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The Drive to Reduce Homelessness Takes Center Stage in Chicago | FIRSTHAND: Homeless

Gompers Park Homeless Tents

The Drive to Reduce Homelessness Takes Center Stage in Chicago

For much of the past decade, homelessness in Chicago has been a persistent, but largely hidden, crisis.

Photo: Michael Izquierdo, WTTW News

For much of the past decade, homelessness in Chicago has been a persistent, but largely hidden, crisis.

But a one-two punch – first the COVID-19 pandemic and then the arrival of around 35,000 migrants from the southern border as of January – shredded the city’s social safety net and made it impossible for most Chicagoans to ignore the growing number of unsheltered people on the city’s streets.

With the city’s social safety net in tatters, 2024 could mark a monumental shift as voters will be asked in March to hike taxes on the sales of properties worth more than $1 million to generate $100 million annually to address the root causes of homelessness by building new permanent housing that offers wraparound services.

“This is a critical moment,” said Julie Dworkin, the former policy director for the Chicago Coalition for the Homeless who is helping lead the campaign to pass the proposal known as Bring Chicago Home. “We have an opportunity to transform the system. We would have enough money to carve out our own path.”

Chicago has no choice but to take matters into its own hands because of a profound disconnect between the reality of homelessness in Chicago and the federal government’s ability to document and address the issue, according to advocates for the unhoused like Dworkin.

According to federal data, the number of unhoused people in Chicago has been essentially steady for much of the past decade, with an average of more than 5,500 men, women, and children without a permanent place to sleep on any given night.

That data comes from the result of what’s known as the annual “point-in-time” count, which sends volunteers out to count the number of unsheltered people on the city’s streets on a single night, usually in late January.

Nearly 70 percent of people counted as unhoused in Chicago in 2023 were Black, even though less than 30 percent of the city’s 2.7 million residents are Black. More than 60 percent are men, and 25 percent are living in Chicago after having served time in jail or prison, according to federal data.

Federal officials determined 650,000 people nationwide met their definition of homeless in 2023, a 12 percent increase as compared with 2022. Most of that increase came as efforts designed to prevent evictions during the acute phase of the pandemic ended, officials said.

Between 2015 and 2020, volunteers scoured the entire city. But with the pandemic raging in 2021 and 2022, officials began using a “sampling approach” that sent volunteers to “100 percent of the Loop/CTA/hotspots and randomized subset of other areas around the city,” according to city records.

That methodology remained in use in 2023, and was implemented again on January 24, 2024, when Chicago’s 2024 point-in-time count took place.

Officials will also document the number of people living in city shelters. In January 2023, there were nearly 2,200 migrants living in the city’s shelters, with nearly 3,000 others also relying on the city to provide somewhere to sleep.

Chicago’s shelter population then exploded during 2023, with nearly 14,300 migrants living in city-run facilities during late January.

But most advocates for the unhoused say the method the federal government uses to tally unhoused people is woefully inadequate, since it does not consider people living “doubled-up” with friends or relatives temporarily to be homeless.

“The way the federal government measures homelessness has long been and continues to be problematic,” Dworkin said.

In fact, nearly ten times more people are actually homeless every day in Chicago than the official federal count would have you believe, according to a 2023 analysis of U.S. Census American Community Survey data collected in 2021 by the Chicago Coalition for the Homeless. An estimated 68,440 Chicagoans experienced homelessness in 2021, a 4 percent increase from data collected in 2020, according to the analysis based on the most recent data available for study.

Approximately 17,000 Chicago Public Schools students were homeless in 2023, according to the analysis.

City data shows that nearly 37,000 people sought to access the city’s homelessness services in 2022, an increase of more than 32 percent.

The limited amount of financial help from the federal government means city officials can only help a fraction of those who need emergency shelter or transitional housing, while the true scope of the crisis remains mired in the shadows, advocates contend.

In 2018, frustration with that status quo boiled over when coalition leaders realized there was no hope of convincing cash-strapped state officials to boost spending on efforts to reduce homelessness. And with former President Donald Trump in the White House, additional federal help was a lost cause.

