Johnson-backed transfer tax officially defeated as real estate delivers blow to mayor

Illinois Realtors CEO Jeff Baker clapped back at Mayor Brandon Johnson late Friday night after the Associated Press officially declared Chicago voters had rejected a real estate transfer tax in Tuesday’s election.

The head of the real estate trade group made a direct response to Johnson this week calling industry leaders’ campaign tactics “cowardly, cowardly,” in the mayor’s comments to reporters.

Johnson made the remarks following election night, after it became clear that his signature policy was headed for defeat with more than 53 percent of voters saying “no” to the proposal. It would have quadrupled the city’s tax on property sales of $1.5 million or more, to 3 percent of the sale price, in a bid to raise funds to combat homelessness. It also would have dropped the tax rate to 0.6 percent of the sale price for properties sold for less than $1 million, from the 0.75 percent rate charged now.

The mayor was referencing the fact that he felt hamstrung from campaigning more directly for the ballot measure due to city ethics rules surrounding referendums as well as his strict schedule, while opponents of the policy tied Johnson to the tax hike as the mayor’s approval rating wanes.

“It is not cowardly to demand the mayor provide details of his plans to raise real estate taxes,” Baker said in a statement. “It says nothing of the voters’ character when they are tired of one property tax increase after another.

Real estate groups also focused on the fact that specific plans for how the additional revenues — estimated by its proponents to average $100 million annually — would be spent, other than vaguely dedicated to homeless services.

“Community organizing is about bringing people together, not finding ways to divide one another,” Baker said. “BCH failed and now isn’t the time for excuses. We remain committed to partnering with leaders who want to come together to find real solutions to the growing housing instability facing our city.”

Johnson also vowed to keep fighting against homelessness.

The ballot measure went down in a low-turnout election, and after a winding court battle led by real estate trade group the Building Owners and Managers Association challenged the referendum’s constitutionality. A trial court judge ruled the measure wasn’t legal to pose to voters, but that decision was overturned on an appeal by City Hall and the Chicago Board of Election Commissioners, and votes on the measure ultimately counted.

Chicago real estate leaders’ success in opposing the transfer tax provides a blueprint to the industry as voters and officials in other major markets consider similar policies. In California, voters in November will decide whether to repeal a similar transfer tax hike that Los Angeles approved via voter referendum in 2022, and prevent similar taxes from being imposed across the rest of the state, if the new measure passes.