into 2023, $200 million will be devoted to homelessness and affordable housing initiatives. Funding exists and needs to be thoughtfully spent.
As REALTORS®, we understand the importance of housing, and we stress the priority of working on long term, sustainable solutions for homelessness. The Chicago Association of REALTORS® is working to provide alternatives for alderman for a long-term funding mechanism to help house the homeless.