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Market prognostications from top Chicago developers

PHOTO VIA PIXABAY

It has been a “full speed ahead” start for industrial real estate so far this year, which is largely a result of the pent-up demand caused by the major pandemic-induced pause in 2020. We figured it would be as good a time as any to check in with several of the top developers in Chicago to see what their thoughts are going forward, asking each the same three questions.

That is the first of a two-part series, so keep an eye out next month for additional insight from these industry leaders.

What are your prognostications for the real estate markets in 2021 and 2022?

Mike Yungerman, Senior Vice President & General Manager of Opus Development Company: The speculative construction boom will continue, but sites are more difficult to find and entitle today. Steel and precast lead times continue to push out. Because of that I don’t see us hitting the spec space numbers we saw in the 2008-‘09 peaks. Class A rents will continue to grow at a modest pace, primarily due to increased construction pricing. With Class A rents rising, the gap in rents compared to second generation space and Class B product is widening. This could steer more tenants toward second generation spaces and slow down the absorption velocity in new product.

Neal Driscoll, Midwest Region Partner of Dermody Properties:  We continue to see a ton of growth ahead across the entire country. Efforts to improve the supply chain and logistics efficiencies will continue to increase demand for highly functional infill locations as well as on the periphery of major metropolitan areas. This is true of both primary and secondary markets.

Jeff Lanaghan, Senior Vice President & Partner, Midwest Region of CRG: We expect the industrial space to stay robust for the near term as tenants continue to rethink their supply chain logistics. Amazon will continue to be a huge consumer of industrial product and many of their competitors will try to close the gap.

Don Schoenheider, Senior Vice President & Market Leader, Midwest Region of Hillwood: With strong user demand, continued low interest rates, and capital continuing to look for opportunities in the industrial space, we don’t expect much change over the next couple of years.

Susan Bergdoll, Vice President of Leasing & Development of Duke Realty: While the end of the pandemic is in sight thanks to mass vaccinations, we do not see the demand for well-located high quality logistics space waning anytime soon. Customer and market share gained by e-commerce companies will not be lost. All retailers and consumer products companies are investing hundreds of millions of dollars to upgrade their logistics facilities and supply chain networks across the country. Chicago’s supply and demand have remained in check for the past couple of years. We remain hyper-vigilant of the market pace. We are prepared for changing market dynamics and an increase in demand for more conveniently located logistics facilities and last-mile e-commerce distribution centers.

Matt Goode, Principal of Venture One Real Estate: We have observed two major drivers of value in industrial over the past 12 to 36 months that we believe will continue to push values upward in the coming years. First, there is a lack of supply of functional industrial space, driven by increased demand from e-commerce users and a lack of high-quality sites to build new product. As a result, we have seen low vacancy rates and strong rental rate growth. Second, investor demand has never been greater for industrial. This is the result of strong performance within the asset class and poor performance in competing asset classes such as office and retail.   Because industrial values are lower than office and retail, investor demand has outpaced supply, and driven prices upwards.

With record high rents and record low cap rates, we are seeing values for industrial that are shattering prior high-water marks. We believe this will continue in 2021 and into 2022.

Tony Pricco, President & Partner of Bridge: The real estate market will continue to be made up of the haves and have-nots. Industrial, specifically well-located warehouse/distribution facilities, will continue to thrive as e-commerce continues to grow. Amazon will continue to lead all users in absorption nationally, but we assume other major retailers will get into the mix as well this year.

Part 2 of the “Industrial Insider” will feature the developers’ perspectives on these two additional questions: What’s Hot and What’s Not, and What are the biggest challenges the industry faces in 2021. Stay well and stay tuned for Part 2!

 

A Call for Municipal Pension Reform

Where is all the Money Going?

Property taxes keep going up, but services aren’t improving. Paying more and getting less is a trend that residents want to see reversed.

Real estate agent Andrew Carlin knows Illinois’ property tax math all too well. He not only makes his living helping people buy and sell homes, he’s also a homeowner.

He purchased his 1,000-square-foot home in Lake County in 2016. Back then, the annual property taxes were about $2,500. The next year his bill jumped to $4,500. By 2021, Carlin’s property taxes hit $7,000.

“In Lake County, the property tax amount is a major driving factor in affordability and a buyer’s decision on purchasing a home,” Carlin said.

