Although the Cook County Assessor’s Office has made changes to the residential valuation system to provide more equality to the residential property tax process, it has failed to address the same inequities in the commercial property side. In addition, some of the changes to the residential valuation, coupled with rising home prices, is causing homeowners to have sticker shock.
Residential Homeowners Hit with New Assessments, Rising Home Prices
A property assessment determines the amount of the overall real estate tax burden is paid by each property owner. This is coupled with areas of the city that have seen a rise in its property values. However, as Alderman Proco “Joe” Moreno points out, just because a home’s value goes up, that doesn’t mean that the homeowners themselves have more money in their pockets to pay a larger property tax. Moreno’s Northwest Side ward includes communities in which the median assessment rose by 46 percent, which Moreno says outpaced the area’s actual appreciation.
In addition, the new assessment model includes flaws that were left over from the previous system, including insufficient data on the condition of individual homes, the precise location of some homes and other factors.
Commercial Properties Continue Drag on Overall Tax Burden
Although the commercial property assessment defects were noted in the same Chicago Tribune/ProPublica Illinois article, “The Tax Divide,” there were no changes made to that assessment formula. Smaller business owners are still shouldering the bulk of the tax burden because of the undervaluation of commercial and industrial properties. And, according to Assessor-elect Fritz Kaegi, because commercial assessment formulas were not updated, there will remain a disparity, with massive underassessments in some parts of the city and massive overassessments in other parts.
Kaegi is examining how larger cities such as New York City, to gather ideas on how to improve the commercial side of the system.
However, another part of the equation is that the previous assessment system relied heavily on the appeal process, and the Board of Review is still accepting appeals in most parts of the city. Initial numbers indicate that appeals are up 45 percent than the last assessment three years ago. The decisions on the appeals wending their way through the system right now might impact the overall effects of the reassessments citywide.
Assessments are the data point that determines how much of the overall real estate tax burden is paid by an individual homeowner.