Taxing Us to Homelessness

A Call to Action for Property Tax Reform by the Northwest Side Housing Center and Homeowners United

Top 5 Reasons Cook County Needs Property Tax Reform Now:

1.     Illinois residents pay the second-highest property taxes in the country.[1] The burden caused by this unusually high tax rate has been levied among the people living in Cook County.

2.     Cook County’s property tax assessments rob from the poor to pay for the rich: Commercial property and property in high-value areas are often underassessed, while properties in low-income areas have a history of being over-assessed, which was confirmed in a 2018 Chicago Tribune investigation into the Assessor’s Office practices. In 2014, for instance, a building on Oak Street in the Gold Coast neighborhood sold for $14.9 million. The next year, the Assessor’s Office valued the building at $3.6 million, less than a quarter of the sales price. A year after that, in 2016, the building sold for $23 million. Eight miles west, a small industrial shop in the working-class Belmont Central neighborhood sold for $110,000 in 2015. The Assessor’s estimate that year was $207,140, nearly double the sale price.[2] According to an estimate by a group of researchers at the Harris Public Policy School at the University of Chicago, between the 2011 and 2015 a $800 million burden in property taxes was shifted from the highest 10 percent of properties in the city to the bottom 90 percent. The researchers go further and say most properties in Chicago that would sell for under $200,000 were regularly over taxed by over 20% and most of those over 900,000 were regularly under taxed by 20%.

3.     The property tax system in Cook County is too heavily relied upon for education funding, is inequitable and ineffective, and is an unsustainable financial burden for working-class residents. In 2017, 68% of school funding came from a local source, whereas only 24% came from the State, making Illinois the most underperforming state in the country for education funding.[3]

4.     The current assessment process favors commercial areas: The previous Assessor classified properties and often underassessed them, and the manner in which commercial and vacant property was assessed often resulted in the over-taxation of areas with fewer commercial and industrial properties. This process has not changed.

5.     No taxation without representation: The Assessor’s Office determines assessed property values and no official, not even the Mayor, can veto the decision. There is no public input in reviewing either the property classifications or the models and formulas used for how assessments are determined. As seen under the administration of Joe Berrios, this practice of secrecy and unilateral decision-making breeds inequities and unfairness and therefore must end.

What the Northwest Side Housing Center is Doing:

Cook County’s property tax crisis is no accident. This unequal taxation landscape was brought upon through the unfair practices led by former County Assessor Joe Berrios who deliberately over-assessed properties in neighborhoods with lower-income and working-class residents and under-assessed those in high-income areas. Kaegi campaigned on reform—now he needs to be held accountable for those reforms.

We are giving a list of demands to Cook County and the Assessor’s Office for the following:

1.     Using the evidence presented in the 2018 Chicago Tribune investigation, change the assessment process in order to:

a.     Reduce the amount of class incentives that major developers can qualify for on a single property.

b.     Monitor commercial vacancy tax relief more closely and commit to revoke any commercial vacancy tax relief proven to be fraudulent.

c.     Create a Community Advisory Committee of community stakeholders by August 1, 2019 to review the property classification system and to review any new models and formulas for determined assessed values, and make recommendations to the Assessor’s Office. These recommendations and minutes of meetings would be posted on the Assessor’s Office website.

2.     Increase transparency regarding proposed assessment model and formula; including full details and a timeline for implementation of the new model by August 1, 2019.

3.     Increase transparency regarding commercial property value reporting by beginning to include Illinois Property Tax Appeal Board (PTAB)[1] and appeal values online by December 1, 2019.

4.     Written support of HB 2168: Property Tax Incentive for Affordable Rental Homes[2] If passed, this legislation would give tax incentives to owners of multi-unit properties who keep their units affordable.

5.     Partner with the NWSHC, Second Federal Self-Help Credit Union, and Woodforest National Bank to create an emergency fund to pay delinquent taxes for struggling homeowners by December 1, 2019.

6.     Commit to host community workshops to raise awareness about changes in property tax rates in the event of the introduction of a progressive graduated income tax. This would require statewide legislation to increase Illinois Income Tax revenues which would result in more funding from the state for education rather than from property taxes. Governor-elect J.B. Pritzker is in favor of such reform.

 

What You Can Do:

1. Join the Northwest Side Housing Center’s Homeowners United, a group of homeowners working together to advocate for policy changes to help all property taxpayers, which will help raise the quality of life for all. Call us at 773-283-3888 ext 108 and ask for Julio Rodriguez, Executive Director of NWSHC’s subsidiary Northwest Side Community Development Corporation, or email Jrodriguez@nwshc.org.

2. Call the Cook County Assessor’s Office and voice your support for these reforms: 312-443-7550. Your voice matters!

[1] http://www.ptab.illinois.gov

[2] https://housingactionil.org/downloads/Policy/HB2168_PropertyTaxRentalHomes_Factsheet.pdf

[1] https://www.chicagotribune.com/classified/realestate/ct-re-0408-property-taxes-primer-20180402-story.html

[2] https://features.propublica.org/the-tax-divide/cook-county-commercial-and-industrial-property-tax-assessments/

[3]https://www.illinoisreportcard.com/state.aspx?stateid=IL&source=environment&source2=revenuepercentages

Laura Slabaugh