Property taxes hit low-income areas hard
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While office tower values shrank in recent years, homeowners — especially in the city's poorest neighborhoods — paid the price, a new Cook County Treasurer's report says.
Why it matters: The study helps explain why homeowners and renters have seen their taxes and rents rise in recent years, adding to the city's housing cost burden.
- From 2021 to 2023 commercial real estate owners saw their property tax bills drop by $3.3 billion, while homeowners took on nearly $2 billion more in taxes.
Yes, but: Those years wreaked havoc on the commercial real estate market as remote work slashed demand for office space. So their lowered valuations and taxes aren't a huge surprise.
By the numbers: The analysis revealed that business property owners appealed their valuations more than twice as often as homeowners.
- While business reductions rose to $25.5 billion from 2021 to 2023 (compared with $9.9 billion from 2015 to 2017), assessed value reductions for homeowners declined.
What they're saying: The Board of Review "cut $17.3 billion in commercial property values on appeal, turning $22.5 billion of potential growth into an increase of just $5.2 billion," Cook County Assessor spokesperson Christian Belanger tells Axios.
The other side: The BOR reduced the assessment because "the Assessor has been overvaluing properties," BOR commissioner Samantha Steele tells Axios.
- Our "role is to give the taxpayers their due process. … It's time for the Assessor to do the basic functions of the office and get the assessments right in the first place."
Of note: An independent analysis of CCAO and BOR actions suggests that both agencies have mis-assessed values, albeit in different county regions.
Rich vs poor neighborhoods: Homeowners in the wealthiest neighborhoods were four times more likely to appeal their assessment than those in the lowest-income areas, the Treasurer's report says.
- Appeal rates in primarily white neighborhoods were 35.5% but 10.85% in Black and 14.06% in Latino areas.
- The tax burden from appeals increased by about 5% in high-income areas and about 10% in low-income areas.
The intrigue: Filing appeals can seem daunting (and we explain how to do it here), but the analysis suggests it can make a difference, citing these two examples:
- In one Census tract of Gage Park, a low-income majority Latino community where only 5.2% of homeowners appealed, tax bills rose nearly 23%.
- But in a tract of high-income, majority white North Center, 60% of homeowners appealed their assessment; tax bills rose less than 15%.
What's next: Belanger says the assessor's office will be "sharing information and working with the BOR on joint standards for property valuations" to create a more "uniform process."
- And Steele says her office is contacting communities of color to assist in the appeals process.