So Dworkin and other advocates for the unhoused decided to act locally, taking a page from their counterparts in Los Angeles. In 2017, more than two-thirds of Los Angeles County voters approved a one-quarter-cent sales tax hike to create a $1.2 billion fund earmarked to reduce and prevent homelessness.

That showed voters would approve proposals that hiked taxes to help the unhoused – and bolstered efforts by Chicago organizers to begin making the case that they wouldn’t have to rely on federal funds to achieve the city’s self-proclaimed goal of making homelessness “rare, brief, and non-recurring,” Dworkin said.

Humboldt Park Homeless Tents

Photo: Michael Izquierdo, WTTW News

“Bring Chicago Home” Proposal Reshapes Debate

It took nearly five years for the Chicago Coalition for the Homeless to reshape the debate over the homelessness in Chicago.

When the group and its allies first launched the proposal that would become known as Bring Chicago Home in 2018, it immediately ran into a buzz saw of opposition, with then-Mayor Rahm Emanuel flatly rejecting the plan.

“I don’t think you should treat the homeowners as an ATM machine,” Emanuel said.

Without Emanuel’s support, efforts to put the question to voters during the November 2020 election failed to even get a hearing.

State law does not give the Chicago City Council the power to change the transfer tax on its own authority. Without legislation passed by the General Assembly and signed by the governor, the measure needs the support of Chicago voters through a referendum before the City Council can levy the tax and collect the funds.

The last time Chicago voters passed a binding referendum that applied to the entire city was 1885, when they voted to create the Chicago Board of Election Commissioners, according to city records.

But the coalition’s push had turned the issue of homelessness into a hot-button issue by the time the 2019 campaign for mayor was in full swing, with both Lori Lightfoot and Toni Preckwinkle tossing their support behind the initiative. Both promised to ask state lawmakers to give the Chicago City Council the power to hike the tax on the sale of homes worth more than $1 million.

Once in office, Lightfoot asked the General Assembly to act – but refused to promise to use all of the new revenue to help unhoused Chicagoans, saying she needed it to fill the gap created by the city’s massive 2020 budget deficit. That enraged progressive members of the Illinois House, who vowed to block the legislation unless Lightfoot earmarked 60 percent of the new revenue to help reduce homelessness.

Lightfoot’s response was succinct: “That’s never going to happen.”

The proposal languished in limbo until the fall of 2022, when supporters of Bring Chicago Home launched a new effort to put the question to voters in February 2023, alongside candidates for mayor and City Council.

This time it was Lightfoot who brought the hammer down on that push, prevailing on her allies to skip a special City Council meeting called by supporters of Bring Chicago Home and quashing a public hearing required before the question could be put to voters.

That reversal, along with others, ensured that nearly all of Chicago’s progressive political organizations lined up against Lightfoot’s bid for a second term. Instead, they coalesced around Brandon Johnson, helping to propel him into the office on the fifth floor of City Hall.

Johnson wasted little time in throwing his full support behind Bring Chicago Home, which gained momentum through the summer and fall.

The version of the proposal set to be considered by voters during the March 19, 2024, primary election would slash the real estate transfer tax paid by Chicagoans who sell residential and commercial properties for less than $1 million by 20 percent, while hiking taxes on transactions of more than $1 million by as much as 400 percent.

That would generate approximately $100 million annually, which supporters say would be enough to address the root causes of homelessness by building new permanent housing that offers wraparound services like substance abuse counseling, helping to combat crime and poverty throughout Chicago.

Under the current law, the buyer of a property worth $300,000 pays the same flat transfer tax as the buyer of a multimillion-dollar mansion or downtown skyscraper – a fact that supporters of the change contend is unfair.

The seller of a property sold for $500,000 now pays $3,750 in real estate transfer taxes, a 0.75 percent tax rate. The proposal would reduce that cost to $3,000, or a 0.60 percent tax rate, officials said.

Nearly 94 percent of all properties sold in Chicago have a final purchase price of less than $1 million, officials said.

The transfer tax on properties sold for more than $1 million would spike by 233 percent, but apply to just to the amount of the sale greater than $1 million, in an effort to ensure the measure withstands a legal challenge and reduces the incentive for sellers to artificially lower sale prices.

