One day before Wednesday's budget vote in the Chicago City Council, a Northwest Side community group released new research showing that Chicago renters could take a significant hit under Mayor Rahm Emanuel's proposed property tax increase.
Emanuel wants to increase property taxes by a record $588 million over four years to pay for police and fire pensions and school construction. Aldermen are scheduled to vote on the mayor's budget package, including the property tax increase, at Wednesday's council meeting.
A report released Tuesday by Communities United, formerly the Albany Park Neighborhood Council, examined the potential impact of the proposed property tax hike on renters in two-flat buildings across seven North Side neighborhoods.
The grassroots social justice group found that tenants in two-flats on Chicago's North and Northwest Sides could see their rent increase between $50 to $100 a month, or $600 to $1,200 a year, after the property tax increase is fully implemented.
The estimated rent increases do not account for proposals from the mayor and aldermen seeking to provide property tax relief to homeowners. The study also assumes that landlords would pass all additional property tax costs onto renters.
"Working families that rent in the city of Chicago are already paying too much to live in the city," Diane Limas with Communities United said during a Tuesday morning press conference at City Hall. "How are working families going to pay this increase in housing when most of them are already burdened?"
Limas said 263,000 renter households in Chicago who earn less than the city's 2014 median annual income of about $50,000 are "cost-burdened," meaning they pay more than 30 percent of their income on housing. According to the federal government's standard, rental housing is affordable when a household spends no more than 30 percent of its income on housing.
Of those 263,000 cost-burdened Chicago renters, 150,000 pay more than 50 percent of their income on housing, the report found.
Communities United concludes that the $588 million proposed property tax increase "will threaten affordability in the city's iconic two-to-four unit buildings," which make up nearly a third of the city's rental housing stock, and "add to the citywide affordable housing crisis by broadening the pool of 'cost-burdened' renters in Chicago."
"(W)ithout strategies to address the needs of the city's low-income tenants, the mayor's tax increase will decimate an already dwindling multi-unit affordable housing stock in Chicago," the report adds.
Communities United is calling on the city to establish a task force to "develop solutions that address the housing challenges faced by cost-burdened renters," who would likely see their housing costs increase if the property tax hike is approved.
A representative from the mayor's press office could not immediately be reached for comment in response to the report.
Emanuel's budget recommends a $543 million property tax hike, to be phased in over four years, that would go toward the city's woefully underfunded police and fire pension funds. Under the plan, property taxes would go up by $318 million this year, $109 million in 2016, $53 million in 2017 and $63 million in 2018.
An additional $45 million property tax increase would be used for construction at Chicago public schools.
Emanuel wants to expand the homeowner exemption in the city so that individuals whose properties are worth $250,000 or less are shielded from the property tax increase. That plan requires action in the Illinois General Assembly and approval from the governor, who has not committed to signing such a measure.
Aldermen have proposed property tax rebates as alternative property tax relief options if Emanuel's proposal fails to get through Springfield.
Ald. Carlos Ramirez-Rosa (35th), who joined Communities United members at the press conference, said the mayor's homeowners exemption plan is not geared toward helping renters.
Ramirez-Rosa said he supports adding renter protections to the property tax rebate plan he and other Progressive Reform Caucus members have proposed. The alderman also stressed that there are other revenue options out there to help the city address its pension and budget issues.
"One of the things that the city could do right away is be more aggressive with its TIF [tax increment financing] surplus," Ramirez-Rosa said. "I think the progressive caucus put it at almost $400 million that the mayor could potentially surplus."
The alderman noted that the Progressive Reform Caucus also introduced a plan to extend the city's 9 percent amusement tax to the Chicago Symphony Orchestra, the Lyric Opera of Chicago and horse-drawn carriage rides.
Meanwhile, Dimas said it "would be great" if the report prompted enough "no" votes in the council Wednesday to block the property tax increase. She also called on City Hall to "start thinking about other ways to generate money for the city."
Ramirez-Rosa pointed out that "a lot" of aldermen are still undecided on how to vote for the budget. For his part, Ramirez-Rosa said he could not "vote in good conscious on this budget" if "we do not have protections for working people with the form of a rebate" and "if we do not implement a lot of the alternatives that (the Progressive Reform Caucus) brought forward when it comes to raising revenues."
Asked specifically how he will vote on the property tax hike, Ramirez-Rosa said he is "leaning no."
"Maybe by some miracle the mayor hears this message and hears the message that I'm saying today and decides to move in a positive direction," the alderman added.