“We love where we live, not because of the municipal services, but because we grew up here and our families are here. We’re on the edge of selling and moving to a different community or a different township or a different county that has less government bodies that are funded by property taxes. That means going over the border right now to Wisconsin or potentially going to McHenry County in an unincorporated area.”

So where is property tax money going?

The reality is that tax dollars are getting diverted away from the things people value – like schools and public safety – and being spent on public pensions instead. Total residential property taxes in Lake County have increased 122% from 1999-2019 (51% when adjusted for inflation).

Only 19 percent of municipal property tax dollars raised for fire departments is spent on protecting the community from fires. Residents saw funding to fire departments cut by $1.3 million while funding for fire pensions increased by $13.8 million from 1999 to 2019.

The pension crowd-out problem is the same for police departments. From 1999 to 2019, Lake County property taxpayers spent an additional $32.2 million on police, but pensions consumed a vast majority of these funds. About 84 cents of every additional property tax dollar for municipal police departments in Lake County – more than $27 million – went to pensions rather than police protective services.

People like Carlin love Illinois. It’s home. So it’s disheartening to see people fleeing, either because they’re forced out because their home is becoming unaffordable or they’re losing confidence that Illinois is a place where they can prosper long term.

“I’m used to a business where I’m helping clients sell their starter home or their forever home, and buy their move-up home or downsize home,” Carlin said. “The last nine months have been the most odd as far as the amount of people selling their home and not buying, which means they’re selling and leaving for other states.”

This is a huge problem for Illinois and one that politicians must fight to reverse. And the change has to come from Springfield.

Pension reform is the only way to make sure property taxes don’t spike again year after year as the cost of public retirements continues to grow out of control.

The Illinois Policy Institute has proposed a constitutional amendment that would protect what workers and pensioners have already earned while controlling the growth in future benefits. That amendment was filed in the General Assembly in 2020 as House Joint Resolution Constitutional Amendment 38, but was not voted on or even debated in a committee hearing, in part because the legislative session was cut short by COVID-19.

Recent polling from the Paul Simon Public Policy Institute found 51% of Illinoisans support “an amendment to the Illinois Constitution that would preserve state retirement benefits already earned by public employees but would also allow a reduction in the benefits earned in the future, whether by current or future employees.”

Lawmakers have the will of the people when it comes to getting pensions under control. Now it’s time they find the will to do what’s right and tackle pension reform.

Nashville, Tenn. Reverses Property Tax Increase

Nashville Mayor: Property tax to be cut ‘significantly’ to where it was 2 years ago


 Nashville Mayor John Cooper (FOX 17 News)<p>{/p}

Downtown Nashville skyline photo (FOX 17 News)
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Nashville Mayor John Cooper announced Friday that property tax will be “cut back significantly” – roughly in line to where it was two years ago.

Nashville’s 34% property tax increase in 2020 was a source of debate and led to a petition calling for a vote on the tax hike by citizens.

So how can the property tax be reverted to roughly the same rate from before the tax hike?

Mayor Cooper joined FOX 17 News to explain:

“The assessment letters are going to show a dramatic increase in values and so it’s only fair for people to understand that that’s going to allow us to push the tax rate way back.”

He cited growth and stewardship for the reasons Nashville will be able to go back to its old tax rate.

“In the meantime, we were able to solve insolvency. We were able to pay our policeman and our teachers,” Cooper said. “We got through the year 2020, which is so much crises, with a stable city that was able to finance itself.”

Meanwhile, Mark Cunningham, spokesman and vice president of communication and strategy for Beacon Center of Tennessee, said it’s something that was going to happen anyway.

“Its an enormous PR blunder,” Cunningham said. “This is something that had to happen anyway. He didn’t cut any taxes and for him to take credit, he actually said he’d reversed the 34% tax increase. I don’t know where his head was but it was intentionally misleading.”

Tax Year 2020 – Property Tax Bill Analysis by Cook County Treasurer Maria Pappas

Tax Year 2020 – Property Tax Bill Analysis

The Cook County Treasurer’s Office conducted an analysis of nearly 1.8 million property tax bills based on the second and final round of billing for this year.

The total amount billed countywide for 2020 — to be collected this year — is more than $16.1 billion. That’s an annual increase of $534 million, or more than 3.4%.