For example, the seller of a property that sells for $1.2 million now pays $9,000 in transfer taxes. Under the revised proposal, that would rise to $10,000, with the higher tax rate of 2% applied to just $200,000 of the sale price.

Using the same mechanism, the transfer tax on properties sold for more than $1.5 million would spike by 400 percent with the increase only applying to the amount of the sale greater than $1.5 million.

Imposing a marginal tax, rather than a flat tax, would make the tax fairer, and ease the tax burden on two- to six-unit properties, both residential and commercial, supporters said.

The plan also exempts developments subsidized to be affordable.

The fight over whether to hike the real estate transfer tax is expected to be fierce, as leaders of business and real estate groups warn it could cause the city’s already-struggling commercial real estate market to collapse amid the shift to remote work.

Focus Turns to “Housing First” Programs

The push for Bring Chicago Home got a major boost in late August 2023 when Inspector General Deborah Witzburg endorsed its housing-first approach to tackling homelessness.

Examining efforts by the city’s Department of Family and Support Services to help residents of encampments complete all of the steps necessary to secure housing and services in one day, the city’s watchdog found 94 percent of participants found an apartment, with nearly 79 percent of participants still housed five months later.

Housing-first efforts to combat homelessness take a different approach than traditional programs, which require participants to undergo mental health counseling and substance abuse treatment before being housed in a subsidized apartment.

That effort began in 2020, funded with $35 million in federal COVID-19 relief and began by focusing on moving those at high risk of complications from COVID-19 from shelters to hotel rooms and then to subsidized apartments.

That approach starts from the belief that the best way to help an unhoused person is to provide them with a safe and secure place to live. For years, many programs offered permanent housing as a reward to those who found a job, stopped using drugs or alcohol, or enrolled in counseling.

As homelessness increased across the country, it became a hot-button political issue, as indicted former President Donald Trump blamed Democrats for allowing “our once great cities have become unlivable, unsanitary nightmares surrendered to the homeless.”

Following Trump’s lead, many GOP officials are working to reverse housing-first efforts to reduce homelessness, despite a raft of studies dating back to the 1990s that show it works while saving money on emergency medical treatment and police response.

If city leaders implement a citywide housing-first approach with the revenue generated by the newly graduated real estate transfer tax, Chicago would join that debate, alongside Los Angeles and Denver.

Affordable Housing Crisis

Efforts to reduce homelessness in Chicago have faced particularly tough head winds because the city has an affordable housing gap of nearly 120,000 homes, according to the Depaul University Institute of Housing Studies. That has put “swaths of the city out of reach of low-income and working-class Chicagoans,” according to a 2020 report by a task force convened by Lightfoot.

Even subsidized apartments are unaffordable for most Black and Latino families, according to the report.

The median household income of Black Chicagoans was $27,713 in 2020, while the median household income of Latino Chicagoans was $40,700, according to an analysis of American Community Survey data by the Metropolitan Planning Council. That means more than six in ten Black Chicago households and more than five in ten Latino Chicago households could not afford a rental unit set aside as affordable.

A federal probe concluded in October 2023 that the decades-old tradition of giving Chicago City Council members the final authority over housing developments in their wards limits the creation of affordable housing in Chicago.

Known as aldermanic prerogative, the unwritten rule allowing each of Chicago’s fifty alderpeople a veto over housing developments in their wards means new “affordable housing is rarely, if ever, constructed in the majority-White wards that already have the least affordable housing,” according to the October 24, 2023, letter from Lon Meltesen, the director of the agency’s region that includes Chicago.

Read the full letter.

High Stakes

If a majority of voters approve the referendum in March, the issue will head back to the City Council, which will then have to decide whether to levy the tax.

While the vote to put the measure on the ballot was 32-17, it is not clear whether at least 26 alderpeople would vote to implement the will of the voters over the vehement objections of the powerful – and campaign-cash rich – business and real estate community.

Dworkin, who helped craft the Bring Chicago Home proposal and is now leading the campaign to enshrine it into law, knows the stakes are incredibly high.

“This is a really important moment,” Dworkin said. “When things like this fail, it is very hard to bring them back.”