* Lori Lightfoot campaign press release from November 2, 2018…
Lightfoot will seek referendum approval to replace the regressive real estate transfer tax with a graduated real estate transfer tax. This change is estimated to generate between $80 million and $150 million in additional revenue that can be used to address homelessness and support housing that is affordable. Under the new graduated rate structure, nearly 95% of property transactions citywide would receive a tax cut on the sale of properties. For example, a transaction for a $250,000 home would result in $1,000 savings.
Once elected, all talk of a referendum disappeared and she has instead asked the General Assembly to pass a bill to implement the tax change (which is why I’m doing a post about it). And she decided she needed to use the vast majority of that revenue to help balance the city’s budget.
* Mayor Lightfoot press release…
Mayor Lori E. Lightfoot announced today that the City of Chicago will increase funding for homelessness prevention by 36 percent, along with a commitment to increase the number of affordable units for Chicago’s lowest-income renters by 19 percent. This new package of investments and supports includes an increase in funding for the Flexible Housing Pool by $5 million to house more than 200 youth experiencing housing instability or homelessness, along with a commitment of $5 million from the corporate fund to the Low-Income Housing Trust Fund (LIHTF) for 520 new affordable housing units.
Together these investments will provide affordable housing to more than 700 new households through corporate fund contributions geared toward reducing homelessness and stably housing Chicago’s most vulnerable residents.
There’s no mention in the release about how that small increase would be funded.
* Bring Chicago Home Coalition…
Despite campaigning on a promise to dramatically increase funding for Chicagoans experiencing homelessness, Mayor Lori Lightfoot’s inaugural budget proposal would perpetuate a severe shortage of aid for the more than 86,000 city residents who lack housing.
Chicago’s current spending to reduce homelessness ranks near the bottom of major U.S. cities, and Mayor Lightfoot’s budget proposal would do nothing to alter that dismal status, even though she promised revolutionary change through a dedicated new revenue stream. As Chicago’s massive homeless population braces for another winter, this is no time to leave them out in the cold financially.
Lightfoot would assign only an additional $5 million to programs specifically dedicated to relieving homelessness. The new funding would represent only a small fraction of the revenue that the city would generate from the proposed increase in Chicago’s Real Estate Transfer Tax (RETT), breaking Lightfoot’s campaign promise to make support for the homeless a principal beneficiary of the tax increase.
Fortunately, she still has an opportunity to uphold her word by asking state lawmakers to approve a RETT increase that dedicates a much larger portion of the proceeds to alleviating homelessness.
A 2018 poll conducted on behalf of CCH found that 66 percent of Chicago voters approved a RETT increase on property sales worth more than $1 million to fund programs that mitigate homelessness, and the BCH coalition introduced legislation in City Council that would authorize a referendum on this proposal on the March, 2020 ballot.
Lightfoot has said she plans to ask the Illinois Legislature for permission to institute a RETT increase without direct voter approval through a referendum – but her proposal excludes money for homelessness.
* As hope for new source of city money fades, Chicago youth homeless programs at risk of losing federal funding too