The office’s analysis, the first of its kind under Treasurer Maria Pappas, found that the bigger tax burden is not being shared equally:

  • Commercial and industrial property owners overall face bigger tax bill increases than homeowners. The total billed to business properties was more than $7 billion, an increase of $410 million, or 6.2%. The amount billed to homeowners is $8.9 billion, an increase of $114 million, or 1.3%.
  • But homeowners in several suburbs — where local elected leaders increased the overall amount taxed — are being billed far more than last year. In Bellwood, the median residential tax bill is $1,868 higher than last year, representing a 45% increase. In Maywood, the median residential tax bill is $1,543, which is 32% higher than last year.
  • Property owners in many south suburbs continue to pay far more in taxes than landowners in other parts of the county, and in some of those towns, taxes went up again this year. The owner of a property in several of those south suburban communities will pay three to five times as much in annual taxes as the owner of an equally valued property in Chicago.In what has become an all-too-familiar story, majority Black and Latino communities are being hardest hit with property tax increases. That’s true for both homeowners and businesses in those areas.Majority Black and Latino communities make up six of the top 10 areas with the largest tax increases for homeowners and seven of the top 10 increases for commercial properties.

    For instance, the total amount of taxes billed to homeowners climbed 20.1% in south suburban Robbins, 13.8% in west suburban Cicero and 12% in west suburban Stone Park. Commercial taxes climbed 23.1% in Posen, 21.9% in Park Forest and 21.8% in Flossmoor, all south suburbs.

    South suburban Ford Heights, one of the nation’s poorest communities, has the unfortunate distinction of being both in the top 10 for the highest increase in residential property taxes, with an 18.1% increase, and in commercial property taxes, with a 42% increase.

    Ford Heights and several south suburban communities continue to face some of the highest tax rates in the nation — a persistent problem that contributes to businesses and residents leaving the

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economically struggling, mostly minority region that often places outsized burdens on the remaining homeowners. The high tax burden also makes it very difficult to attract new businesses.

In Chicago, the median residential tax bill held steady, declining by $1.63. As a result, roughly half of city homeowners are getting lower bills, while the rest will see increases.

But those numbers differed widely from ward to ward. In several South Side, downtown, Near North Side and Near West Side wards, there were far more residential tax increases than reductions. More than 13,500 homeowners across the city face increases of $1,000 or more.

The median residential tax bill in more than 50 suburbs — a little less than a third of the municipalities in the county — also declined. A median tax bill is the one at the midpoint of a group, meaning there are an equal number of bills that are higher and an equal number of bills that are lower.

Residential to Commercial Shift

Across Cook County, the overall tax burden continues to shift, with commercial and industrial property owners generally seeing far bigger increases in their bills than homeowners due to changes in how properties are valued for tax purposes.

Those property valuations, conducted by the Cook County Assessor’s Office, determine what portion of the overall tax burden is paid by each individual property owner. The Assessor’s Office last year reassessed all properties in the suburbs south of North Avenue. It also adjusted the values of many properties in the rest of the county, citing the economic effects of the COVID-19 pandemic on property values.

The COVID adjustments reduced the value of all residential properties in the city and north and northwest suburbs by about 10%. That was before it became clear that single-family home values would rise during the pandemic. Not all commercial properties were given COVID reductions.

The upshot: In the south and southwest suburbs, the total value of commercial property increased more than the total value of residential properties; in the rest of the county, the total value of residential properties decreased more than those of commercial properties. In each case, that results in commercial property owners picking up a bigger portion of the overall tax burden.

How are Property Taxes Determined?

▪ School districts, municipalities, park districts and other local governments set the levy, or the overall amount of taxes to be collected to pay for their operations.

▪ The assessor estimates the value of properties, and sets homeowner exemptions, which are then used to determine what portion of the overall tax bill each property owner pays.

▪ The clerk determines the tax rates, based on the levies and overall assessed value in each local government. The assessed value, multiplied by the rate, needs to equal the total levy.

▪ The treasurer sends out the bills, collects the money and distributes it to the local governments that set the levies in the first place.

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As a result, the 2020 tax bills show that owners of commercial and industrial properties will pick up slightly more of the overall property tax burden in Cook County than they did last year — a shift that will result in a minimal tax increase or even a tax reduction for many homeowners.

Specifically, 1.5% of the tax burden in the south and southwest suburbs was transferred from residential to business properties, compared with a 1.1% shift from residential to commercial in the north and northwest suburbs and a 1.3% shift from residential to commercial in the City of Chicago.

