Chicago might be hit with a controversial new actual property switch tax improve on properties above $1 million to construct everlasting supportive housing models for the homeless.
However the proposal might place a further burden on an already-struggling actual property local weather within the Windy Metropolis, some realtor teams worry.
The proposal, often called the Convey Chicago Residence plan, was mentioned at size throughout a topic listening to by town’s housing committee Thursday afternoon. The tax charge would soar from 0.75% to 2.65%.
The so-called “mansion tax,” proponents declare, might usher in upward of $163 million yearly. In a January 2023 point-in-time rely, town estimated it had greater than 6,100 homeless folks.
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“The cash generated by the tax can be legally devoted to applications that alleviate homelessness, together with help for youngsters, veterans, and girls recovering from home violence,” the marketing campaign web site reads.
No votes had been taken Thursday, because the assembly was extra of a symbolic gesture to deliver the initiative again into the highlight. Former Chicago Mayor Lori Lightfoot sidelined the proposal final 12 months as a result of many of the council members didn’t attend the designated dialogue assembly for it, NBC Chicago reported.
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Chicago is not the one liberal metropolis making such issues. Los Angeles voters imposed an analogous measure this 12 months, also called a “mansion tax,” enacting a 4% tax charge on property gross sales above $5 million.
Chicago’s newly elected mayor, Brandon Johnson — who was backed by the Democratic Socialists of America throughout his marketing campaign — expressed help for the proposal.
“My administration is dedicated to Convey Chicago Residence, and to constructing consensus round offering inexpensive housing to fight homelessness in our metropolis,” Johnson tweeted Thursday.
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Metropolis officers heard testimonies from housing advocates, metropolis staff and realtor teams through the three-hour assembly. A kind of teams, which included the Chicago Affiliation of Realtors, expressed concern the brand new tax would additional burden Chicago’s actual property and almost triple some property switch taxes as much as $30,000.
“Market research counsel that Chicago’s workplace buildings have misplaced 50% of their worth, and we estimate that nearly half of Chicago’s workplace buildings are in some state of monetary misery,” spokesperson Amy Masters stated through the assembly.
In accordance with the Illinois Realtors group, a commerce affiliation representing the true property trade, housing gross sales had been down year-over-year by over 25% in June, and the provision of properties is down over 30% versus 2022.
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“Including to the priority is the growing variety of industrial vacancies and workplace constructing defaults,” the group stated Thursday in a press release. “Simply right here in Chicago the workplace emptiness charge has virtually doubled since earlier than the pandemic started.”
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Chicago’s Metropolis Council must deliver a decision to a vote later this 12 months to get the mansion tax on the 2024 poll as a referendum. Town has taken criticism from enterprise leaders like Ken Griffin, who moved his hedge fund Citadel to Miami in 2022.