Category: News

Reviewing the City Council subcommittee’s sixteen revenue-raising ideas

September 16, 2024 / / 0 Comments

Mayor Johnson asked 6th Ward alderperson William Hall to solicit ideas about how to fund the City of Chicago budget. The Chicago Tribune reported on these:

The Google [Forms] survey he included asked aldermen to respond “Yes” or “No” to the following ideas, with no added descriptions: “Sales Tax on Services; Property Tax (CPI Increase); Monthly/Wireless Plan Tax; Increase in LGDF Share; Head Tax; Alcohol Tax; Checking Bag Tax; Video Gaming Tax; Grocery Tax; City Sticker Increase; Congestion Tax; Income Tax Surcharge; Package Tax; Vacant Lot Tax; Ticket Reseller Amusement Tax; Enterprise Zones.”

I’ll briefly describe each one based on my own knowledge of these taxes. Note that these are possibilities and not suggestions.

  • Sales tax on services. Chicago doesn’t have a sales tax on most services (think haircut or tax preparation). (Chicago has a tax on some services, like the “Personal Property Lease Transaction Tax” which applies to services that use cloud computing, including Netflix!)
  • Property tax increase based on inflation. Mayor Lightfoot implemented this for a few years but Mayor Johnson did not renew it.
  • Wireless plan tax. This one confuses me because Chicago already taxes monthly cellular service.
  • Increase in LGDF share. LGDF is the State of Illinois local government distributive fund and the idea here is to convince the state legislature to increase the share that that the City of Chicago receives. Some data points that I think could be in favor of increasing the city’s LGDF share: Cook County receives back only 88% of what it contributes to state taxes (Paul Simon Public Policy Institute, page 37).
  • Head tax. This is a tax employers would pay for each employee they have. Mayor Emanuel and City Council phased out the head tax in 2014.
  • Alcohol tax. Chicago applies its own liquor tax, currently starting at $0.29 per gallon of beer up to $2.68 per gallon for anything containing 20% or more ABV.
  • Checking bag tax. I presume this refers to the existing Checkout Bag Tax, which is set at 7 cents per checkout bag sold at retail stores (the store can keep 2 cents of this to help subsidize the cost of the bag).
  • Video gaming tax. This would mean legalizing video gambling and taxing it.
  • Grocery tax. Governor Pritzker and the Illinois General Assembly eliminated the 1% grocery tax starting in 2025, revenues from which are distributed to municipalities. In return, the state allowed cities to implement their own grocery tax. Richard Day opines why it would be a bad idea for Chicago to implement such a regressive tax.
  • City sticker increase. A city sticker is a fee for the privilege of being able to park a car for free across much of the city.
  • Congestion tax. This would create a fee, surcharge, or tax for the privilege of driving a personal vehicle, and for the city to recover the costs and negative impacts, into the downtown area during specified times.
  • Income tax surcharge. I’m not sure what the surcharge means but Chicago currently doesn’t have an income tax.
  • Package tax. I don’t know what this means, but Hall told the Chicago Tribune that the package tax would “look at weights and distribution of packages that move throughout the city.”
  • Vacant lot tax. This would probably act as a kind of land value tax but would probably be implemented as an additional property tax on vacant lots (I assume any parcel that the county classifies as “1-00” would be eligible for this).
  • Ticket reseller amusement tax. Another tax that already exists; presumably this would be increasing the tax paid by people buying tickets for amusements (which includes concerts – you can see a list of all of the registered amusement tax businesses).
  • Enterprise Zones. I can’t make sense of this because Enterprise Zones are an existing state incentive area; there are six in Chicago. This “give” money (in the form of state sales tax breaks on construction materials and waiving the state’s portion of the real estate transfer tax in some situations) to property owners.
A vacant lot in Bronzeville. Land value tax would fix this.

Further reading

The Civic Federation came up with their own list of possible revenue sources and indicated if they require a state statute to authorize.

It’s impossible to track the many investment programs in disinvested Chicago neighborhoods

September 14, 2017 / / 0 Comments

An article in the Chicago Tribune that announces Chase bank’s increase in the amount of grants it is offering in Chicago goes on to detail myriad existing grant, loan, and donation programs from public and private sources for neighborhoods that have few jobs, few resources, no privilege, and lots of quality of life problems.

But not all of the programs. There are more, but I don’t even know how many more, nor do I know all of their names. I just know that I’ve read about them before.

The article is where I learned that Benefit Chicago – a $100 million investment fund  operated by the Chicago Community Trust, MacArthur Foundation, and Calvert Foundation, but hasn’t finished raising all the money – has started giving out loans and grants to Chicago recipients, including Garfield Produce Company.

Calvert Foundation has a brokerage (I think that’s the best name for it) through which regular Chicagoans can invest $20 minimum and earn 1.0% interest on that investment after 1 year. Longer periods net higher returns.

Anyway, back to my point…

If I were a business owner in Chicago, and I wanted financial assistance to expand my business – say, buy more kitchen equipment to be able to produce more food – where would I start looking?

Is there a list somewhere? Will my alder know? Is there a group in my neighborhood that can help me track down a funder? Is this more complicated than getting a VC to fund a “Bodega killer“?

One of the things I’ve tried to do with the tens of thousands of maps on Chicago Cityscape is highlight when a business or property owner could be eligible for financial assistance based purely on their geography.

Map of areas where you, as a business or property owner, can get funding assistance from publicly-funded programs.