The general trends don’t mean all businesses were hit with bigger bills or all homeowners got a reduction or held steady. That’s because other factors besides assessments can affect the amount of the final tax bill.

In some communities, the shift in tax burden was not as pronounced because of the types of the businesses in the area. Some properties might have been improved, or become vacant, causing significant swings in individual assessments.

$14,000 $12,000 $10,000

$8,000 $6,000 $4,000 $2,000

Median Property Taxes – Countywide (Tax Year 2001 – Tax Year 2020)

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$0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Tax Year

Commercial Residential

page3image3902553152 page3image3902553344 page3image3902553952 page3image3902554576 page3image3902554928

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South and Southwest Suburbs

In many south suburbs, officials for years have expressed concern about maintaining vibrant business communities — or any businesses at all — given the ability of businesses to move across the border to Indiana or Will County, where businesses are taxed at lower rates.

The 18 highest Cook County tax rates, which are multiplied by a property’s assessed value to determine how much a property owner pays, are in the south suburbs. Park Forest tops the list, with tax rates almost five times as high as Chicago’s, followed by Phoenix, Riverdale, Harvey, Markham, Ford Heights, Calumet City, Country Club Hills and Hazel Crest — all with tax rates three or more times higher than Chicago’s.

page4image3902653040

Average Tax Rate

7.136%

17.663%

17.340%

22.251%

21.527%

21.234%

20.975%

20.891%

20.483%

19.008%

18.946%

18.497%

18.183%

25.227%

24.677%

23.947%

28.121%

26.814%

34.890%

PARK FOREST PHOENIX RIVERDALE HARVEY MARKHAM FORD HEIGHTS CALUMET CITY COUNTRY CLUB HILLS HAZEL CREST DOLTON BURNHAM CHICAGO HEIGHTS EAST HAZEL CREST CALUMET PARK UNIVERSITY PARK THORNTON LANSING SOUTH HOLLAND CHICAGO

0.0% 5.0%

10.0% 15.0%

20.0% 25.0%

30.0% 35.0%

40.0%

That means a homeowner in Park Forest, where the rate increased this year, would pay about five times as much in property taxes as the owner of an equally valued home in Chicago. Homeowners in the other suburbs in the top five for tax rates would pay at least three times as much as a Chicago counterpart, even though all of their rates declined slightly this year as assessed values in those communities were increased.

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That disparity is especially hard for businesses to withstand. The owner of a business property pays at least two-and-a-half times as much as the owner of an equally valued residential property.

Businesses face higher taxes in Cook County because commercial and industrial properties are valued for tax purposes at 25% of full market value. Homes are valued at 10% and their owners typically receive exemptions — tax reductions designed to ease the burden on homeowners. In the rest of the state, homes and businesses are assessed at the same rate of 33.3%.

Every time high taxes cause a business to decide to move or call it quits, the resulting loss in tax collections shifts to remaining property owners, residential and business alike. That has contributed to outsized tax rates in many Cook County communities.

This year, some of that oversized burden is being transferred from homeowners to business property owners because of the new assessments.

Residences this year accounted for 68.9% of the total amount of assessed value in the south and southwest suburbs, compared with 70.4% a year earlier. Conversely, the share of the tax burden borne by business land owners rose to 31% from 29.6%.

In total, homeowners in the south and southwest suburbs are being billed 2.9% more this year than last year, while commercial and industrial landowners are being billed 7.2% more.

The median 2020 residential tax bill in the region is $4,297, an increase of $305, or 6.6%. The median commercial bill is $14,834, an increase of $894, or 6.4%. But those figures vary greatly from one school district to another or one municipality to another.

In Bloom and Rich townships, which both border Will County, residential property values declined while commercial values increased.

In Bloom Township, which includes all or parts of Ford Heights, Chicago Heights, Sauk Village, South Chicago Heights, Park Forest and Glenwood, the median business property tax rose by $1,459 to $12,563. The median residential tax bill declined by $117 to $3,321.

In Rich Township, which includes all or portions of Matteson, Olympia Fields, Flossmoor and Richton Park, the median business property tax bill rose by $3,895 to $33,075. The median residential tax bill declined by $114 to $5,518.

