Chicago’s Commercial Real Estate Market Struggles to Recover, Burdened by High Taxes

Chicago’s commercial real estate market continues to face challenges in its recovery from the pandemic, lagging behind other major cities like New York. The demand for office space in Chicago witnessed a decline in 2023, indicating that a full recovery for the downtown area may be years away. In contrast, cities like New York experienced a significant rebound in demand, while tech-oriented markets on the West Coast remain stagnant.

One of the factors contributing to this slow recovery is Chicago’s high commercial property taxes, which are the second-highest in the country. According to a study by the Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence, Chicago imposes a commercial property tax rate of 3.78%, more than double the national average for major cities in each state. Only Detroit surpasses Chicago with a tax rate of 4.21%.

This disparity can be attributed to various factors. The study highlights that low property values in Detroit, which faced bankruptcy in 2013, result in a higher commercial property tax rate for properties worth over $1 million. In contrast, Chicago’s high rate is a consequence of excessive local government spending and an imbalanced tax system that places a heavier burden on businesses.

Despite already bearing the second-highest commercial property tax burden in the nation, Chicago Mayor Brandon Johnson is proposing an additional tax increase for businesses. The recent proposition, known as the “mansion tax,” aims to generate $100 million in tax revenue by raising real estate transfer taxes on properties selling for over $1 million, including commercial and industrial real estate. This move is highly problematic, considering the record-high downtown office vacancies and plummeting commercial real estate values in Chicago. Imposing higher taxes on downtown businesses will further exacerbate the challenges faced by the city’s struggling businesses.

It is evident that Chicago’s commercial real estate market faces significant obstacles in its recovery, and the burden of high taxes only adds to the challenges. A more conducive environment is needed to encourage growth and attract companies to invest in the city. Balancing tax rates and addressing the underlying issues affecting the market will be crucial for Chicago’s commercial real estate sector to regain its strength and contribute to the city’s economic recovery.


この遅い回復の要因の一つは、シカゴの高い商業不動産税です。シカゴは全米の主要都市で最も高い商業不動産税率を課しています。Lincoln Institute of Land PolicyとMinnesota Center for Fiscal Excellenceの調査によると、シカゴの商業不動産税率は3.78%で、各州の主要都市の全国平均の約2倍です。税率4.21%のデトロイトのみがシカゴを上回っています。


全米で商業不動産税の負担が2番目に重い状況であるにもかかわらず、シカゴ市長のブランドン・ジョンソンは企業にさらなる税の増加を提案しています。最近の提案は「邸宅税(”mansion tax”)」として知られ、100万ドルを超える物件(商業および工業用不動産を含む)の不動産譲渡税を引き上げることで約1億ドルの税収を生み出すことを目指しています。これは、シカゴのダウンタウンのオフィスの空室率が過去最高を記録し、商業不動産の価値が急落している状況を考慮すると、非常に問題のある動きです。ダウンタウンの企業により高い税を課すことは、市内の苦境に立たされている企業が直面する課題をさらに悪化させるでしょう。


1. Commercial real estate market (商業不動産市場): Market for buying, selling, and leasing property for commercial purposes.
2. Pandemic (パンデミック): A widespread outbreak of a disease that affects a whole country or the world.
3. Downtown area (ダウンタウンの地域): The central business district of a city.
4. Property taxes (不動産税): Taxes levied on real estate, usually based on the value of the property.
5. Tax burden (税の負担): The amount of taxes an individual or entity is required to pay.
6. Real estate transfer taxes (不動産譲渡税): Taxes imposed on the transfer of real estate from one owner to another.

Suggested related link: City of Chicago Official Website