These geographers where government funding is available are marked with a green icon of a dollar bill that links to a Resources page I adapted from a pamphlet the city’s planning department used to produce. These include:

  • TIF (tax increment financing) districts, including whether the district participates in the Small Business Improvement Fund
  • MMRP (micro market recovery program)
  • Enterprise Zone (a state of Illinois program)
  • Industrial Growth Zone (expedited approval processes + environmental remediation money)
  • Special Service Area (SSA; business improvement district)
  • Chicago landmark and National Register of Historic Places districts
  • Planned Manufacturing Districts (PMD), although I forget what assistance is available here
  • Neighborhood Opportunity Fund zones (an interesting policy that charges developers for additional density and grants that money to small business owners on the South and West Sides)

Not every area within the above categories is in a disinvested neighborhood because not every program was designed for that. 

Green dollar bill signs on Chicago Cityscape

Once you know this, I guess you can target your research. But there’s still a lot more to do. To start: Where the heck is Chase investing? Where the heck is Benefit Chicago investing? They don’t publish maps, as far as I can tell.

Actually, thinking about this more, as I reach nearly 400 words in this blog post, I’ve got another idea: Show up at Rahm’s new Small Business Center at City Hall and ask them.

We can actually measure the “character of the neighborhood”

June 18, 2017 / / 0 Comments

The vacant lots on the 2300 block of W Erie Street are owned by the City of Chicago.

At many public meetings about development proposals, people oppose new housing on their block because it “doesn’t fit in with the character of the neighborhood”.

This is often a code or mask that the person is trying to prevent anything from changing on their block (a.k.a. NIMBY), and sometimes trying to prevent a certain kind of person (poor, Black, disabled, veteran, you name it) from living near them.

Chicago is selling six vacant lots (marked as one parcel & PIN) to a developer for $6 who will buy six single-family houses that will cost about $247,000. Only a person or family who earns up to 120 percent of the area median income could apply to purchase the house; they have to live in it for 15 years.

The other dominant building type on the block are these one-story single-family houses.

I personally think that two-flats should be built here, because land is expensive and scarce, and there should be more affordable housing everywhere in Chicago.

Are there objective ways to measure the character of a block or neighborhood? Sometimes when people say character they mean that the proposed buildings are too tall, relative to existing buildings. Other times they mean that theirs is a single-family neighborhood and thus anything with more than one unit per lot is “out of character”.

One of the common building types on the block are these masonry single-family houses.

I can measure that. I’ve started developing a query against the Cook County property tax database that Chicago Cityscape has which will count the different property types on any given block.

One of the six lots is 2327 W Erie St (it’s currently classified as “UnClassified”). Here’s a breakdown of the other property types on the block:

  • Residential garage (1 of these)
  • Apartment building with 2 to 6 units, any age (5 of these)
  • One Story Residence, any age, 1,000 to 1,800 square feet (10 of these)
  • Two or more story residence, up to 62 years of age, 2,001 to 3,800 square feet (8 of these)

The dominant building type is a single-family house smaller than 1,800 square feet. The proposed houses will have 2,500 square feet and two stories, which is similar to the characteristics of the second most present building type on the 2300 block of W Erie St.

I’ll be rolling out this feature within a couple of weeks on Chicago Cityscape after some more testing. (Right now it can only grab the properties in the red boundary on the above map, and not the corner properties that have addresses on the intersecting streets, because the query uses string matching to find addresses on “W ERIE ST” with building numbers between and including 2300 and 2399.)

Which block do you want me to test?

City selects buyer for former fire station in Rogers Park

June 1, 2017 / / 0 Comments

This was originally published on Chicago Cityscape’s Medium.

The city-owned fire station at 1721 W Greenleaf Avenue in Rogers Park is set to be sold to Jim Andrews and Dean Vance (no relation). Chicago Cityscape visited the building at an open house in February.

This was the third attempt to sell the property, and the Chicago Plan Commission will review the sale at its June 15th meeting.

Photos of the fire house taken during the February 2017 open house by Justin Haugens.

The two created a website dedicated to their proposal, and published a video introducing Scott Whelan, a developer who will be helping renovate the building. Whelan’s company, Red Line Property Group, pulls building permits mostly in the Edgewater and Lincoln Square community areas.

The image on the top-left shows the original bay doors. Renderings from the buyers’ website.

Andrews and Vance will locate their existing businesses to the building, restore the façade and historic features, add a garden and greenhouse to the rooftop, and provide on-site parking for up to 10 cars. Sustainable design features include photovoltaic solar panels on the roof, passive solar hot water, and geothermal heating and cooling.

Read their full proposal.

Chicago’s ward boundaries should go down alleys instead of main streets

February 10, 2017 / / 0 Comments

Dividing a small part of a business district, centered on one street, into three fiefdoms cannot be an efficient way to govern a neighborhood, aggregate resources, or provide services.

This graphic illustrates how many elected “stakeholders” – each with their own ideas – a city transportation department and its contracted engineers have to deal with to repave a street and rebuild the sidewalks.

The constituents are the same, however. They are all small business owners, and if you want to get together and advocate for change, you’ll have to make three different appointments.

Say the first elected official supports your small group’s proposal. Are they going to talk to the next door elected official and collaborate?

Naw. Not in Chicago. This is the city where a bike lane will be repaired on a street, but only up to the point where the fiefdom boundary ends, because the next official didn’t want to pay for the maintenance on their side.

I can see one situation where having three boundaries is good: Say one of the official is really good, responsive to needs, pushes for street upgrades, spends their discretionary funds in ways that you like, and attracts more businesses to locate there.

The next door official, however, isn’t as responsive or “good”, but they want those businesses to locate on their side of the street. They’ll become better, in essence, competing.

I don’t think this happens in Chicago, because you’ll tend to have officials who are about the same.

The depicted project was proposed a little over four years ago, and is now complete, it appears.