North Side Property Owners Still Haunted By Berrios’ Ghost
Will thousands of North Side and Northwest Side property owners continue to be haunted in 2020 and 2021 by the ghost of former Cook County Assessor Joseph Berrios?
As a parting shot after he lost his re-election campaign for assessor to reformer Fritz Kaegi, Berrios raised the estimated fair market value of some properties from 30% to more than 140% in some neighborhoods.
In 2018, the entire City of Chicago was reassessed. The sharply higher valuations sparked mind-bending real estate tax hikes when bills arrived in 2019, and those increases carried into 2020.
A new assessment study commissioned by Kaegi from an international nonprofit organization and released last week found that Berrios valued commercial properties far too low, unfairly shifting more property tax burden onto owners of less expensive properties.
The International Association of Assessing Officers studied commercial property assessments throughout Cook County after Berrios completed his 2018 round of assessments, which affected tax bills mailed in 2019.
Earlier studies also concluded that Berrios’ residential assessments were often inaccurate and tended to overvalue lower-priced properties and undervalue more expensive ones.
Since taking office, assessor Kaegi said he has dramatically revamped the assessment process, especially how commercial properties are valued. He started from the ground up, reworking the assessment formula and drawing on Multiple Listing Service information about sales prices.
For the new study, the international assessors group looked at 1,643 business property sales throughout Cook County in 2018 and compared the sales prices with the assessed values.
It found that in the county as a whole, properties were assessed at a median of 61% of their actual sales price, far from the group’s acceptable range of 90% to 110%. The comparison was even worse in Chicago, where the median valuation of commercial properties was found to be just 52% of sales prices.
The study also found that overall assessments were regressive. That means less expensive properties were overvalued and more expensive ones were undervalued, meaning less wealthy property owners carried more of the tax burden. The problem was worst in Chicago’s central business district and on the Near South Side and the Northwest Side, according to the group’s analysis.
An informal 2019 survey by The Home Front column revealed the following wide lack of uniformity in 2018 assessments for small apartments on Chicago’s North and Northwest sides:
Former Assessor Berrios hiked the estimated fair market value of a vintage Old Town 3-flat 93% to an astronomical $1,973,610 from $1,021,100. Many comparable properties in the neighborhood received reassessment increases of 28% to 34%. After a mildly successful appeal at the Board of Review, the assessed value was lowered 28% to $141,919 from $197,361. However, based on the final 65% assessment increase, the 2018 tax bill jumped a hefty 27.5% to $28,033 from $21,991 in 2017.
A Logan Square greystone 3-flat owner was shocked when former Assessor Berrios raised his property’s fair market value 61% to $683,000 from $424,010. The assessed value jumped to $68,300 from $42,401. The greystone owner raised the question of “uniformity” because the assessor set the market value of several nearby properties much lower. After appeal to the Board of Review, no reduction was granted. As a result, the 2018 tax bill jumped a whopping 52.5% to $12,812 from $8,401 in 2017.
Irving Park. Former assessor Berrios said the 2018 estimated market value on a red brick 6-flat in the Old Irving Park neighborhood skyrocketed an incredible 112% to $949,190 from $448,350. As a result, the assessed value of the building jumped to $94,919 from $44,835. After a successful appeal to the Board of Review, the assessed value was lowered 25.8% to $70,420 from $94,919. However, the 2018 tax bill still jumped a hefty 43.3% to $13,888 from $9,688 in 2017.
“There’s nothing uniform when it comes to real estate tax assessments in Chicago,” said a North Side property owner.
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.