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When home affordability and real estate taxes clash in opposition, “contentious” is too soft a word to describe what ensues
When home affordability and real estate taxes clash in opposition, “contentious” is too soft a word to describe what ensues
A home is more than just basic lodging. “Home” connotates a sense of belonging and pride, where something should be. When people describe something going back to “as it should be” they describe “coming home”. Stories as old as civilization describe the journey of “coming home” - whether Homer’s Odyssey, The Bible describing the “Prodigal Son”, or the 1993 classic “Homeward Bound”. Nothing generates stronger emotions than the idea of home, and given rising economic pressures in America nothing has been more contentious than fights over affordable housing and real estate taxes.
In April 2023, progressive Brandon Johnson beat centrist Paul Vallas 52%-48% to become the next mayor of Chicago. Yet a year later in the Illinois Democratic 2024 primary, a city wide ballot referenda for the “Bring Chicago Home” initiative that was a cornerstone of Johnson’s progressive agenda and campaign promises was defeated by voters … 54-46%.
Understanding the nuances behind this drastic shift allows for better understanding if this is a one-off event or part of a larger trend for the city of Chicago and other large municipalities across the country.
Just like I could not see everything that could potentially be wrong with a home while at an open house, just analyzing surface level election results data cannot tell us exactly why this shift occurred, but both can help us form initial hypotheses and understand more than a short media puff piece or perfectly angled real estate MLS listing photos can.
Sharp swings across the city would indicate a potential popular backlash to Johnson - whereas a drastic decline in voter turnout isolated to more progressive areas of the city could signal falling enthusiasm or failed “get out the vote” initiatives.
Although other articles in the initial aftermath of the election did surface level analysis of the results, many were done prior to the final tabulation of election results and thus did not deeply study the behavior of voters at the precinct level compared to prior elections.
Like a home inspector - I am going to walk through the context of the referenda, turn on and off the faucets comparing the results of the primary to the mayoral runoff, pinpoint and rule out any flagrant issues, and educate you a bit more on this story you’ve decided to spend your valuable time learning more about. Unlike your last home inspector - I won’t charge you several hundred dollars for it (unless of course you want to pay me :) ).
Seeking a "downpayment" - how to raise $100M/year for housing affordability without raising property taxes
The “Bring Chicago Home” initiative is an effort that was initially started in 2017 by individuals with lived experiences of homelessness seeking to address homelessness in Chicago. It has since received the support of many community organizations in the city, including the Chicago Teachers Union and its endorsed mayoral candidate (and now mayor) Brandon Johnson.
Similar to any first time home buyer, the first goal of the initiative was to secure additional funding - specifically to be utilized for efforts to aid individuals experiencing homelessness and provide them permanent housing. Given the state of the City’s finances, saving up for a proverbial downpayment was not possible, so naturally it had to turn to its equivalent of side gigs - raising taxes. This posed a tricky proposition for Mayor Johnson, as he had promised during the campaign to not raise property taxes. Although Mayor Johnson had proposed additional new taxes during his campaign - such as a city income tax for households employed in Chicago and making over $100,000/year - just like many of the self professed “passive income” schemes peddled by Instagram influencers, Johnson’s other proposals contain their own legal or political issues.
Thus the group decided to propose adjusting the City’s real estate transfer tax system, which although is associated with real estate, is not part of an annual property tax bill and is only assessed during the closing of a real estate transaction (ie when you buy or sell real estate). Transfer taxes contain both a city and a state component in Chicago.
Currently all real estate in the City of Chicago is charged a city transfer tax rate equal to “$3.75 per $500” - or 0.75% of the value of the transaction.
The proposed amendment that Bring Chicago Home proposed was to create a tiered system - detailed below in Table 1.
This would have resulted in a 20% decrease in real estate transfer taxes for any transactions of less than $1M, which according to supporters represents over 94% of real estate transactions in the city. However, the 166.7% and 300% increases for properties above $1M and $1.5M respectively were designed to more than offset this decrease, with supporters projecting they would raise an additional $100M annually for the city. All of which would be earmarked for city backed efforts or causes to aid individuals experiencing homelessness or providing permanent shelter for individuals.
The offer is put in - and non-specific spending plans and other issues are pointed out by critics who alongside industry opposition fuel legal and media fight against the initiative
Opponents of the ballot measure noted that nothing in the ballot measure truly define what the city could spend the money, nor did Bring Home Chicago have an articulated plan on how the funds would be used. Bring Home Chicago said this was to allow for dialogue to occur with community groups after funds were secured. Critics pointed out this meant voters did not truly know what they were truly voting for. Without this there is concern that the City could use the money however they saw fit. Concerns were also raised that, given souring commercial property values in light of weaker than expected return to office results and high interest rates (don’t remind me), that the initiative may not raise the $100M/year that it was advertised to.
