Tax hikes are hitting small apartment building owners as properties within the city of Chicago were reassessed this year, which, in turn, will impact renters.
According to a spot survey by The Home Front, assessment increased 40 to 112 percent on smaller north and northwest side small, family-owned apartment builders. These building owners are now planning rent increases in the double digits to cover the radically higher second installment of the 2018 tax bill. Those tax bills will come due in August 2019.
Solution Must be Found to Offset Pension Shortfall
Chicago Mayor Rahm Emanuel’s $588 million property tax increase will be phased in over four years. And though it seeks to double the homeowner’s exemption to $14,000, which would reduce taxes for about 419,000 households, the remaining burden of the tax bill would fall on apartment building owners. It’s estimated that office and apartment buildings could see their tax bills rise about 5 percentage points.
The mayor says this property tax bill is necessary for the city to raise funds in the hundreds of millions-of-dollar range to pay for pension shortfalls for teachers, police officers, and firefighters.
However, the tax assessments seem to be disproportionately targeting the smaller mom and pop buildings that are six units or fewer, homes or two-flats, because those are the building owners that will more than likely have to pass the cost on to renters to help cover the new taxes.
Since pensions will continue to be an item that the state needs to be funded, it could be time for some revenue-generating solutions that do not come from raising property taxes.
Loop North News, a website that provides news on the Loop and River North, has published some suggested tax-revenue-generating ideas for the city to pursue. These include:
- Pension subsidies from the Pension Benefit Guarantee Corporation, which is a U.S. government agency that guarantees failed pension plans. This would require modification of federal and state laws.
- Pension debt relief, which is something the city of Detroit did when it was in federal receivership. Chicago and the state of Illinois could renegotiate pension debt downward by 50 percent or more.
- Legalizing and taxing marijuana. Chicago could also invest in marijuana by licensing retail pot shops to fill vacant storefronts.
- The city could get in on the gambling craze and open up a world-class casino and heavily tax it.