A group of Democratic lawmakers is renewing a push for Mayor Lori Lightfoot to agree to dedicate a significant portion of revenue from her real estate transfer tax plan to initiatives to combat homelessness in Chicago.
Lightfoot’s graduated real estate transfer tax plan would have wealthier homeowners paying more on property sales. The first-year mayor campaigned on the issue and it was among her top requests of the legislature last year.
The chances of that plan advancing appeared tenuous going into the fall session, however, and it flamed out when a group of progressive Chicago-area lawmakers said they wouldn’t support it without a significant percentage of the new revenue going toward homelessness initiatives. Lightfoot said at the time the request for 60% of the plan’s revenue to go toward homelessness is “never going to happen, obviously,” because of the city’s budget constraints.
The latest proposal was put forth Tuesday by 33 Democratic lawmakers who called it a “compromise,” noting it would allocate revenue from the transfer tax to both patch the city’s budget hole and provide homeless services. Talks with Lightfoot’s administration have been ongoing since the fall session adjourned, according to lawmakers, who expressed optimism that some form of the tax plan would advance in the General Assembly this spring.
“This puts what we’ve been discussing in meetings into writing. It allows the opportunity to use it as a starting point,” said Sen. Ram Villivalam, a Chicago Democrat.
Lightfoot campaigned on increasing affordable housing options in Chicago by adjusting the city’s real estate transfer tax so wealthier homeowners pay more.
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The rate structure laid out in legislation filed Tuesday adjusts the rates in Lightfoot’s proposal on properties sold within city limits for more than $3 million. Its backers say the proposal would generate an estimated $88 million to help plug the city’s deficit, while funneling an additional $79 million toward homelessness initiatives.
For property sales between $3 million and $10 million, the rate would be 2.8% for the portion of the sales price that exceeds $3 million. For property sales greater than $10 million, the transfer tax rate would be 4%, applying to the portion of the sale over $10 million. Lightfoot’s proposal would have applied a 2.55% rate to that highest bracket.
Lightfoot spokeswoman Lauren Huffman said the administration is in discussions with the Bring Chicago Home coalition “on ways to partner on a legislative proposal that generates progressive revenue and responds to the needs of all our most vulnerable communities, including homeless residents.”
Edrika Fulford, a volunteer advocate at the Chicago Coalition for the Homeless, said 86,000 people are affected by homelessness in Chicago. The estimated $79 million for fighting homelessness could go to affordable housing and services like job training, budgeting guidance and mental health support, Fulford said. Unlike temporary shelters, which Fulford described as a “Band-Aid,” these services help formerly homeless people avoid returning to homelessness once they have attained permanent housing.
“You can get a house, but you need the services in order to maintain it,” said Fulford, who has previously experienced homelessness. She hopes the legislation will create a dedicated revenue stream — one that is not vulnerable to budget cuts and changes in administration — for pursuing long-term solutions in Chicago.
Chicago Tribune’s Gregory Pratt contributed.
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