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* Hal Dardick at the Tribune…
As he took over a system riddled with errors and inequity, Assessor Fritz Kaegi vowed to change the way commercial properties are valued in Cook County.
Now his initial assessments are in, covering the north and northwest suburbs, and they show valuations for commercial, industrial and larger apartment properties increased by more than 74%, compared with less than 16% for homes, a Tribune analysis found.
The result may be a significant shift in how the property tax burden is divided up — with homeowners paying less and business owners paying more. A Tribune analysis shows that if Kaegi’s initial property values stand, businesses would pick up 44% of the combined taxes in those suburbs next year, up from 34% this year. That would shift 10 percent of the property tax burden from homeowners to businesses.
Those new, higher assessments on commercial properties triggered a backlash from the business community. They’re not only concerned about paying more, but they also say the uncertainty his assessments has caused is contributing to a slowdown in commercial property sales throughout the county.
Still, there are multiple opportunities to appeal the assessments, so those numbers could change and dampen the effects of the property tax shift to businesses. […]
Kaegi points to a recent nationwide survey of known cap rates by the CBRE real estate services firm. It shows that Kaegi’s rates are in line with those that businesses and real estate brokers used when evaluating and making purchases.
* Chart…
Suburban business property tax assessments jump under Fritz Kaegi: https://t.co/9NIYHxMmaO via @ReporterHal pic.twitter.com/0hYM3Dvk65
— Chicago Tribune Graphics (@ChiTribGraphics) December 12, 2019
* Meanwhile…
Mayor Lori Lightfoot joined forces with Fritz Kaegi on Wednesday and flatly denied that the assessor’s efforts to fix Cook County’s “broken” property tax assessment system would scare off the development needed to reverse Chicago’s population losses.
“Nobody is trying to shock the system. Nobody is looking to scare away investment from Chicago. We all want to see our residential, commercial and industrial real estate markets thrive. Our success as a city is inextricably tied to the growth and growth needs development to be real. That’s unimpeachable,” Lightfoot said.
Addressing, movers and shakers at the Cook County Assessor’s Market Analyst Day in the South Loop, Lightfoot said she recognizes that “change isn’t easy.” But she argued that “change has to come” because property owners and investors “deserve to know if they’re being treated fairly and uniformly.”
“There needs to be a focus on predictability and stability….I know that predictability is important. But predictability cannot be about enshrining the status-quo,” she said.
* Related…
* Wondering where your property taxes are headed? Kaegi has a tool for you
* Cook County Assessor’s Property Tax Rate Simulator Tool
posted by Rich Miller
Thursday, Dec 12, 19 @ 10:54 am
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Higher assessments. Higher taxes. Reduced values. Reduced borrowing capability. Fewer buyers. Pretty simple.
Comment by Me Thursday, Dec 12, 19 @ 10:58 am
The underlying problem with the Cook County property property tax assessment system isn’t that it was broken, it’s that it was fixed.
– MrJM
Comment by @misterjayem Thursday, Dec 12, 19 @ 11:03 am
The taxing bodies will still collect their levy. This is just a burden shift from one type of taxpayer to another. Makes political sense.
Comment by Donnie Elgin Thursday, Dec 12, 19 @ 11:04 am
Still wondering why stress %biz v. %homes as if either has anything to do with the % of assessments that are an accurate reflection of the value of the property being taxed.
Comment by Annonin Thursday, Dec 12, 19 @ 11:06 am
=== Kaegi points to a recent nationwide survey of known cap rates by the CBRE real estate services firm. It shows that Kaegi’s rates are in line with those that businesses and real estate brokers used when evaluating and making purchases.===
Those complaining, blindly, about property taxes in Cook and Chicago within Cook need to realize property taxes were, generally, kept lower than what was seen as the norm, even in state comparisons.
The recalibrating of these rates is terribly painful.
The reality is Chicago is still a place the world’s business community sees as a place to invest.
Comment by Oswego Willy Thursday, Dec 12, 19 @ 11:06 am
“Still wondering why stress %biz v. %homes as if either has anything to do with the % of assessments that are an accurate reflection of the value of the property being taxed.”
Because, under the previous regime, Cook County homeowners’ properties were routinely over-assessed to offset the routine under-assessment of business properties.
– MrJM
Comment by @misterjayem Thursday, Dec 12, 19 @ 11:19 am
All of this chaos will result in a record year for property tax attorneys.
