The Gate

During the Primary Election on March 19th, just over half of Chicago voters struck down the highly disputed Bring Chicago Home referendum which sought to address Chicago’s homelessness crisis. Regardless of the controversy surrounding the referendum, the election had the lowest turnout in any Chicago election since 1944, with only 20% of eligible voters casting a ballot. Voters were likely less motivated to get to the polls given that Biden and Trump were already their parties’ presumptive presidential nominees. Even though the referendum was not a major mobilizer, the failure of the policy has forced Johnson to consider alternative solutions.

The Bring Chicago Home referendum planned to increase the real estate transfer tax–a one time tax that buyers pay when purchasing a property–on properties over $1 million while lowering the tax on more affordable housing. The current real estate transfer tax in Chicago is a flat 0.75% for all property sales, meaning that under the new plan, the tax would decrease to 0.6% for properties under $1 million, rise to 2% for properties between $1 and $1.5 million, and increase to 3% for any property over $1.5 million. According to the proposal, the profits from raising the tax on higher-end properties would both cover the loss of revenue by lowering the tax on cheaper properties and could be used to support other government projects to alleviate homelessness.

This proposal came as a result of Mayor Brandon Johnson’s push to decrease homelessness in Chicago, which has spiked due to the high volume of migrants entering the city. There are around 68,000 people experiencing homelessness in Chicago and a little over 17,000 of them are students in Chicago Public Schools. As the city continues to expand, weather gets more severe, and the population continues to increase, the homeless crisis becomes an even bigger priority for the Chicago government. While this crisis is not a new issue, Mayor Johnson’s proposed solution isn’t either. In fact, during her administration, former Mayor Lightfoot initially supported a similar measure, even suggesting that a change to the transfer tax should be implemented at the state level. Yet, Lightfoot lacked the support necessary to pass this measure and has since opposed the policy, supporting other mitigation measures instead. 

Many Chicagoans seemed to follow Mayor Lightfoot’s logic: They agreed with the premise of the referendum, but disagreed with the policy itself, with many fearing profits from the tax increase would be misused. In addition to disagreement from the public, the referendum also faced some legal challenges. Originally, the city council voted 32-17 to put the measure on the ballot. Shortly after, however, the Building Owners and Managers Association, which is the group that currently controls over 70% of Chicago’s affordable housing, sued the Board of Elections, arguing that the referendum improperly and misleadingly combined a tax decrease and a tax increase within the same proposal. While a Cook County judge originally supported the Building Owners and Managers Association, the First District Appellate Court later overturned the ruling. While the referendum eventually made it onto the ballot, its supporters cited the referendum’s challenging beginnings as the reason for its failure. Mayor Johnson argued that the legal challenges detracted from his campaigning for the policy: “I wanted to campaign more. Heck yeah, I wanted to be out there. I wanted the ball.”

The grassroots campaign, which supported the referendum and included homeless and formerly homeless people, union and religious leaders, social service providers, community organizers and other volunteers, reflected Mayor Johnson’s passionate support for the policy.  In total, the group of supporters knocked on over 300,000 doors and made over 600,000 calls, reaching constituents in all 50 wards. The campaign emphasized the referendum’s potential positive outcomes including increased access to social services, more affordable housing, and greater investment into underserved communities.

The original purpose for the referendum as well as its biggest positive impact would be the creation of more affordable housing. According to proponents, the transfer tax increase would generate an estimated $1 billion in added revenue for the city. Using these funds, the city could house over 7,600 families, while also providing 15,000 individuals with homelessness prevention assistance. The new affordable housing developments would be city-funded, which is different from traditional public housing in Chicago that is federally funded and run by the Chicago Housing Authority. Bring Chicago Home supporters emphasized that this difference is crucial because the city would be able to better operate and maintain these new developments. Moreover, the housing created as a result of the referendum would primarily serve typically underrepresented groups, including homeless youth, people with disabilities, undocumented immigrants, as well as victims of domestic violence.

On top of creating more affordable housing, the implementation of the Bring Chicago Home referendum would benefit the City’s economy, allowing for expanded social programs. to. Firstly, building new public housing would create over 1,500 construction jobs, which would substantially benefit the city’s economy. Secondly, the profits raised from the tax hike could be used to fund other social programs including mental healthcare, substance use counseling, domestic violence resources, job training, and education. Referendum supporters also highlighted that the positive impacts of the policy dramatically outweigh the slight tax increases on high-end properties. In fact, almost 93% of property sales would see a tax decrease, with only 4.2% of property sales per year negatively affected by the changes. Still, the tax decrease on most properties would be negligible, with a majority of the positive impact coming from profit put towards other homelessness alleviation programs. 

While Johnson managed to attract many enthusiastic supporters, the opposing side came out even stronger. More specifically, the Johnson-led grassroots campaign was up against an over $2 million campaign which not only opposed Bring Chicago Home, but also questioned Johnson’s leadership on the migrant crisis and crime. The opposition movement, which was led by political strategist Gred Goldner, emphasized three key issues with the policy. First, that the allocation of funds is unspecific. Goldner explained that the referendum makes a lot of assumptions about how easy it would be to support all of the programs that referendum supporters claim could be benefited, especially given that the “revenue stream has proved to be unpredictable.” He continued saying that although the intentions are positive, the policy in its current state is “poorly defined” and “poorly planned.” Even if everything went according to plan and all funds were allocated towards affordable housing, it would take the city almost 50 years to build 10,000, which means the mitigating impact of the policy would be less than supporters argued.

The second issue with the referendum is that it could actually end up negatively impacting Chicago’s economy. Golder pointed to Los Angeles as an example of how the transfer tax change could go wrong. In 2023, Los Angeles passed a similar tax policy, which had negative effects on the real estate market and encouraged investors to try to invest in less expensive and lower-tax cities. That policy is currently facing repeal in the November election, as people worry it might create a long-term dulling effect on the City’s economy. Many worry that Bring Chicago Home could send Chicago in the same direction. The impact could also be especially negative in Chicago since the City already has the second-highest commercial property taxes in the country and Illinois has been named the third-worst state in the country for business. 

The last major opposition to the referendum is that Johnson should not be trusted with any potential profits from the tax increase given his previous record. This was a major emphasis for the referendum’s opposition in their negative advertising campaign. The main criticisms of Johnson centered around the migrant crisis and crime, as well as how Johnson has not followed through on other campaign promises. For example, this referendum, along with an additional $800 million in potential profits from other tax proposals were all cornerstones of Johnson’s mayoral campaign, but the Mayor has yet to enact any of those policies. In a recent poll from the Illinois Policy Institute, 57% of Chicago voters said that they disapproved of Mayor Johnson’s job performance and thought that the city was heading in the wrong direction. The opposition movement certainly capitalized on this general distrust of the Mayor, which is likely what led them to victory this March.

With the failure of the Bring Chicago Home referendum, many Chicago voters are searching for the best way to solve the homelessness crisis. Other proposals, including securing unoccupied homes, streamlining the zoning and permitting process for new housing, and reducing property taxes for affordable housing, have been discussed, but none of these have gained significant traction. Mayor Johnson, in light of Bring Chicago Home’s failure, has promised to support some of these alternate policies, stating that aiding Chicago’s homeless population is a major priority for his administration. While the jury is still out on the best policy for solving homelessness in Chicago, the controversy surrounding the Bring Chicago Home referendum raises a lot of questions about Johnson’s leadership, political gridlock within the city, and the future of affordable housing policy. 

The image featured in this article is licensed for reuse under the Creative Commons Attribution-Share Alike 4.0 International license. No changes were made to the original image, which was taken by Josué Goge and can be found here.