Evanston Teardown Tax Lawsuit Gets New Life

Evanston's "teardown tax" a/k/a the Affordable Housing Demolition Tax, requiring a $10,000 fee to demolish a house and build a new one, with the proceeds to go to affordable housing, will apparently continue to be litigated in the federal courts. A lawsuit challenging the tax was dismissed by the federal trial court, who found that the federal Anti-Tax Injunction barred the case. However, the federal appellate court for the Seventh Circuit last week reversed the dismissal of most of the counts, saying that the ordinance was more a regulatory device (to inhibit teardowns and promote affordable housing) than a true tax.

The appellate court also ruled that the owners had standing because they alleged that they would suffer a loss of property value.
This case was probably one of the recent causes for executive session in the City Council. A copy of the full decision is available online. This post will refrain for now from comparisons between the City's record in major litigation and the Chicago Cubs' record in the playoffs.