A Cook County judge Friday ruled that a referendum question funding homelessness prevention in Chicago via a real estate transfer tax increase on the March primary ballot is invalid, dealing a major political blow to Mayor Brandon Johnson and progressive organizers behind the measure.

Cook County Circuit Judge Kathleen Burke’s ruling represents a big win for the real estate industry and development groups that sued to block the ballot measure, labeled by backers as the Bring Chicago Home referendum.

A spokesperson for the Chicago Board of Elections said until a more detailed order comes from the judge, the question will remain on the ballot, but votes on it will not be tallied. The board does not plan on pausing early voting as of now and is evaluating its options for appealing the ruling until an order is entered.

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Judge Kathleen Burke provided little explanation for her decision after a lengthy hearing where she read both sides motions out loud for hours.

Burke also rejected the Chicago Board of Elections’s efforts to dismiss the lawsuit and denied a motion by the city to intervene in the case. A spokesperson for the city’s law department did not immediately respond to a request for comment. In a statement, Johnson’s office said the city “will be exploring every legal option available” and that voters should be the final arbiter of the referendum.

As they left the courtroom following the more than three-hour hearing, organizers and supporters of the ballot question chanted “68K need a place to stay,” in reference to the estimated number of people experiencing homelessness in Chicago.

While the referendum question was in flux, voters were already weighing in through mail ballots and in-person early voting.

Ed Mullen, an election attorney representing the Bring Chicago Home campaign, said after Friday’s ruling he expects the referendum will still appear on the ballot and that voting machines will not be reprogrammed to remove it.

“The order is not going to take this referendum off the ballot. What it’s going to say is that at the end of the process if the appellate court upholds this ruling… the vote would be suppressed and won’t be counted,” Mullen said. “People can still go out and vote for the referendum. The referendum is still on the ballot. No one should stop voting for the referendum just because of today’s order.”

If a court were to reinstate the ballot on appeal and find it valid, Mullen said the results already cast could still be counted – even past Election Day. Supporters said they won’t stop organizing.

“We’re definitely going to continue to knock doors,” said Crystal Gardner, deputy political director SEIU Local 73. “We have canvasses every single weekend. We are not going to let this poor and terrible ruling stop us from engaging residents and voters because at the end of the day it’s their vote. That’s their voice. They get to choose.”

Opponents to the referendum also vowed not to back down. Jeff Baker, CEO of Illinois Realtors, said in a statement, “we will not stop trying to get the word out about how tax burdened Chicagoans are and the need for policy solutions that do not rely on real estate taxes.”

The Building Owners & Managers Association of Chicago, the Chicagoland Apartment Association, the Neighborhood Building Owners Alliance of Chicago and others were among the industry groups that argued the ballot question was unconstitutional and violated state law by asking voters to approve both a tax cut and tax hike at the same time.

The suit asserted the referendum measure is a “textbook example” of a time-honored legislative tactic known as “log-rolling” — combining a politically unpopular proposal with a popular one.

It also argued the ballot question’s purpose of “addressing homelessness” was too vague and did not stipulate in detail how the funds generated by the tax hike would be used.

Farzin Parang, executive director of the Building Owners and Managers Association of Chicago, said the judge’s ruling came as no surprise.

“The way that they worded this question was just, sort of politics and it was vague and it was trying to manipulate people into thinking that they were getting a tax cut when this is, functionally, a property tax increase on everybody,” Parang said. “We’re just gratified that the judge agreed with us.”

Parang acknowledged that, had the challenge to the referendum failed, Johnson and his allies would likely have won.

That made the lawsuit the real estate industry’s best and possibly only shot at defeating the “Bring Chicago Home” effort.

Supporters and opponents still ramped up their campaigns – knocking on doors and fundraising – despite the pending legal action. The ruling is the latest hurdle supporters have faced after advocating for years for voters to weigh in on the issue. A little over a year ago, they couldn’t get a majority of the City Council to hold a hearing on the issue, but a more progressive council and mayor have pushed the issue to the forefront.

The ballot question asks voters if they want to increase a one-time tax on the sale of properties valued over $1 million — while giving a tax cut to the portion of property under that amount.

Voters would decide whether to authorize the Chicago City Council to quadruple the real estate transfer tax on the value of property transactions $1.5 million and over and triple the tax on the value of sales from $1 million up to $1.5 million.

Changing the real estate transfer tax from a flat tax to a three-tiered structure is estimated to bring in an additional $100 million in revenue annually. The money would be used to address homelessness, with advocates pointing to rental subsidies and mental health care as some of the potential uses.

The specific uses of the money would be determined by an advisory board and spending ordinance that would still need to be passed by the City Council if voters approve the measure. Revenue isn’t expected to be budgeted for use by the city until 2026.

Supporters argue the city needs a dedicated revenue stream to combat the rising number of people experiencing homelessness in the city. They estimate approximately 93% of property sales will see a tax cut under the plan.

But real estate and development groups say commercial properties that will bear the brunt of the tax increase will be harmed at a time when the industry is still recovering from high vacancy rates brought on by the pandemic. They also argue the city hasn’t laid out a clear enough plan for how the revenue will be spent, and point to the city’s slow spending of federal relief dollars meant to tackle homelessness.

“No plan has been communicated on how they’re going to spend the money,” said Chicagoland Chamber of Commerce President Jack Lavin, calling the ruling a “victory for taxpayers.” “The city’s just asking for a blank check and saying, ‘Just trust us.’”

Doug Schenkelberg, executive director of the Chicago Coalition for the Homeless, made no attempt to conceal his anger at Friday’s ruling.

“This is about real estate interests trying to subvert democracy,” Schenkelberg said. “This is straight out of the Far Right playbook of trying to disenfranchise voters from supporting something they really care about and want to take action on.”

Former Mayor Lori Lightfoot campaigned on a promise to raise the real estate transfer tax on high-end property sales to create a dedicated funding source to combat homelessness but broke that promise, infuriating what was her progressive base.

Johnson has been determined to avoid that mistake at a time when homelessness has been made worse by the ongoing migrant crisis.

WBEZ’s Mariah Woelfel contributed.

Tessa Weinberg covers city government and politics for WBEZ. Fran Spielman covers politics for the Chicago Sun-Times.