Chicago mansion tax opponents say rents will rise if approved

(The Center Square) – A proposed hike in the transfer tax on real estate in Chicago valued at $1 million or more is not sitting well with landlords of apartments and multifamily complexes.

Mayor Brandon Johnson says the new revenues from the “mansion tax” will be used to tackle the city’s homelessness problem. His administration said the tax hike could net the city as much as $163 million a year.

Corey Oliver, chief operations officer of the Community Venture Investment Corporation, said not every building worth $1 million is a mansion.

“I think that it is going to create further housing destabilization, causing rents to go higher and make it so people who are already living paycheck to paycheck can longer afford to stay in their apartment,” Oliver said.

A study released by the Neighborhood Building Owner’s Alliance shows that the proposed “Bring Chicago Home” tax increase is likely to lead to higher rents. Because the tax increase would reduce the proceeds from the sale of a building, three out of four respondents (74%) indicated that the measure would make them more likely to raise rents.

- Advertisement -

The same tax was implemented in Los Angeles, where lenders halted making loans to new multifamily construction projects because of a new transfer tax. The city saw its luxury real estate market come to a standstill after the tax went into effect. As a result, the city is collecting far less than anticipated.

Oliver said property values have been going down and the tax will make it worse.

“You got to believe that even buildings that are transacting are going to transact for thousands and millions of dollars less, which is going to create a situation where the assessor is going to have to reassess the value of properties and you are going to start losing tax dollars across the board,” Oliver said.

Illinois law allows municipalities to restructure their real estate transfer taxes only if voters approve it in a binding referendum. The Chicago City Council must approve the measure before it reaches voters.

Hot this week

African and Caribbean Nations Call for Reparations for Slave Trade, Propose Global Fund

Nations across Africa and the Caribbean, deeply impacted by...

Sports betting expert offers advice on paying taxes for gambling winnings

(The Center Square) – Tax season is underway, and...

Health care company agrees to pay $22.5 million to settle claims of over billing

A health care company agreed to pay nearly $22.5...

Entertainment district benefits don’t outweigh the cost, economists say

(The Center Square) — Weeks later, after more details...

Business association ‘disappointed’ by WA L&I’s proposed workers comp rate hike

(The Center Square) – The Association of Washington Business...

Op-Ed: Pennsylvania’s energy mandate

(The Center Square) – The inauguration of President Donald...

Kidwell pushes for North Carolina to be 30th with constitutional carry

(The Center Square) – Gun owners could carry weapons...

Shreveport’s Hispanic community expresses fear over immigration crackdown

(The Center Square) − Shreveport’s Hispanic residents are voicing...

Illinois quick hits: Chicago mayor to testify about sanctuary status

Chicago mayor to testify about sanctuary status ...

Petersen files paperwork to run in Arizona attorney general race

(The Center Square) - Arizona Senate President Warren Petersen...

House passes bill blocking future presidential bans on hydraulic fracking

(The Center Square) – A bill preventing future presidents...

Many medical providers end transgender youth procedures after Trump order

Late last month, President Donald Trump signed an executive...

Controversial initiative bill gets mixed testimony

(The Center Square) – A Washington state bill that...

More like this
Related

Op-Ed: Pennsylvania’s energy mandate

(The Center Square) – The inauguration of President Donald...

Kidwell pushes for North Carolina to be 30th with constitutional carry

(The Center Square) – Gun owners could carry weapons...

Shreveport’s Hispanic community expresses fear over immigration crackdown

(The Center Square) − Shreveport’s Hispanic residents are voicing...

Illinois quick hits: Chicago mayor to testify about sanctuary status

Chicago mayor to testify about sanctuary status ...