Real estate loses transfer tax appeal, votes to count

Chicago’s real estate industry will have to rely on the voters in its bid to defeat Mayor Brandon Johnson’s transfer tax referendum in Tuesday’s election.

The Illinois Supreme Court on Wednesday denied an appeal filed by real estate trade groups that sought to invalidate votes on the “Bring Chicago Home” ballot measure that would quadruple the city’s tax on property sales of more than $1.5 million, if passed by a simple majority in the March 19 primary election.

The decision ends weeks of legal limbo for the ballot measure in which it was uncertain whether votes on it would be counted — the Supreme Court ruling certifies that they will.

“While we are disappointed by the case outcome, it was important to contest this misleading and manipulative referendum question,” said Farzin Parang, head of the Building Owners and Managers Associtiaon’s Chicago chapter, which spearheaded the challenge of the Johnson-backed measure’s legality.

“This backdoor property tax hike would hurt our downtown and local neighborhoods alike, impacting homeowners, renters, union workers, and business owners large and small,” Parang said. “What is especially troubling is that Mayor Johnson’s transfer tax hike would give the city a blank check with no accountability for improving our housing and migrant shelter crises.”

The down-to-the-wire ruling was the culmination of a monthslong legal battle that started with a win for real estate interests in trial court that was later reversed in appeals court. Their main argument against the measure was a claim that it actually posed three different questions in a way that violates state law, by asking for a slight tax decrease for property sales of less than $1 million, an increase for properties sold for more than $1 million and an even steeper hike for those sold for more than $1.5 million.

In between rulings, both the trade groups and the proponents of the transfer tax, called Bring Chicago Home, campaigned hard for their positions, raising about $1 million each and spending it on local advertising and political messaging.

The state Supreme Court ultimately upheld appeals made by the Chicago Board of Election Commissioners and City Hall, allowing the vote to move forward. Proponents of the measure have projected it would raise about $100 million annually, and the city is meant to earmark the extra revenue to combat homelessness by providing new housing options and other services, though specifics have not been provided.

“Our coalition knew when we launched this campaign over six years ago that big-money corporate real estate would fight us at every turn, and we were right,” said Doug Schenkelberg, head of the Chicago Coalition for the Homeless, which supports the ballot measure. “From emailing tenants with the threat of a rent increase to using the courts to try to stop our votes from being counted, they have consistently demonstrated that they would rather profit from the housing crisis than pay their fair share to fix it.”

Parang said the plaintiffs plan to continue to campaign against the measure in the final days before the election.

However, the appellate court ruling that the Supreme Court allowed to stand left room for the real estate lobby to renew its complaint against the ballot measure, because the decision emphasized that the suit was filed prematurely. Challenges of such ballot measures are only ready to be heard by a judge after voters approve them, the appellate court ruled, without weighing in on the other merits of the argument against the referendum.

Schenkelberg added: “Fortunately, with this latest decision, voters now have the power to set Chicago on a new path: where big corporate landlords pay their fair share, where there is legally dedicated local funding for affordable housing and support services, and where 68,000 homeless Chicagoans have a place to call home.”

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