In order to help Cook County property owners during this global pandemic, Cook County Assessor Fritz Kaegi’s office has applied a “COVID-19” adjustment to property values.
How Residential Properties Will be Adjusted
The Assessor’s Office’s actions come on the heels of property value increases that had reflected the real estate market of a pre-pandemic world. Now, however, the office predicts that home values will decline, in part, because of the high unemployment rate.
The first decreases will be on assessed values of properties in the south and west regions of Cook County. These will be applied to all properties, including condominiums, single-family residences, apartment buildings, and other commercial properties. The reduction on condos and single-family homes is thought to be between 8 and 12.2 percent and the reduction on apartment buildings that contain two and six units being between 10 and 15.2 percent.
These tax adjustment modifications are being calculated in 2021 on the 2020 assessed values since the current property taxes were based on 2019 assessments. Other data that was used was neighborhood increases in unemployment; neighborhoods with larger increases in unemployment had larger adjustments. These adjustments also don’t necessarily mean the overall property tax bill will decrease. That is still based on the total tax levy set by local taxing bodies.
How Commercial Properties Will be Adjusted
Commercial property adjustments will be put into place by changing the capitalization, or cap, rate. The cap rate is property income, which is divided by property value to essentially arrive at a rate of return. Most commercial property cap rates will be raised by 2 percentage points, which equates to a 25 percent decrease in property values.
Other data that was used to make commercial value adjustments included information on:
- Apartment rent collections, which are expected to be lower for April and May than historical levels.
- Retail rent collections for March through May will be significantly lower than historical levels.
- Hotel occupancy rates have collapsed, especially hotels connected to convention centers.
- Restaurant and public entertainment venues will be under pressure for an extended period of time.
Property adjustments will be made at a later date for properties in Chicago and in the North Cook County suburbs.
Cook County has also waived late fees for taxpayers who fail to make their second-half property tax bills by Aug. 3.