January 2011

Election Day Scorecard: 7 Wins, 3 Losses

Advocacy Program Uses Voter Outreach and Education to Stop Taxes & Regulations on Real Estate

By Michael Scobey, Assistant Director, Advocacy and Local Issues

Last fall the Illinois Association of REALTORS® got involved in an unprecedented number of local referenda issues all of which dealt with granting municipalities additional powers to regulate real estate or impose new taxes. Through the Illinois Association of REALTORS® Advocacy Program, voter outreach and education activities helped to produce election results on Nov. 2 that are positive for the real estate industry.

One issue that comes up in every election cycle is home rule. Pursuant to the Illinois Constitution, a municipality can seek to become a home rule unit if the voters approve it in a referendum. With home rule status comes additional powers to regulate and tax. In past years, several home rule municipalities have abused their powers, particularly when it comes to real estate. They will attempt to control property transfers through point-of-sale inspections and by prohibiting the transfer of property until the municipality is completely satisfied with any issue the city sees fit to enforce. In addition, other home rule units have imposed other regulations on property owners regarding inspections of apartment buildings and vacant homes, landlord-tenant relationships, crime prevention measures. Some home rule units have passed demolition taxes, unfettered impact fees and excessive fees on the inspection programs. Over the years, IAR has found that if a regulation is passed in one community, it is very likely to come up in other municipalities before long.

In November, the following municipalities sought to become home rule: Blue Island, Franklin Park, Indian Head Park, Northfield, River Grove and Worth (all in Cook County). In each town, the Advocacy Program sent mail pieces to voters to inform them of the potential pitfalls of home rule.

Also, in November, IAR helped two local governments attempt to pass a more responsible, broad-based tax policy—one that included a new sales tax. In Shorewood (Will County), a one-cent sales tax was sought by the village, and the REALTORS® supported this measure because it was coupled with property tax relief (a 25 percent rollback in the Village’s portion of the property tax). This measure was approved by the voters, 2 to 1.

Similarly, the Sangamon County Board sought to pass a one-cent sales tax with revenue directed to county school districts(for school facilities) as well as property tax relief (a minimum of $1 million in property tax abatement will be passed). Unlike Shorewood’s sales tax proposal, voters in Sangamon voted this measure down, 55% to 45%.

In the Village of Bannockburn (Lake County), there was an advisory referendum that asked voters whether to rescind an existing ordinance that requires a point-of-sale home inspection performed by the village. The North Shore-Barrington Association of REALTORS® initiated this ballot item by collecting petitions/signatures of voters in Bannockburn to support rescission of the ordinance. The issue might come before the village board in the future in light of the fact that voters supported rescission of the ordinance by a 3-to-1 margin.

Lastly, one more Advocacy victory came in the Village of Riverdale; the Village sought to enact a real estate transfer tax at the rate of $2.00 per thousand (of the sale price). IAR and the Mainstreet Organization of REALTORS® strongly opposed this…and so did voters with 77 percent voting against this new transfer tax.