Chicago Council Pushes Mayor on Alternative Budget

- The approved alternative budget, which became law without the mayor's signature, avoids a controversial corporate "head tax" and a direct property tax increase. Instead, it raises revenue by increasing the personal property lease tax on items like cloud software from 11% to 15%, expanding the sports wagering tax to online betting, and raising the checkout bag tax. - While this budget avoids a property tax hike, Chicago's CFO warned in July 2025 that an increase is "likely" to be part of the solution for a projected $1 billion budget gap for the following year, signaling potential future pressure on property owners. - The city's finances are also strained by delayed property tax revenue distributions from Cook County, with the city still waiting on about $135 million from tax year 2024 as of early February 2026. - For real estate investors, the multifamily sector shows strong fundamentals, with rents forecasted to grow by 3% in 2026 on top of a 4.6% year-over-year increase in the third quarter of 2025, driven by the lowest new construction pipeline among major U.S. markets. - The market for attached homes, such as condos and townhouses, has shown significant strength, with median sale prices rising 10.7% year-over-year according to a Q3 2025 report. - The budget dispute highlighted a significant political shift, with a coalition of over two dozen alderpeople, including Ald. Brendan Reilly and Ald. Marty Quinn, successfully challenging the mayor's agenda, an event some have called a historic assertion of City Council independence. - Neighborhood-level demand remains strong in areas like the West Loop, Lincoln Park, Lakeview, and West Town, where well-priced properties continue to attract buyers, supporting steady appreciation. - The alternative budget's passage followed a contentious period where the mayor's office estimated the council's plan would leave a $163 million shortfall, a figure disputed by the alderpeople who formulated the proposal.