On Tuesday, voters of the third-largest city in the U.S. chose Brandon Johnson as their new mayor. A paid political organizer, Johnson has been a registered lobbyist for the Chicago Teachers Union for nearly a decade and needless to say they are pleased to have their man elected. While his victory is a major win for the hyper-political union, the outcome appears to be a disappointment to the city’s real estate sector.
Chicago’s real estate players have criticized Johnson for his support of hiking transfer taxes on property sales for more than $1 million. The proposal, which is supported by an organization called Bring Chicago Home, is expected to generate an additional $163 million in tax revenue each year, purportedly to fight homelessness. The legislation, which has been proposed several times over the past few years, is opposed by almost all business groups and real estate organizations in the city.
Recent worries in the commercial real estate sector, such as rising interest rates that have slowed acquisitions across the nation and, more lately, bank failures that have made financing even more challenging, could be exacerbated by Johnson’s proposed taxes. However, whether or not Johnson’s policies will be approved by the City Council and implemented remains to be seen.