5-Aug-18 – Skyrocketing “estimated fair market value” of homes, condominiums, and small apartment buildings in 2018 is causing reassessment sticker shock for tens of thousands of property owners on Chicago’s north and northwest sides.

Cook County Assessor Joseph Berrios currently is mailing reassessment notices to all Chicago property owners, township by township. The notices reflect increases in market value of most homes.

Critics say Berrios (left) is raising the estimated fair market value of some properties from 20 percent to more than 100 percent in Lake View and Jefferson townships as a parting shot after he lost his re-election campaign in March to challenger Fritz Kaegi of Oak Park.

Tom Shaer, spokesman for Berrios, said the higher estimated market values reflect a healthier real estate market following the Great Recession, “the worst housing crash in history.”

Earlier this spring, Shaer said it is “complete nonsense” that politics played any role in the handing out of higher estimates on market value.

The lofty market value increases translate into sharply higher assessed values – and that could spark some mind-bending real estate tax hikes when bills arrive in 2019, analysts say.

In Chicago, the 2018 expected property tax bill increases will come due in August 2019, when the second installment of the bill arrives. Many North Side apartment building owners are planning hefty rent increases next year to pay the expected sharply higher 2018 tax bills, experts say.

In 2018, the entire City of Chicago was reassessed. For many of the properties the assessments have increases ranging from a manageable 12 percent to a whopping 112 percent, according to a spot survey by The Home Front.

Mayor Rahm Emanuel says the city needs to raise hundreds of millions of dollars in new revenue to pay for pension shortfalls for teachers, police officers, and firefighters. However, crystal ball gazing into the outlook for the expected 2018 property tax hike, payable in 2019, is cloudy.

“The property tax bill is determined by four factors – the assessment, the equalization factor or multiplier, the tax rate, and the exemptions,” said Michael Griffin (right), a Chicago real estate tax appeal attorney. “In 2018, a triennial tax assessment year in Chicago, homeowners should appeal their assessment because they are likely to see a new higher assessment.”

Homeowners also should review their exemptions because they can reduce their tax bill if they have the proper exemptions, Griffin noted. The three main exemptions are homeowner’s, Senior Citizen, and Senior Freeze.

The homeowner’s exemption recently was increased to $10,000 from $7,000, and the Senior Exemption was hiked to $8,000 from $5,000. Those amounts are deducted from equalized assessed value of a home to which tax rates are applied, to determine individual tax bills.

Also, more seniors are qualified for the Senior Freeze because the Illinois Legislature increased the maximum annual income to receive the freeze to less than $65,000 from less than $55,000.

“Every homeowner should review their last tax bill to see if they received the proper exemptions and contact the assessor if the exemptions are wrong,” Griffin advised.

Real estate taxes will rise, but by how much?

Real estate taxes for 2018 are expected to rise when paid in 2019. However, predicting a hefty property tax increase next year really centers on two wild cards – the tax rate and the state equalization factor, which can’t be challenged by taxpayers.

The equalization factor is established each year for Cook County to bring property tax assessments in line with other parts of Illinois. The value is determined by the Illinois Department of Revenue. The multiplier was pegged at 2.9627 in 2017, up from 2.8032 in 2016.

When real estate values sank in 2008 during the Great Recession, the multiplier skyrocketed to 2.9786 and then peaked at 3.3701 in 2009. It hovered at a lofty 3.3 in 2010 before slipping to 2.8056 in 2012 as the real estate market started to recover.

(Left) Condominium in Jefferson Park neighborhood on Chicago’s Northwest Side.

The main engine that drives up property tax bills is the amount of money spent by local government. For example, homeowners who read their 2017 tax bills will see the continued increased spending for schools and for police, firefighter, and teacher pensions.

Chicago’s 2017 tax rate rose slightly to $7.266 per $100 of assessed valuation, up from $7.169 per $100 of assessed valuation in 2016.

“The 2017 tax rate in Chicago was higher, and so was the state equalization factor,” noted Griffin. “With the sharply higher 2018 assessments in the city, the multiplier and the tax rate should go down if the amount of money that local governments request remains the same as last year.”

Griffin said the other problem is that the assessment increases vary from small to large for Chicago homeowners, “so everyone should appeal their assessment to reduce the assessment increase to as small a level as possible.”

An informal survey by The Home Front revealed the following assessment increases for homes, condos, and small apartments on Chicago’s North and Northwest sides... • Irving Park. The assessor said the 2018 estimated market value on a red brick six-flat in the Old Irving Park neighborhood skyrocketed an incredible 112 percent to $949,190 from $448,350. The assessed value of the building jumped to $94,919 from $44,835. Paid in 2017, the 2016 tax bill on the property was $9,015. • North Lincoln Square. The 2018 estimated market value on a 1920s yellow brick four-flat in the Arcadia Terrace section of the neighborhood increased 40.67 percent to $506,580 from $360,100. The assessed valuation of the building rose to $50,658 from $36,010. Paid in 2017, the 2016 tax bill on the property was $7,463. (Right) Apartment building in North Lincoln Square. • North Park. The 2018 estimated market value on a newer frame home in the North Park/Hollywood Park neighborhood on the Northwest Side rose a modest 12.46 percent to $588,190 from $523,010. The assessed valuation of the home increased to $58,819 from $52,301. Paid in 2017, the 2016 tax bill on the property was $9,650. • Norwood Park. The assessor said the 2018 estimated market value on a large brick home in the Old Norwood Park enclave on the Far Northwest Side skyrocketed 68.2 percent to $781,380 from $464,600. The assessed valuation of the home jumped to $78,138 from $46,460. Paid in 2017, the 2016 tax bill on the property was $9,023. • Ravenswood. The 2018 estimated market value on a vintage graystone three-flat in the Ravenswood section of Lake View jumped 71 percent to $524,970 from $307,030. The assessed valuation of the building rose to $52,497 from $30,703. Paid in 2017, the 2016 tax bill on the property was $7,310. • Ravenswood Manor. The assessor said the 2018 estimated market value on a vintage red brick two-flat catapulted 79.7 percent to $549,640 from $305,890. The assessed valuation of the building jumped to $54,964 from $30,589. Paid in 2017, the 2016 tax bill on the property was $5,645. • The Villa. The 2018 estimated market value on a vintage stucco home in the Villa Historic District near Addison Street & Pulaski Avenue shot up 81 percent to $625,000 from $346,020. The assessed value of the home jumped to $62,500 from $34,602. (Left) Intersection of West Waveland Avenue & North Springfield Avenue in Chicago’s Villa Historic District. • West Ridge. The assessor said the 2018 estimated market value on a two-bedroom, one-bath condominium on the Far North Side increased 19.9 percent to $128,640 from $107,210. The assessed valuation of the condo jumped to $12,864 from $10,721. Paid in 2017, the 2016 tax bill on the property was $1,647.

Experts say property owners who think they are over-assessed should appeal now before they receive next year’s tax bill. If you wait until the tax bill arrives in 2019, it will be too late to appeal. Visit the assessor’s website at www.cookcountyassessor.com or call 312-443-7550 to find comparable properties or start the appeal process.

Deadlines for filing appeals at the assessor’s office for various townships...

• Jefferson – August 16
• West – August 24
• Lake – August 30
• North – September 14
• South – October 5

Deadlines for filing already have passed for Rogers Park and Hyde Park townships.

If appealing at the assessor’s office does not lower the assessed value, there are other appeal options – Cook County Board of Review, Illinois Property Tax Appeals Board, or call Michael Griffin, an expert tax assessment lawyer, at 312-943-1789.