Chicago Homeowner Tax Distribution Shifts
Cook County property tax bills, due to arrive soon, will show a shift in the county’s historically regressive system — one that for years overtaxed poor homeowners and undertaxed wealthy homeowners, according to one expert.
“Within the current constraints, they’ve made huge progress, and it’s a much fairer system now,” said Robert Weissbourd, president of RW Ventures and an expert on fair market valuation models.
For years, in Chicago, the county assessor overvalued homes in lower-income South Side communities. At the same time, the assessor undervalued homes in wealthy communities on the city’s North and Near West sides.
Generally speaking, when homes are overvalued, homeowners pay more. When they’re undervalued, homeowners pay less.
Former Cook County Assessor Joe Berrios was pressured into changing how the office valuated properties before he left office at the end of 2018. Those changes, designed to more accurately reflect the true value of the properties, will be evident in tax bills to be mailed soon. And the changes helped shift the tax burden so that homeowners on the North and Near West sides may feel the pain of much larger increases in their bills than they’ve seen in the past. Meanwhile, South Side homeowners will see more modest increases.
For instance, an analysis by the Office of the Cook County Clerk, which calculates the tax rate, has found that single family residential properties on Chicago’s South Side will go up by an average of 1%. By contrast, those in the north and central parts of the city will see an average increase of more than 11%.
In Cook County, properties are reassessed every three years. Last year, reassessments were conducted for properties in the city of Chicago.
“Some of this is not correcting for the underassessment, it’s just the home values have gone up,” said Weissbourd. “And that’s been a lot of it for some of the really high-priced homeowners.”
Weissbourd has helped to develop property valuation models for the county. He said while the model used to reassess Chicago properties last year was improved, there’s still a long way to go under the county's new assessor, Fritz Kaegi, to minimize regressivity in the county’s property tax system.
“They really now are going to need to just get better data into [their calculations],” he said.
In May, a consulting group of the International Association of Assessing Officers released an audit of practices at the Cook County Assessor’s Office. The audit showed that major deficiencies in data, staffing, technology and the office’s property valuation model led to decades of inaccurate estimates of home values in the county. The audit attributed the data holes to drastic understaffing, particularly of field inspectors to visit each property at least once every six years. It estimated that for the more than 1.8 million parcels in the county, the office was operating with just a quarter of recommended staffing levels.
A spokesman for the assessor’s office, Scott Smith, said it has not been able to hire field inspectors since Kaegi took office. He said the office’s immediate focus is on hiring a training director and human resource specialists. He said that additional positions will depend on 2020 budgets.
But Smith said the office is looking to shore up its data deficiencies with other resources.
“One of the ways in which we’re trying to do that is to get a renewed subscription to the MLS,” said Smith, referring to a real estate listing service that realtors often use. MLS stands for multiple listing service. Smith said the office once had a subscription, but it ended. “Apparently there was a decision made by the realtors to block our office from accessing MLS,” he said. “It’s possible there was some misuse of the data or a concern that we would.”
Smith said the office is hopeful it will be able to restore access to the database, which may help to improve the accuracy of assessments.
Correction: A previous version of this story mistakenly indicated that Bob Weissbourd has consulted with the office of assessor Fritz Kaegi.
Odette Yousef is a reporter on WBEZ’s Race, Class and Communities desk. Follow her @oyousef.