Chicago voters reject mansion tax

Chicago voters rejected Mayor Brandon Johnson's plan to increase taxes on real estate transactions of $1 million or more, dealing a blow to the first-term Democrat's progressive agenda. 

About 53% of voters opposed the referendum, according to the Chicago Board of Elections. The measure would have allowed the city council to increase transfer levies on upmarket residential and commercial property sales.

The defeat shows the challenges that Johnson faces trying to enact his campaign's policies. Elected last year on a platform advocating for the city's wealthiest to contribute more, his "Bring Chicago Home" campaign aimed to implement the so-called "mansion tax" to fund efforts against homelessness. Opponents warned that the tax hike would hurt the city's already fragile real estate market, while proponents said the measure would have raised $100 million a year.

Scott Olson/Getty Images

It's challenging to get public buy-in for local tax hikes, especially those tied to property, according to John Hansen, a professor at the University of Chicago's Department of Political Science. 

"This is a city where we have already seen very large increases in taxes, very large increases in the cost of services because of policy decisions that have been made by the city government," he said. 

Adding to Chicago's housing challenges, more than 68,000 people were experiencing homelessness in 2021. The strain has been exacerbated by the arrival of more than 37,000 migrants to the city and its suburbs over the past year and a half.

Even before the vote, the measure had already faced legal challenges. Real estate trade organizations filed a lawsuit earlier this year, contending that the way the ballot question was worded violated a state statute outlining the needed language for referendums.

Last week, the Civic Federation, a fiscal watchdog group, criticized the lack of detail around the proposed tax hike. Chicago is already grappling with high taxes and concerns about public safety, according to Joe Ferguson, president of the federation.

"If you add something like this, what it does is it really just sort of triggers and adds to that overall perception that maybe Chicago isn't the place that we should be going or isn't the place that we should be buying," Ferguson said in an interview before the vote.