Editorial: Chicagoans should vote down ‘Bring Chicago Home’

By Editorial Board, Crain’s Chicago Business | March 15, 2024


We’ve said it before and, unfortunately, it must be said again as the March 19 primary voting deadline looms:

Mayor Brandon Johnson’s “Bring Chicago Home” plan, well intentioned though it may be, is the last thing the city needs right now. And that goes double for the Loop.

Stroll down any major commercial corridor in the city — even the Magnificent Mile — and you’ll encounter a parade of empty storefronts, the ghosts of boutiques and restaurants that didn’t survive the COVID downturn. But the situation is especially dire in the Loop, where nearly four years after the first lockdown of the pandemic, the number of empty storefronts has surpassed a daunting threshold: More than 30% of the central business district’s retail space is vacant.

The office market isn’t faring much better, as companies downsize their space to better suit a remote workforce. The downtown office market closed out 2023 the same way it began, with vacancy hitting a new record high. Nearly 24% of office space in the central business district was vacant at the end of the year. Interest rate spikes over the past two years, meanwhile, have fueled a historic wave of distressed properties as landlords have been unable to pay off maturing debt. Hardly a week goes by when Crain’s isn’t reporting on the foreclosure of a major property or the sale of a downtown building at a fire-sale price.

Also caught up in the misery: Chicago-area banks, particularly smaller ones. As Crain’s has reported, small banks in the area are holding an outsize portion of the risk from the depressed commercial real estate sector, with more pain expected in 2024.

And yet, Johnson and his progressive allies, watching downtown drown, are tossing it an anchor instead of a life preserver.

The anchor comes in the form of a carefully calibrated measure, to be voted up or down on March 19, that would lower the real estate transfer tax for property sales under $1 million — the better to appeal to Average Joes and Janes — while raising the tax for property sales above $1 million. A third tier would raise the tax for property sales above $1.5 million to 3% — quadruple the current rate.

That structure is no accident, and it makes the entire Bring Chicago Home proposal an easier sell politically: Make the fat cats pay more, the thinking goes, and use their money to fund programs for homeless people. Who, after all, wouldn’t want to help homeless people?

The trouble is, the fat cats aren’t just downtown building owners. They’re also mom-and-pop investors who, say, own their own storefronts or perhaps own a neighborhood three-flat. And all of them — the little guys and the fat cats alike — are facing a commercial real estate market as choppy and challenging as anyone alive now can remember. And all of them would be on the hook for a significant tax payout if they were to sell their property under this plan.

And the trouble doesn’t end there. As the nonpartisan Civic Federation pointed out in an analysis released March 13, the due diligence on Bring Chicago Home is seriously lacking, both regarding the potential effects on the real estate market and how the revenue generated by the tax will be spent. “The city’s work on this policy proposal is incomplete,” the Civic Federation wrote. “Given the stakes, it is critical that city leaders move quickly to meet the moment with additional public-facing details about implementation and analysis of possible consequences, both positive and negative.”

As Civic Federation chief Joe Ferguson put it in an interview with Crain’s: “On the revenue side, there has been no analysis and no accountability and no seeming consideration for the potential adverse consequences here.”

In short, Bring Chicago Home would give Johnson a blank check to address homelessness in still-undefined ways — while further burdening owners of commercial properties throughout the city and potentially quashing much-needed investment.

Voters should say no to this ill-conceived proposal.