As property owners face sticker shock from the fresh round of tax bills that went live last week, a key new set of data offers an early view of how much higher next year’s bills could get.
As of this month, Cook County Assessor Fritz Kaegi’s reassessment notices have made their way into every mailbox in Chicago’s north and northwest suburbs, which are undergoing a review for the first time since 2019. They point to a relative cooldown from Kaegi’s previous pummeling of commercial landlords while homeowners are on track for more heartburn.
Kaegi rode into office in 2018 on a promise to level the playing field after a blockbuster Tribune and ProPublica investigation found that previous Assessor Joseph Berrios was artificially deflating the taxable value of ritzy commercial properties, leaving homeowners to pay more than their share. Assessments do not determine how much tax is levied overall, but rather how much of the burden each property should shoulder compared to its neighbors.
Kaegi’s first round of reassessments, released in 2019, aimed for a course correction by hiking total assessments on commercial and industrial properties in Cook County’s north-suburban townships by nearly 74%, while residential assessments only ticked up by 16%. Landlords and real estate groups howled, warning of catastrophic tax hikes after they saw their assessments double or triple in some cases.
This year, reassessments for commercial properties again outpaced those for homeowners — but the gap was much smaller. Kaegi’s office calculated a nearly 33% increase in assessments for residential properties, while commercial and industrial assessments grew by just over 47%.
Kaegi, who was reelected to a second term this year, predicted on the campaign trail that assessments would level off once his office began a second pass on properties that his team has already put under the microscope. Now, his office says the latest numbers are evidence his prediction is coming true.
“On the whole, commercial property assessments in 2022 are not seeing the type of increases seen in 2019 as most properties are now closer to market value than they were before,” Assessor’s Office spokesman Scott Smith wrote in an email to the Illinois Answers Project.
However, some landlords in the north suburbs are still contending with eye-popping assessment hikes that may translate to a higher tax bill next year.
For example, overall industrial assessments rocketed up by 85% in Leyden township, which includes suburbs south and east of O’Hare Airport, and office and retail properties there saw assessments climb nearly as fast. Apartment buildings in Northfield Township, which includes tony suburbs like Glenview and Northbrook, saw their collective assessments more than double.
And multiple industrial property owners in Elk Grove Village, which has seen an explosion in new shipping and distribution centers, are reeling from assessment hikes of 100% or more.
Still, the impact of sharply higher commercial assessments will likely be softened by residential valuations rising nearly as fast.
The residential assessment hike by nearly one-third — with the biggest jumps registered in the high-end New Trier, Leyden and Hanover townships — represents a rebound from Kaegi’s 2020 “COVID adjustment,” when the Assessor’s Office under-valued residential properties across the county because he predicted the pandemic would crater the housing market. Thanks in part to the break he gave homeowners, many townships posted even lower combined residential assessments last year than they did in 2018, according to data from the Assessor’s Office.
The new reassessment notices represent the first step in a long chain of processes that will culminate in next year’s property tax bills. Kaegi’s office remains locked in a feud with the Cook County Board of Review, which every year has taken a bite out of his office’s higher commercial assessments by granting thousands of landlords’ appeals. Kaegi released a report last week blaming the board for erasing more than $6.5 billion in taxable value from Chicago commercial properties, upping the tax pressure on homeowners.
Smith said many of the lingering commercial hikes in Kaegi’s 2022 reassessments were “corrective increases” following significant breaks by the Board of Review last year.
“With assessments that more closely track market value, property owners will see more predictability and certainty than before as our system depends less on appeals,” Smith wrote in his statement. “But continued reductions of large commercial property assessment by the Board of Review prevent the property tax system from becoming more predictable, especially for homeowners and small businesses.”
William O’Shields, Chief Deputy Commissioner of the Cook County Board of Review, retorted in a separate statement that Kaegi’s office has repeatedly used a “flawed methodology” that overstates the value of commercial and industrial properties.
“What is lost in the clouded CCAO [Cook County Assessor’s Office] ‘shift’ rhetoric is that the majority of Cook County homeowners directly depend upon a Commercial or Industrial enterprises for employment, goods, essential services as well as the tax revenue that funds their respective local municipalities,” O’Shields wrote. “The closing of a grocery store due to over taxation is devastating. The CCAO’s ‘shift’ and ‘blame’ catch words are a bit long in the tooth but more importantly, fail to accurately capture the ‘real’ impact of excessive taxation on ‘real’ people, all Cook County taxpayers.”