Evanston aldermen Monday voted to place a referendum on the November ballot seeking approval of a 20 percent increase in the real estate transfer tax to fund affordable housing programs.
The referendum would increase the tax rate from $5 to $6 per $1,000 of a property’s selling price.
Alderman Ann Rainey, 8th Ward, said, “For years we have been entertaining advocates who say we do not have enough affordable housing.”
“They’ve said we should charge developers a fee or make them put affordable units in brand new high-rise condos. They have all sorts of plans for other people’s money,” she added.
The referendum, she said, “would be the most reasonable way to get people in the community to put their money where their mouth is. Instead of just focusing on the developer, this would be a way the whole community could contribute.”
Realtor Don Schollenberger of 1864 Sherman Ave. criticized the transfer tax increase saying it would severely hurt the elderly who are selling their homes to move into a retirement community.
“These are often $300,000 and under homes and the owners need every penny from the sale to cover their costs,” Mr. Schollenberger said, “This is a repressive tax against these people in particular.”
He suggested that, given increasing property values, the city should be able to take a portion of existing transfer tax revenues and use that for affordable housing.
The city last year raised just over $4 million from the transfer tax and has anticipated the same amount in this year’s budget. So a 20 percent increase in the tax could be expected to generate about $800,000 a year for affordable housing.
Ald. Rainey noted that Carroll Place, the largest condo development approved by the city so far this year, includes a $165,000 contribution from the developer for affordable housing.
“This isn’t something the council is going to do,” she said, “It’s a way for the communiy to say they’re willing to pay for affordable housing, or whether they’re only in favor of it when somebody else is paying for it.”
Evanston’s real estate transfer tax is already among the highest in the region, although a few Cook County communities impose a transfer tax as high as $10 per $1,000.
North Shore-Barrington Association of Realtors – Transfer Tax Rates