In November 2023 the Chicago City Council voted 32-17 to put the question to Chicago voters, in what was deemed a political victory for Johnson and his allies, as a prior similar initiative had been squashed in City Council only a year earlier by former Mayor Lori Lightfoot’s political allies.
Months long political and legal clashes between proponents and opponents of the initiative ensued. And I thought multi-offer clashes competing with all-cash escalator no cap offers was tough!
Groups representing builders, real estate advisors, landlords and others opposed to the initiative filed a lawsuit in January 2024 to block the ballot initiative in Cook County Court . The lawsuit alleged that, amongst other potential violations of Illinois Municipal code, that the referendum was invalid because it combines a property tax increase for some and decrease for others in the same question.
In February 2024 Cook County Circuit Court ruled in favor of the plaintiffs and that the results of the referenda would not be counted (as it could not be removed from the ballot given early voting had already begun). In early March 2024 an Illinois Appeals Court reversed the Cook County Circuit Court decision - allowing votes on the referenda to be counted. Opponents to the initiative tried in vain to appeal to the Illinois Supreme Court, which a few days afterwards upheld the appellate court’s decision affirming the legality of the referenda.
The campaigns for and against the referenda were equally as fierce and confusing to voters as the legal battle, as sides tried to take ownership of the narrative. Was a vote “yes” a tax increase or decrease? Would this lead to rent increases? Who would it impact? More in depth analysis and reporting should be done on the amounts spent by both sides on media, campaigning, and the tactics used.
Bring Home Chicago referenda rejected by voters; 53.6% opposed to 46.4% in favor
Starting the inspection - turning on/off the faucets and looking at the results at a high level
An initial glance of the percentage of votes in each precinct that voted “Yes” or “No” on the initiative (Figures 1 and 2) closely match the results of the 2023 Mayoral Runoff Election - with areas that primarily supported “Yes” previously supporting Johnson and those voting “No” previously voting for Vallas.
Checking out the circuit breaker and appliances - analyzing impact of turnout differences on the referenda
Given that the areas that supported or opposed the referenda appear similar to the results of the runoff election at a surface level - the next question is to what degree turnout played a result. Only 311 thousand Chicagoans voted on the referenda, whereas a year earlier 612 thousand Chicagoans had voted in the 2023 Mayoral Runoff election. In other words, the number of Chicagoans that voted on the referenda question was only about half (51%) of that which had voted in the Mayoral runoff.
Although I am unable to see how the individuals that did not vote in a particular area would have voted, assessing if turnout was down only for a select area or across the board can indicate if a differential decrease in turnout may have played an outside influence.
Figure 5 shows that turnout was down across the board. Separately I ran an analysis to adjust the vote count of each precinct to that of the mayoral runoff, whilst maintaining the percentage that voted “Yes” or “No”, to see if that would have an impact on the overall result of the referenda. The overall result remained roughly the same, at 54% opposed and 46% in favor.
Although this does not prove that turnout was not a critical factor in the race, showing turnout was down across the board indicates it was a systemic problem in this election in general.
More than your normal inspection - looking at the underlying wiring - analyzing shift in voter percentage by precinct and comparing to the first round of the mayoral race results
Taking a deeper dive into the results in each precinct, I measured the swing (in percent of total vote) each precinct shifted from voting for Mayor Johnson in the 2023 Mayoral Runoff to voting “Yes” in the Referenda. Ie - if a precinct in the 2023 Mayoral Runoff had voted 65% for Johnson, but later voted 60% “Yes”, I showed it as having swung “away” from Johnson by 5%.
Figure 6 shows that even in some areas which primarily voted “Yes” on the initiative, their support for the referenda was much softer than their support for Mayor Johnson had been in the Mayoral Runoff election. Primarily areas on Chicago’s South and West sides.
Figures 7 and 8 seem to help complete this story. Figure 7 shows Brandon Johnson’s vote percentage by precinct in the first round of the mayoral election in February 2023, prior to the narrowing of the race to just him and Vallas. Looking at where Johnson’s core support had started, primarily the city’s progressive strongholds - going south to north in Hyde Park (near the University of Chicago Campus), in Pilsen, in the Logan Square/Avondale area, and along the northern edge of the lake in northern Lakeview/Uptown/Edgewater/Rogers Park.
Referring back to Figure 6, precincts in these areas mostly voted “Yes” in roughly equal measure to their support for Johnson in the runoff.
Figure 8 however shows the initial support of another candidate - mayoral incumbent Lori Lightfoot, whose 16.8% of the vote in the initial round of the election fell behind Johnson’s 21.6% and Vallas’ 32.9% and thus failing to get to the second round.
