The Policy Shop: The real causes of – and solutions to – Chicago poverty

This edition of The Policy Shop is by Bryce Hill, director of fiscal and economic research

Chicago voters soundly rejected raising taxes on businesses and renters March 19 when they told Mayor Brandon Johnson they didn’t trust his lack of a plan to “Bring Chicago Home.”

Johnson still didn’t seem to get the message, even though many of his neighbors voted against it, failed with the youth vote that propelled him into office and underperformed President Joe Biden in every precinct. His response: “I’m still here, still standing. And I will be punching back.”

That’s a curious response for the guy who is supposed to represent the hopes and dreams of 2.6 million Chicagoans. Who exactly is he planning to punch? The 181,760 voters who thought his tax plan was a bad idea?

Johnson can still be a leader on this issue. He tried division, calling his tax a “mansion tax” and trying to divide the haves and the have-nots. Voters saw through that and recognized the transfer tax for the job killer and rent raiser it was. He should try being a uniter and try the following plan.

The problem persists. Chicago has a problem with homelessness. Some of it is seen in the doorways of the Loop: 990 people counted last year. Most of it is far more difficult to see, with about 6,100 people having some form of shelter. Those staying with friends or extended family or in other unstable housing situations is likely a far greater number.

There’s no doubt the city has an affordable housing problem and that is, in large part, a product of bad policies. We’re feeling the negative economic effects of poor zoning laws and a confusing, bureaucratic construction process.

The city still has $44 million in unused federal pandemic aid to use for homelessness and over $400 million budgeted to leverage in 2024 on homelessness and migrant aid.

Chicago could look at reducing as many zoning and land use restrictions as possible and expanding the legalization of accessory dwelling units to all residential zones. It could streamline housing development and remove barriers to construction.

It could get to work getting people jobs that change the courses of their lives. It could incentivize job creators to come here, boosting the social mobility of our poor.

City leaders could aggressively promote literacy reform in Chicago Public Schools, given that about three-quarters of students failed to read at grade level on the Illinois Assessment of Readiness in 2023. Chicago could work with manufacturing, technology and trade companies to expand apprenticeship programs that are proven ways of accelerating and advancing careers.

To get Chicagoans out of poverty, City Hall could work with Springfield to reduce expensive and time-intensive occupational licensing requirements. Illinois is one of the most regulation-bound states, costing Illinoisans an average of 234 days lost to education and experience requirements for relatively low-wage jobs.

Not about money. Johnson should have known homelessness was not just about throwing more taxes and government at the problem. If that were the answer, it would already be working with the city tripling what it actually spent on the problem during a decade. Triple the spending, but the homeless population remains steady.

Efforts to reduce the number of people experiencing homelessness in the city must be part of a larger plan to reduce poverty. Of the nation’s cities with populations above 1 million, Chicago has the sixth-highest poverty rate, behind Philadelphia (21.7%), Houston (20.7%), San Antonio (18.7%), New York (18.3%) and Dallas (17.8%). Chicago’s poverty rate is well above the U.S. major city average of 15.9%. San Francisco and Austin, which have both received considerable media attention for their homelessness crises, have lower poverty rates than Chicago.

Johnson is a former educator who is intimately familiar with the crisis taking place in city schools, where just 26% of kids can read at grade level and 18% can do math at grade level. These are early indicators of difficulty later on, and leaders need to adjust their approach so students don’t continue to fall behind.

Education and poverty are inextricable. The better the education and the more education a person receives, the less likely they are to be in poverty.

Besides fixing the city schools, any anti-poverty strategies need to include a workforce development strategy. Data shows a job is the most effective way to help people get out of poverty.

So Johnson has plenty to do and to lead on. Attacking homelessness, poverty and ignorance seem like much more worthy foes than swinging on voters you failed to convince.