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The Home Front

Homeowners in some gentrifying Latino neighborhoods on the North and Northwest Sides of Chicago were hit with eye-popping property tax increases of nearly 46 percent over 2020, likely to raise concerns that they will be priced out of their homes.

5-Dec-22 – Arrows are pointing in multiple directions to explain Chicago’s dramatic property tax increases, according to an analysis by Cook County Treasurer Maria Pappas.

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 percent increase – 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, Near South Side, and Rogers Park – while taxes on nearly 37,000 commercial properties declined, the study found.

However, the increased tax burden is not shared equally, Pappas admitted. Homeowners will pay 53.6 percent of the tax hike rise, while businesses will pay 46.4 percent.

The median property tax for a Chicago home now stands at $3,599, an increase of 7.8 percent, or $261 over 2020, according to Pappas.

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 the 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 percent jump over 2020’s property taxes. In Avondale, another predominantly Latino community, the median tax bill shot up 27 percent.

Photo by Andrew Jameson

(Left) Street corner in the Pilsen neighborhood, part of Chicago’s Lower West Side. Photo by Andrew Jameson. (Click on image to view larger version.)

A spot survey by The Home Front generally found widespread 2021 tax increases ranging from 9.4 to 24.3 percent 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 percent.

“There are still inequities in our property tax system and we need to straighten it out,” said Pappas (right), who annually studies the impact of property taxes.

Maria Pappas

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 was overjoyed when his tax bill plummeted nearly 45 percent.

Overall, the median tax bill for homeowners in Chicago rose nearly 8 percent. Pappas’ analysis revealed that four key factors drove those increases:

1 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 new recapture law represents “an annual tax increase.”

2 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.

3 Mayor Lori Lightfoot and the Chicago 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.

4 Cook County Assessor Fritz Kaegi last year reduced the values of homes anywhere from 8 to 12 percent 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.