Mayor Brandon Johnson introduces plan to combat homelessness

Mayor Brandon Johnson introduced much-awaited legislation on Thursday that would increase the real estate transfer tax for properties sold for more than $1 million to raise funds for homeless services.

Why it matters: Advocates say the proposal, known as Bring Chicago Home, could potentially raise $160 million annually to address homelessness with new permanent housing and wraparound services, including mental health and substance use counseling.

How it works: The proposed ordinance, an updated version of a plan Johnson campaigned on, would significantly raise real estate transfer taxes — paid by property sellers — for buildings sold for more than $1 million, while slashing them for properties that sell for less than that by 20%, advocates say.

• Buildings that sell for between $1 million and $1.5 million would see taxes rise by nearly 167% but just on the portion over $1 million.
• Properties that sell for more than $1.5 million would see taxes spike by 300%, applied only on the portion above $1.5 million.

Context: The original proposal placed a flat tax on the full amount of properties sold for more than $1 million, but was modified with Johnson's blessing last month.

By the numbers: Homeless advocates say 68,000 people in the city are experiencing homelessness.

What they're saying: "I don't want anybody to feel like I felt: terrible, ashamed and embarrassed," BCH organizer Electa Bey, who has experienced homelessness, said at a press conference Thursday. "We don't need to be embarrassed about homelessness, we need to fight it."

• Johnson told Axios he's "very confident" the measure will make it through the council to a March 2024 ballot referendum.

The other side: Representatives of the commercial real estate industry warn the proposal jeopardizes their already vulnerable sector.

• "Downtown office buildings are experiencing record vacancy and loss in value, with enough empty space to fill 16 Willis Towers. With no downtown office building sales this year — a key generator of transfer taxes — we can't think of a worse time to quadruple this tax," Farzin Parang, executive director of Building Owners and Managers Association of Chicago, tells Axios.
• "We look forward to the opportunity to engage with the mayor and other stakeholders to develop better solutions to address homelessness."

What's next: If the proposal passes through committee, it would go to a full Council vote before being placed on a ballot referendum in 2024.

• If approved by voters, it would return for a final vote in the City Council to make it law.