Here we see that precincts that voted most strongly for Mayor Lori Lightfoot in February 2023 (Figure 8) correspond with areas that later supported Mayor Brandon Johnson over Vallas (Figures 3-4), and although primarily voted “Yes” (Figure 1) did not vote “Yes” to the same degree as they had supported Mayor Johnson in the runoff (Figure 6).
What caused areas that previously had supported Lori Lightfoot, and later backed Johnson, to vote less favorably for the Johnson backed “Bring Chicago Home” is worth further study and consideration by anyone proposing a similar initiative in the future.
The fact they did not initially support Johnson suggests that although Johnson’s progressive base is still solidly behind him and his progressive agenda, the electoral coalition that helped propel him into office may not be willing to issue Johnson a rubber stamp on his agenda.
If Johnson is to succeed at getting other key components of his agenda passed, he will need to secure compromises to bring more than just the ~23% of city voters that are in his progressive core to the table.
References
References
2010. City of Chicago | Data Portal. https://data.cityofchicago.org/
APPELLATE COURT OF ILLINOISFIRST JUDICIAL DISTRICT. 2024. “BUILDING OWNERS AND MANAGERSASSOCIATION,et al. v. COMMISSION OF THE BOARD OFELECTIONS of the CITY OF CHICAGO,et al.” https://www.scribd.com/document/711201994/Bring-Chicago-Home-decision#from_embed
Bring Chicago Home. n.d. Bring Chicago Home. Accessed August 11, 2024. https://www.bringchicagohome.org/
Bring Chicago Home. n.d. “About (new) — Bring Chicago Home.” Bring Chicago Home. Accessed August 11, 2024. https://www.bringchicagohome.org/about-5
CIRCUIT COURT OF COOK COUNTY COUNTY DEPARTMENT. 2024. “BUILDING OWNERS AND MANAGERS ASSOCIATION et al. vs. BOARD OF ELECTION COMMISSIONERS of the CITY OF CHICAGO.” https://assets.nationbuilder.com/thedailyline/pages/18016/attachments/original/1704464282/Complaint_Final.pdf?1704464282
Myers, Quinn. 2024. “Bring Chicago Home Votes Will Count After State Supreme Court Rejects Challenge.” Block Club Chicago, March 13, 2024. https://blockclubchicago.org/2024/03/13/illinois-supreme-court-declines-to-hear-bring-chicago-home-appeal-dealing-win-to-backers/
Myers, Quinn. 2024. “Bring Chicago Home Votes Will Count After State Supreme Court Rejects Challenge.” Block Club Chicago, March 13, 2024. https://blockclubchicago.org/2024/03/13/illinois-supreme-court-declines-to-hear-bring-chicago-home-appeal-dealing-win-to-backers/
Neveau, James. 2024. “‘Bring Chicago Home,’ explained: What voters will decide in primary.” NBC Chicago, March 18, 2024. https://www.nbcchicago.com/news/local/chicago-politics/what-bring-chicago-home-referendum-is-and-how-it-would-work/3385840/
Neveau, James. 2024. “Here's how 'Bring Chicago Home' referendum will work if it passes – NBC Chicago.” NBC Chicago, March 18, 2024. https://www.nbcchicago.com/illinois-election-2024/how-bring-chicago-home-will-work-if-illinois-primary-voters-pass-measure/3385898/
Olander, Olivia. 2023. “Progressive Brandon Johnson wins Chicago mayor's race.” Politico, April 5, 2023. https://www.politico.com/news/2023/04/04/chicago-mayors-race-results-00090504
“On The Issues.” n.d. Brandon Johnson for Mayor of Chicago. Accessed August 11, 2024. https://www.brandonforchicago.org/on-the-issues
Sharkey, Dylan. 2024. “What you need to know about 'Bring Chicago Home.'” Illinois Policy. https://www.illinoispolicy.org/what-you-need-to-know-about-bring-chicago-home/
Spielman, Fran. 2023. “Referendum to create fund to fight homelessness clears City Council.” Chicago Sun-Times, November 7, 2023. https://chicago.suntimes.com/city-hall/2023/11/7/23950713/chicago-city-council-real-estate-transfer-tax-bring-chicago-home-referendum-passes
“2024 Primary - NON - 3/19/2024.” 2024. Chicago Board of Elections. https://chicagoelections.gov/elections/results/208
U.S. Census Bureau. n.d. “TIGER/Line Shapefile, Current, State, Illinois, 2020 Census Public Use Microdata Area (PUMA).” https://catalog.data.gov/dataset/tiger-line-shapefile-current-state-illinois-2020-census-public-use-microdata-area-puma
WTTW News. 2024. “Push to Find New Sources of Revenue Set to Seize Chicago City Hall Spotlight.” June 25, 2024. https://news.wttw.com/2024/06/25/push-find-new-sources-revenue-set-seize-chicago-city-hall-spotlight
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