Evanston voters go to the polls Tuesday to decide the fate of a plan to raise the real estate transfer tax 20 percent to fund as-yet-unspecified affordable housing programs.

The tax increase is expected to raise $800,000 to $1,000,000 per year.

The way I figure, that might be enough to solve 44 percent of our affordable housing problem in 136 years.

Let’s take a look at a best-case scenario. (Bear with me here, this is going to require some math.)

If the funds are spent as Alderman Ann Rainey, 8th Ward, who first proposed the referendum, has suggested, $1,000,000 could give $25,000 in downpayment assistance to each of 40 new homebuyers a year. (Most other proposals suggest spending more money apiece on fewer total households.)

U.S. Census data shows that Evanston has 5,465 renter households who now have to stretch to meet their housing costs — paying over 30 percent of their income for housing.

So, helping 40 households per year, it would take 136 years to provide downpayment assistance to all Evanston renters who now pay too much for housing. (And the crisis is only solved for them if, after the downpayment assistance, they have a sufficient income stream to carry the rest of the costs of their new home. Some will have that, but many won’t.)

Meanwhile, what happens to the 6,832 current Evanston homeowner households that the Census Bureau says have to stretch to meet their housing costs? That’s the other 56 percent of our housing affordability crisis.

Well, not much. They won’t be helped by a program focused on new-homeowner downpayment assistance, but the transfer tax boost will only marginally raise their housing expenses.

Here’s how to figure that.

With 17,341 Evanston homeowners in 2005 and around 2,000 real estate transfer tax transactions each year, we can estimate that the average Evanston homeowner moves once every nine years. (For a reality check on that estimate, note that the Census Bureau reports that nearly 45 percent of all suburban residents moved in the five years between 1995 and 2000.)

With the median home price here at $338,000 and a new tax of $338 paid once in nine years, that averages out to a cost of $37.55 per year for the owner of a median-priced home.

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Bill Smith is the editor and publisher of Evanston Now.

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  1. Not all of the potential funds included in your analyisis

    Omitting the developer’s portion of the revenue source for affordable housing certainly does make the numbers you set forth pretty grim indeed. Adding those expected revenues may cut the time needed to help everyone somewhat. Even though not everyone may be helped immediately, I still feel that there is a benefit to providing support for affordable housing here in Evanston.

    By providing monies for affordable housing, the supply of potential buyers for both existing and new housing increases. The value of my house is tied to what someone can pay for it when or if I wish to move. If no relator can sell my house because no one can afford to buy my house, then $0.00 goes into both the affordable housing fund and the city fund. Likewise, if I cannot afford to sell then again $0.00 goes into the fund because the property didn’t transfer. If people cannot afford to buy in Evanston, then the developers who are putting up all of this housing will be stuck with largely empty buildings that they will have to pay taxes on and that will eventually fall into disrepair.

    I am of the opinion that there an affordability problem exists in Evanston now. I believe that this is supported by the decrease in Kindergarten enrollment in our elementary school district. I also peruse the newspaper real estate listings for Evanston weekly. I’m just not seeing that even “handyman’s special” properties or even most Evanston condos anywhere near affordable in those listings. I have no faith that the federal or even that state government is capable of addressing the issue with any effectiveness. I do believe that some local effort, even if it is small needs to be made toward addressing affordability. The opportunity to start out in a small space, or in a fix-it-up space isn’t there as it was 20 years ago, based on the asking prices I’ve seen.

    Models such as the one used in Napa, California do exist for administering affordable housing. I have yet to meet anyone on the city staff who could not
    figure out how to adapt that model for our community.

    In short, I will be voting Yes on this referendum. If someone were to put forth a proposal to eliminate property taxes entirely and use a municipal income tax to fund our school districts and city government, I’d be in favor of that as well.

    Any other perspectives????

    1. disagree
      I would be interested to see statistics on D65 elementary enrollments that include private schools. In this manner, we might be able to see if we are losing residents or losing students. If we are losing students, there could be any number of reasons including various experimental programs instituted by the school board.

      I disagree regarding affordable condos/handyman specials; every time I check listings online I see plenty. Do some searches on, or if you have the time contact someone with access to a real MLS database. Of course they aren’t going to be in the newspaper… in my experience affordable housing does not generally get advertised in print.

  2. Is that what she said?
    So you admit there’s a problem, but your logic is since it won’t help enough people fast enough, don’t pursue it? Meanwhile, other opponents argue that since there isn’t enough evidence this six-month-old fund will work, don’t pursue it. A criticism of the referendum is that proponents aren’t unified in their arguments, but that’s true on both sides.

    I don’t think we can solve the entire problem with this proposal. I’m not sure if anyone has suggested that. IMO, a problem being so big is an argument for action, not inaction.

    $1,000,000 could give $25,000 in downpayment assistance to each of 40 new homebuyers a year.

    Did she suggest only giving that to people struggling to pay rent? If not, your entire article is logically flawed from 44% to 136 years.

    If we’re only going for the most benefit for the most people, we can just subsidize rent/rental properties. It was reported here that “it’s extremely difficult to build new rental housing in Evanston… unless the buildings receive government-subsidized financing.”

  3. Bill you are being to optimistic with your projections!
    Bill – You missed one big piece in your analysis that is the City of Evanston’s cut. How much will the city take to run this new useless program it will create. will they add a new employee? Usually it takes them about $1 of employee salary to provide $1 of social service. Therefore it might take 272 years if not more for the numbers to work!

    I saw one of the fact sheets given out by the supporters of this misguide referendum. They claim it will help diversity – this is the usually nonsense these people have put forward here for years. Evanston is plenty diverse – we have more criminals, sex offenders, gang members than most suburbs. We have plenty of affordable housing almost 7,000 units by the state count in 2000.

    One of my friends child who is an Evanston police officer try to get help from the city for a so called affordable loan to buy a house here the City told her it might take a year to get the paper work done- the city is a joke and the council is a joke – they never monitor the programs they create this whole thing is the usually political nonsense we continue to get out of our public officials here.

    The supporters of this are trying to minimize the 20% increase – even there brochure isn’t honest about that.

    Today I was at the metra platform and a member of the council was passing out the brochure – and he try to hand one to someone – the person asked him what it was about and I told a 20% tax increase – the person told him to keep it. The council member asked me to move – if I had the time I would be there are Monday telling people the truth about this referendum!

    1. Yikes
      Evanston is plenty diverse – we have more criminals, sex offenders, gang members than most suburbs

      Wow. I really hope confusing Evanston’s diversity with these issues was a bad joke.

  4. There is one affordable housing program I will support
    There is one affordable housing program I will support that is to give Evanston police officers homes in the high crime neighborhoods in this town!
    First the city must admit it has a crime problem. Then they must admit what neighborhoods have a crime problem. The federal governement has such a program where it gives a large buy down on homes in high crime areas. That is a police officers is sold a home the goverment pays a piece and over time gives the officers a percent of the piece it paid for!
    One problem is I doubt many of our police officers want to live in the high crime areas in this community next to the criminals they arrest every day.

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