Everything is working exactly as planned for the ruling class in Illinois
Comment by Lucky Pierre Thursday, Dec 12, 19 @ 11:37 am
No universal healthcare, more poor people going to Cook County Hospital, more people with junk insurance going to Cook County Hospital, more property taxes for Cook County residents. Pretty simple.
https://www.wbez.org/shows/wbez-news/cook-county-set-to-provide-503m-in-free-medical-care-this-year-heres-why/935c3040-ecb0-46c7-9293-6051796235c9
Comment by Da Big Bad Wolf Thursday, Dec 12, 19 @ 11:49 am
Wow. Commercial property taxes out of whack? Who has for decades helped businesses lower their commercial real estate property taxes??? —-for a percentage of the reduction !!
Comment by 19th Ward Guy Thursday, Dec 12, 19 @ 12:00 pm
The assessed value of my house went up 50% with no real change in the underlying value of the home. My tax bill is going up just about that much. Our property tax system is immoral.
Comment by The Way I See It Thursday, Dec 12, 19 @ 12:08 pm
Cook County needs to get rid of their classification system if they truly want to fix the system. Its the only county in Illinois that operates in that fashion so that politicians can “fix” the rates.
Comment by 4 percent Thursday, Dec 12, 19 @ 12:12 pm
=Higher assessments. Higher taxes. Reduced values. Reduced borrowing capability. Fewer buyers. Pretty simple.=
LOL, property values may be increasing slower than in the past but they are still increasing. Most peoples assessments are still well below what a house could sell for. Interest rates are still near historical lows as well.
Comment by JS Mill Thursday, Dec 12, 19 @ 12:18 pm
Lets assume the final assessments are correct after the Assessor adjusted the residential and commercial properties. What the commercial property owners are failing to account for is that they received a property tax break for many years at the expense of the residential property tax payers. The city south folks have been taken the brunt of the inequitable assessments over the years.
Comment by Nagidam Thursday, Dec 12, 19 @ 12:58 pm
Doing what he said he would do.
Comment by walker Thursday, Dec 12, 19 @ 1:02 pm
Here in Central Illinois, my annual property taxes are about 2.3% of the market value of my house. How does that compare to those living in Chicago and/or Cook?
Comment by Downstate Thursday, Dec 12, 19 @ 1:04 pm
They should be happy that got such a big property tax break all of those years.
Comment by Demoralized Thursday, Dec 12, 19 @ 1:10 pm
The property tax lawyers are the only ones happy Demoralized
How is that property tax task force working out? Their deadline was 6 weeks ago.
Democrats Can’t touch the third rail of attorneys in Illinois.
Comment by Lucky Pierre Thursday, Dec 12, 19 @ 1:29 pm
The fallacy of property value is that it only goes UP, no matter what. The reality is it can go down, or even be worthless. Add this to taxing bodies which keep raising tax rates on over-inflated property values, and a property tax system that undertaxed some areas and overtaxed others, and you have a recipe for disaster. At one time my house in a no so well off South Suburb was valued at DOUBLE what it is today. Appeals were useless, being based on inflated “comparables”.
Comment by revvedup Thursday, Dec 12, 19 @ 1:34 pm
Under-assess, get the banks and corporations to build commercial property they might not have otherwise, then jack up the taxes. Good ole bait and switch. Bravo. I used that ploy in Sim City too. Worked great, with the right cheat code.
Comment by City Zen Thursday, Dec 12, 19 @ 1:43 pm
Downstate
We live downstate and own a condo downtown Chicago and I did the comparison over the summer. Downstate the taxes were about 2.3% of FMV while Chicago it was 1.9% of FMV.
Comment by No relation Thursday, Dec 12, 19 @ 2:28 pm
== Under-assess, get the banks and corporations to build commercial property they might not have otherwise, then jack up the taxes.==
How nice for them. They were able to invest the money they would have spent on property taxes in a hot stock market.
Comment by Da Big Bad Wolf Friday, Dec 13, 19 @ 6:22 am
The amazing figure that real estate investment sales are down approximately 40% is telling. It is the market pricing Fritz’ reassessment plus a realization that real estate taxes will continue to have upwards pressure do to budget shortfalls.
Comment by Southwest Sider Friday, Dec 13, 19 @ 7:03 am
==The amazing figure that real estate investment sales are down approximately 40% is telling.==
4% not 40%.
https://markets.businessinsider.com/news/stocks/chicago-real-estate-market-worse-hong-kong-prices-decline-data-2019-12-1028734933
Comment by Da Big Bad Wolf Friday, Dec 13, 19 @ 10:06 am
I’m told that Cook County commercial property taxes are already the highest in the nation. If true, this move isn’t going to help job growth. Ouch.
Comment by Vilolet Seepage Friday, Dec 13, 19 @ 11:08 am