Taking a cue from Seattle, the Chicago Coalition for the Homeless wants the City Council to increase the city transfer tax to help homeless people.
This summer the federal government cut $3.3 million in funding for services for Chicago’s homeless population, resulting in a 75-percent decrease in the city’s capacity to care for people in need of housing, according to the coalition. More than 3,400 people will be left without the mental health, substance abuse and affordable housing assistance they need.
The city asked the coalition to come up with ideas for how to fund the services. The group has proposed a .50 per $500 charge on real estate sales over $1 million, noting that the tax could raise $4.5 million to help families attain permanent housing.
“We feel like it would be good to have an ongoing dedicated funding stream,” said Julie Dworkin, director of policy at the Chicago Coalition for the Homeless. “It’s something that the city has never done in the same way other places are doing, stepping up to address the problem.”
The city spends $8 million annually on services for the population, a figure that has not changed since 2005, Dworkin said. The figure pales in comparison to spending in New York and Los Angeles.
Chicago’s homeless population was estimated at 138,575 people during the 2013-2014 school year, according to the coalition.
The coalition got the idea for using the transfer tax for homeless services from King County, Wash., home to Seattle, where the measure was approved in a ballot referendum.
“We wanted to find something that was in the city’s power to do,” Dworkin said. “This kind of tax, you could make it progressive, rather than the way it is now, where it’s the same flat rate no matter how much the home value is.”
While they have yet to meet with aldermen, representatives for the coalition want the mayor’s office to include the tax in the proposed 2015 budget to be released on Oct. 15. Increasing the transfer tax would require voter approval. Dworkin said the group will consider pushing the City Council to put the issue on the ballot in February.
Homelessness is a major national issue, said Forrest Stuart, an assistant professor of sociology at the University of Chicago, and a tax can’t solve the problem. He said what really needs to change is the way people think about extreme poverty, of which homelessness is one manifestation.
“This has been made into an individual city issue, when it’s bigger than any city,” said Stuart, who has worked with grass-roots organizations to improve the treatment of homeless people in Los Angeles. “Cities are left trying to cure the symptoms of this larger disease.”
In 2003, former Mayor Richard M. Daley endorsed a 10-year Plan to End Homelessness, which made some progress before concluding in 2012. Mayor Rahm Emanuel then endorsed Chicago’s Plan 2.0, a revamped initiative with goals including maintaining more affordable housing and providing more jobs for those at risk of homelessness.
Dworkin said the coalition hopes that the city will add money to the budget for homeless services. Without more resources, she said, the goals of Plan 2.0 will be unreachable.
“I am optimistic,” she said. “This particular proposal for the tax would be a longer-term effort, but we are hopeful that they will propose some increase.”