Hefty spring rent hikes are on the horizon for Chicago’s apartment dwellers—especially for renters in neighborhoods outside downtown, analysts say.
Tens of thousands of beleaguered “Ma and Pa” landlords are preparing to be walloped with extraordinary real estate tax hikes reflecting 30-percent-plus assessment increases when second installment bills arrive in early August.
Experts say the 2015 increases handed out last year by Cook County Assessor Joseph Berrios reflect the reassessment of the entire City of Chicago. Tens of thousands of properties were slapped with large assessment increases ranging from 30 percent to 55 percent, according to a spot survey by The Home Front column.
“If the 33-percent assessment increase we received translates into a 33-percent tax hike, we will need to bump our rents more than $2,000 a year,” said the owner of a Logan Square 4-flat. “That means a $75-a-month increase on a typical 3-bedroom apartment.”
Mayor Rahm Emanuel says the city needs to raise $588 million in new revenue to pay for pensions of teachers, police and firefighters.
The Chicago property tax wallop comes at a time when Illinois already is recognized for the dubious achievement of posting the highest median property tax rate in the nation, not to mention the highest sale-tax rate in America.
A new coast-to-coast analysis of property taxes by Core Logic revealed that various Illinois agencies and governmental entities now take a combined 2.67 percent real estate tax bite.
That means that an Illinois homeowner with a residence valued at $200,000 will, on average, pay annual property taxes of $5,320. In contrast, the national median property tax rate is 1.31 percent. So, an owner of a $200,000 home in Indiana, Missouri or Iowa likely pays a property tax bill of only $2,620.
As if the real estate tax bite were not enough, homeowners and landlords of small rental properties should beware of the new “Garbage Fees of Rahm,” because starting in May Chicago’s new refuse charges also will kick in.
Single-family homeowners will pay a garbage fee of $19 every other month, or a total of $114 a year retroactive to January of 2016. Two-flat owners will pay a $38 garbage fee every other month, or a total of $228 from January through December this year.
Three-flat owners will pay a garbage fee $57 on alternate months, or $342 for the year. The garbage fee for 4-unit buildings will be $76 every other month, or $456 per year.
Garbage fees will be included in the city’s first unified utility bill, which will reflect two months of water, sewer and garbage charges.
The May water/sewer/garbage bill from the City of Chicago Department of Finance’s new “Utility Billing and Customer Service” unit will include an invoice for March and April water and sewer service charges and two months of garbage service charges.
The May bill will also include two months of “catch-up” billing for garbage services received in January and February of 2016.
Therefore, in May the owner of a typical North Side 4-flat, who currently pays $198 every two months for water and sewer charges, will be billed an additional $304 for garbage fees covering January, February, March and April. That’s a total of $502 in one bill!
With garbage-fee shock like that blowing in the wind, it is not surprising that the city of Chicago—in a rare act of kindness—is waving all late-payment penalties for the garbage fee in 2016. Landlords and homeowners can space out their catch-up garbage fee charges over multiple utility bills without any late additional fees, the city says.
There also are multiple utility-bill payment plan options available to property owners. A 50-percent discount rate ($4.75 per month per home or apartment unit) is available to low-income seniors who are enrolled in the Cook County Assessor’s Senior Freeze Exemption program. Visit: http://www.cookcountyassessor.com.
For more information on the Chicago garbage fee, call the Utility Billing Call Center at 312-744-4426, or visit: http://www.cityofchicago.org/garbagefee.
For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.