By Dermot Connolly
A significant increase in Chicago property taxes, with some local neighborhoods seeing hikes of more than 40% in some cases, has neighborhood organizations calling for action from County and State officials.
Some residents and community groups have blamed Cook County Assessor Fritz Kaegi, questioning why the most recent tax bills were issued in November—too late to have an effect on the Nov. 8 election.
Alderman Byron Sigcho-Lopez (with glasses at right) and members of Pilsen Alliance. Both are concerned about rising property taxes pushing longtime homeowners out of the community.
His office contends, however, that the issue is more complicated and assigns blame to the Cook County Board of Review members in place before the 2022 election.
“There are many contributing factors to why the property tax bills in the City of Chicago increased,” said a spokesperson for Kaegi. “The assessor’s office is one part of a very complex property tax system.”
An analysis of nearly 1.8 million 2021 property tax bills done by Cook County Treasurer Maria Pappas’s office found Cook County property taxes rose by $614 million to $16.7 billion, according to the final bills issued last year. Residential property taxes went up $330 million, or 53.6% of the total, while commercial properties such as businesses, industries, and large apartment complexes accounted for the remaining $284 million.
“Unfortunately, we are seeing increases of as much as 46%,” said Moises Moreno, executive director of the Pilsen Alliance, a social justice organization that works with local homeowners, business owners, and tenants.
“This is something that we saw coming in the summer of 2021, when these new assessments came out,” Moreno said. “We were the first to sound the alarm. We knew they would result in higher property taxes.”
New provision hikes taxes
Pappas’s study found the new Recapture Provision in the Illinois tax code added $131 million to tax bills because it allows some local governments to increase property taxes by the amount of money they had refunded to property owners who appealed their taxes the previous year.
In Chicago, the Recapture Provision, higher property values in tax increment financing (TIF) districts, and increased tax levies set by City Hall and Chicago Public Schools led to property taxes rising $468 million, with homeowners bearing the brunt of about 60% of that because assessments of commercial properties grow less than those for residential property in general.
“The Recapture Provision, the TIF effect, and changes made by the Cook County Board of Review after the assessor’s initial valuations were all contributing factors,” said the assessor’s spokesperson.
The assessor sets value on properties in Cook County, based on recent real estate market data, indicating what a property would sell for in today’s market; reassessments in Chicago lowered homeowners’ share of the total assessed value for Tax Year 2021 by 5.9% from 2020’s numbers, according to the spokesperson.
“At the conclusion of the assessment process, and after decisions on appeals filed with its office, the assessor’s office determined the 2021 share of residential assessed value in Chicago was 46.2 percent, and the non-residential share of assessed value was 53.8,” the spokesperson continued.
Board reversed assessor
“However, the results of the assessor’s work were reversed, in part, by appeal reductions granted by the previous administration of the Board of Review. These results significantly reduced non-residential property assessments and shifted more of the city’s assessed value to homeowners. The Board of Review’s reduction in nonresidential property assessments increased homeowners’ share of assessed value to 52.8% and lowered non-commercial share of assessed value to 47.2%,” the spokesperson said.
“In the domain of Chicago property taxes, all neighborhoods are interconnected: assessments in the Loop affect tax bills throughout the entire city,” she continued.
In other words, if a neighbor successfully appeals an assessment to the assessor’s office, Board of Review, the State Property Tax Appeal Board, or a Circuit Court, it may reduce that person’s bill but cause everyone else’s bill to increase.
For instance, according to the assessor’s spokesperson, appeals granted by the Board of Review to 559 high-end Chicago properties resulted in a $2.7 billion reduction in taxable value—nearly 3% of Chicago’s total tax base. This drove up Chicago’s tax rate and increased the tax bills of every other property owner in the city.
“Gentrification that has been taking place for years” is another reason the spokesperson cited for significant increases in property taxes and assessments seen in many neighborhoods.
Kaegi and his staff have met with local community leaders to discuss the issue and held three community workshops in February to help people directly. The office found that 25% of homeowners had not applied for exemptions to which they were entitled and plans to launch a local exemption marketing campaign to help seniors make sure they benefit from all exemptions due to them.
From $3.5K to $11.5K
At one of those local meetings, a Pilsen homeowner said she typically gets a $3,500 property tax bill for the three-flat her family has owned for decades. This year, she reported receiving a bill for $11,500.
Ald. Byron Sigcho-Lopez (25th Ward) said his ward, which includes neighborhoods such as Pilsen, Little Village, Chinatown, and Little Italy, has been affected most, citing the 46% spike.
“An increase like that should be illegal,” he said. “My community sees this disproportionate tax increase for what it is—yet another effort to use the institutional tools at hand to displace our residents and our beautiful community.”
Sigcho-Lopez expressed concerns that ethnic communities such as those in the 25th Ward are in danger of disappearing.
“We will push back by organizing and strategically pushing for the policy change needed for our families to stay in their homes,” said the alderman.
“We are planning to come to join forces with other community organizations,” Moreno said. “We can’t do this alone.” He noted Pilsen Alliance has been in touch with Sigcho-Lopez and other officials about rising property taxes.
“We are going to be focusing on the large picture,” Moreno said. “We want to preserve our homeowner base. These people are vulnerable.”
Moreno said participants discussed the issue at a Pilsen Alliance membership meeting held in late February.
He pointed out tax hikes are affecting apartment owners as well, and tenants are concerned about rents going up.
“Some folks say they are going to pass [the cost] on to their tenants,” said Moreno. “Others say they are going to move to the suburbs. We’re fighting multiple battles now.”
“I appreciated hearing from one man that he would absorb the costs himself because he doesn’t want lose tenants,” he added.
“We want to propose longterm solutions to our State representatives,” Moreno said. “Sorting out the real estate property taxes needs to come at the State level.”
Sigcho-Lopez agreed.
“We know ultimately, given the different actors that affect our property tax system, Governor [JB] Pritzker will ultimately have to deliver the changes our community needs,” the alderman said. “Our community has been regularly meeting to discuss the changes we need in order to preserve our community and culture, and we will be exercising our rights to express to the governor how our right to stay in our community is non-negotiable. He has the duty to change the tax burden on our working families to reflect that fact.”
Kaegi’s spokesperson said the assessor is meeting with legislators to work on expanding the Longtime Homeowner Exemption, which would help longtime homeowners across Cook County.
“The assessor’s office is resetting the assessed values of 559 large commercial properties mostly located in the central business district of Chicago,” the spokesperson said, noting it is attempting to return the values of these properties to their 2021 levels.
“In doing so, the assessor’s office offers the Cook County Board of Review an opportunity to verify these assessments, which would otherwise not be reviewed again until 2024 when properties are reassessed,” she explained.
Sigcho-Lopez said his constituents “are demanding collaboration between the treasurer, assessor, and the Board of Review to advocate for a stable property tax system that is centered around ability to pay.“
He believes the City also must look for alternate sources of revenue that do not allow “big financial interests to receive subsidies or cuts while longtime residents of my ward in century-old buildings have had their taxes double or triple,” he said.
“The property-tax appeal system is a $500 million-a-year business,” he added.
For the Cook County Board of Review, log on to www.cookcountyboardofreview.com. For the Office of the Assessor, log on to www.cookcountyassessor.com. For Pilsen Alliance, log on to www.thepilsenalliance.org/. For Sigcho-Lopez’s office, log on to www.25thward.org/ or call (773) 523-4100 during business hours.