Chicago Property Tax Hikes A Mystery To Many Homeowners
Arrows are pointing in multiple directions to explain Chicago’s dramatic property tax increases, according to an analysis by Cook County Treasurer Maria Pappas.
For example, homeowners in some gentrifying Latino neighborhoods on the North and Northwest Sides of Chicago were hit with eye-popping increases of nearly 46%.
The analysis, Pappas’ report on 1.8 million properties, examined bills for the 2021 tax year, and shows overall property taxes across Cook County rose by $614 million. The 3.8% increase, for a total tax bite of $16.7 billion, will pay for schools, public safety, medical care, parks, libraries and other government services.
Tax bills on more than 406,000 residential properties increased, while nearly 318,000 homeowners will pay less. Tax bills for more than 32,000 commercial properties rose—particularly in Lincoln Park, the Near South Side, and Rogers Park—while taxes on nearly 37,000 declined, the study found.
However, the increased tax burden is not shared equally, Pappas admitted. Homeowners will pay 53.6% of the tax hike rise, while businesses will pay 46.4%.
“The median property tax for a Chicago home now stands at $3,599, an increase of 7.8%, or $261 over 2020, Pappas said.
Some Chicago communities—affluent areas along the north lakefront and pockets of working-class Latino neighborhoods—saw their property taxes jump dramatically.
The increase in taxes in some gentrifying Latino neighborhoods likely will raise concerns that
residents will be priced out of their homes.
In the Lower West Side, a predominantly Latino community, the median homeowner’s tax bill increased by $2,275 to a whopping $7,239, a 46% jump over 2020’s property taxes. In Avondale, another predominantly Latino community, the median tax bill shot up 27%.
A spot survey by the Home Front column generally found widespread 2021 tax increases ranging from 9.4% to 24.3% on an assortment of North Side homes and small apartment buildings.
However, increases in the rapidly gentrifying Avondale neighborhood—bounded roughly from Diversey to Addison and from Pulaski to the North Branch of the Chicago River—posted increases of around 23.6%
“There are still inequities in our property tax system and we need to straighten it out,” said Pappas, who annually studies the impact of property taxes.
Meanwhile, on the other side of town, homeowners in many struggling, predominantly Black neighborhoods saw significant reductions in their median taxes. One West Garfield Park homeowner taxes was overjoyed when his tax bill plummeted nearly 45%.
Overall, the median tax bill for homeowners in Chicago rose nearly 8%. Pappas’ analysis revealed that four key factors drove those increases:
A new Illinois property-tax law allows many governments to “recapture,” or recover, the total of any taxes refunded to property owners who appealed their taxes the previous year. This new recapture law added $131 million to tax bills across Cook County. Chicago Public Schools received a windfall of $32.3 million, the largest recapture payment in Cook County. Pappas said the newly recapture law represents “an annual tax increase.”
Property assessments, which are used to determine how much someone pays, rose dramatically across the city this year—fueling a $141 million increase into the city’s special economic development funds, known as Tax Increment Finance Districts. However, none of that money may be used to cover government services, so it is effectively an additional property tax, Pappas said.
Mayor Lori Lightfoot and the City Council increased the amount of money it needed for operations by $94 million, and Chicago Public Schools increased its tax levy by $114 million.
Cook County Assessor Fritz Kaegi last year reduced the values of homes anywhere from 8% to 12% because of the COVID-19 Pandemic. However, the estimated market values of homes now have risen. Meanwhile, the Board of Review, the tax assessment appeal agency, is dramatically lowering commercial assessments set by the Assessor. This action caused more of the overall tax burden to fall on homeowners.