9 years of decline: Expect Chicago to be No. 4 behind Houston by 2035

Chicago lost 8,208 residents in 2023, the third-largest decline of any city in the nation. At this rate, the Second City will drop from No. 3 to No. 4 by 2035

Chicago suffered its ninth consecutive year of population decline in 2023, losing 8,208 residents from July 2022-July 2023, according to data released May 16 by the U.S. Census Bureau.

Chicago suffered its ninth consecutive year of population decline in 2023, losing 8,208 residents from July 2022-July 2023, according to data released May 16 by the U.S. Census Bureau.

Chicago’s population first began declining in 2015. Since then the city has lost more than 128,000 residents.

Last year’s population drop was the third-worst of any city in the nation, with only New York (-77,763) and Philadelphia (-16,294) losing more residents.

While population losses were less severe across the nation in 2023 than in recent years – likely because of slowed outmigration amid rising interest rates and home prices – Chicago has lost nearly 82,000 residents since April 2020, the second-most of any city in the nation and ahead of only New York.

If recent population trends hold, Chicago will soon be overtaken by Houston as America’s third-largest city. Houston is currently on track to grow larger than Chicago in 2035.

The latest data from the Census Bureau confirms Illinois’ outmigration and population crises are ongoing and continue to plague Chicago. Illinois’ population loss and outmigration crises have been continuously affirmed by data from the U.S. Census Bureau, IRS, as well as U-Haul, United Van Lines and Allied Van Lines moving companies.

While the new city-level data does not break down population change by components such as domestic and international migration, births and deaths, Illinois’ population declines during the past decade have been solely attributable to domestic outmigration. The same is very likely true for Chicago – the city’s population is declining because residents are fleeing.

When taxes were not a response option, surveys of those who have left the state showed the major reasons were for better housing and employment opportunities. Both have been made worse by poor public policy in Illinois.

High taxes were the No. 1 reason Illinoisans considered leaving the state. Polling from NPR Illinois and the University of Illinois found 61% of Illinoisans thought about moving out of state in 2019, and the No. 1 reason was taxes. The Paul Simon Public Policy Institute found 47% of Illinoisans wanted to leave the state in 2016. It also found “taxes are the single biggest reason people want to leave,” with 27% citing that motive. More recent polling conducted by Echelon Insights in 2023 substantiated these sentiments.

Despite repeated evidence of population decline being driven by a hostile tax environment that does little to foster labor market and housing opportunities for residents, Mayor Brandon Johnson is boosting his calls to raise taxes on Chicagoans.

While voters rejected Johnson’s signature real estate transfer tax hike at the polls last November, the mayor has said he hasn’t given up on finding avenues to raise $800 million in new taxes on Chicagoans. Johnson on May 8 was in Springfield seeking $1 billion in additional funding from the state for Chicago Public Schools, $900 million in bond funding for a new Bears stadium, increased funds to remove lead service lines and additional tax revenue to be shared with the city.

Rather than hiking taxes on a struggling city, Johnson’s focus should be on rehabilitating his relationship with the city’s business community and finding sustainable solutions to reversing Chicago’s population decline. The first step in this process will be to negotiate a responsible contract with the Chicago Teacher’s Union that protects taxpayers.

A 142-page leaked set of demands shows the union is making a long list of radical and expensive demands, which CTU President Stacy Davis Gates said would cost more than $50 billion.  Now the union is heading to the bargaining table with the Johnson administration. Johnson is a former CTU employee and activist who the union bankrolled into office last year.

The costly new demands would require massive tax hikes for Chicagoans, likely exacerbating the city’s population decline. Negotiating a reasonable contract that respects taxpayers and doesn’t simply cave to aggressive union demands will be essential to avoiding Chicago becoming the Fourth City.