For years, Cook County tax assessments have been riddled with errors, so each new assessment has just compounded the issue for both commercial and industrial property owners. Property owners must appeal their taxes to seek relief and should remain vigilant in verifying that the next tax bill properly reflects the assessment granted after appeal.
The assessor’s office must re-value every property in Cook County every three years per Illinois state law. However, for years, the initial valuation placed on as many as 33% of all commercial and industrial properties in Cook County by the Cook County Assessor was the exact same amount at the time of that year’s reassessment as the property’s previous initially proposed reassessment value prior to any appeals and corrections.
Commercial Property Difficult to Assess
ProPublica, in conjunction with The Chicago Tribune, analyzed the Cook County tax rolls and found that some buildings were initially assessed the same amount of taxes both pre-recession, during the recession—at a time when virtually all properties lost value—and post-recession.
About 20,000 commercial and industrial parcels had the exact same assessment estimates in 2009 and 2012, during the recession when most property values plummeted. Another 15,800 property’s initially proposed assessments did not change between 2012 and 2015 when property values should have been recovering as the recession ended.
There are many variables that should go into making these initially proposed assessment estimates, including rents, expenses per square foot, vacancy rates and more, and because these variables are often changing, the estimated values should fluctuate to reflect that. However, for a large minority of the buildings, these initial assessments didn’t change over two or three assessment periods.
Although it’s more difficult and time-consuming to estimate the market of commercial and industrial properties for purposes of proposing a reassessed value, it is still possible to do so. As stated in the ProPublica’s findings, although residential properties are valued using computer programs and algorithms, the assessor’s office values commercial and industrial properties individually on spreadsheets grouped by type and neighborhood.
There are not as many commercial, industrial and large apartment buildings as residences and they do not sell as often. Therefore, the Assessor’s office does not have complete information on the commercial and industrial market at the time of his initially proposed assessment. The Cook County Assessor’s Office seems to rely on information provided during the property tax appeals process to provide a more realistic final property assessment.
Although the attitude about the necessity of the accuracy of initially proposed assessments may change once Fritz Kaegi is sworn in as the Cook County Assessor, the current Assessor encourages appeals to obtain full information, because the end assessment is the number the taxes are based on.
It is standard practice to conduct sales ratio studies for each class of property being assessed, which means looking at properties that have sold to see how well the assessor’s estimates compare to the actual market value. However, at least prior to this current assessment that is focused on reassessing Chicago properties, the Cook County Assessor’s Office doesn’t conduct sales ratio studies.