The shift, however, does not mean all homeowners get a break and all business owners get hit harder. While more than 201,000, or 46%, of the homeowners in the region will get a tax reduction this year, nearly 224,000, or 51%, will see an increase and the rest will see no change or are newly constructed homes being taxed for the first time. About one third of 32,356 business properties will see a reduction in their bill, while about two thirds will face increases.

Property owners in many western suburbs in this region where tax levies rose will see significant increases. Eleven out of the 12 suburbs where homeowners will see the biggest increases in the median tax bill are in those suburbs listed in the table on the next page.

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Median Residential Tax Bills

Municipality

page6image3840643600

Tax Year 2020

page6image3840468240 page6image3840587344

Tax Year 2019

Increase

page6image3840386576 page6image3840553072

Bellwood

page6image3840553840

$6,032.80

page6image3840599296

$4,164.40

page6image3840592160

$1,868

Maywood

$6,330.71

$4,787.54

$1,543

Berkeley

page6image3840560048 page6image3840560608

$6,102.87

page6image3840491120

$4,670.53

page6image3840492432

$1,432

page6image3840527376

Stone Park

$5,628.84

$4,221.12

$1,408

Hillside

$5,531.64

$4,167.97

$1,364

Riverside

$10,899.32

$9,677.91

$1,221

Cicero

$5,400.44

$4,304.34

$1,096

Broadview

page6image3840413328 page6image3840413888

$4,735.48

page6image3840576944

$3,695.92

page6image3840508304

$1,040

page6image3840398416

North Riverside

$5,275.29

$4,404.01

$871

Berwyn

$6,383.40

$5,548.64

$835

Stickney

$4,953.92

$4,192.05

$762

North and Northwest Suburbs

Last year, all Cook County suburbs north of North Avenue underwent their regularly scheduled reassessments, and 2.3% of the property tax burden was shifted from residential to business properties.

This year, the areas was not reassessed. But with the COVID adjustments, more than 1.1% of the burden was shifted from residential to business properties. Residential property owners will pay about 63.9% of the overall tax burden in the north and northwest suburbs, down from 65.1% a year earlier. The tax burden on businesses grew to 36% this year from 34.9% last year.

Overall, homeowners are being billed 0.3% more than they were last year, while businesses are being billed 5.2% more. The median residential tax bill this year is $6,015, a decrease of $26, or 0.4%. The median commercial tax bill is $27,651, an increase of $2,026 or 7.9%.

Although the median tax bills on homes in the North Triad are generally going down by small amounts, Northfield Township — where the amount of taxes authorized by local leaders went up — the median residential tax bill is $9,266, an increase of $458.

In the north and northwest suburbs, 81% of 21,979 business property owners will receive higher bills than they did last year. Meanwhile, 51% of more than 195,000 homeowners will receive higher bills.

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Chicago

The Assessor’s Office is reassessing the city of Chicago this year, which will affect next year’s tax bills. Nevertheless, the COVID adjustments resulted in a shift of the burden from residential to commercial.

About 1.3% of the tax burden shifted this year from residential to commercial. Business properties accounted for 47.6% of assessed value, up from 46.2%. Residential properties accounted for 52.5% of all assessed value, down from 53.8%. Overall, commercial and industrial landowners are being billed 6.3% more this year while homeowners are being billed 1% more.

The median residential tax bill in Chicago is $3,341, down by $1.63, or .05%. The median commercial tax bill is $9,659, an increase of $761, or 8.6%.

This year, more than 343,000 homeowners, or 48%, get a tax reduction, while more than 358,000, or 50%, get a tax increase; the rest did not see a change or live in newly constructed homes being taxed for the first time. Less than 9,000, or 14%, of business property owners get a tax decrease, while more than 58,000, or 84%, are being billed more than they were last year.

Whether there were tax reductions or increases varies significantly from ward to ward. Attached is a chart to show those statistics.

Note: This analysis excludes vacant lots, not-for-profit owned properties, houses of worship, co- ops and buildings that have both business and residential uses that are not separately billed, all of which represent about $154 million of total taxes billed.

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Businesses Hit Particularly Hard

Businesses hit hardest by latest tax bills, county report says

An analysis by Cook County Treasurer Maria Pappas’ staff finds the tax load shifting to commercial property, but higher levies and assessments are whacking some homeowners.

Residential neighborhood in Maywood located at Quincy Street and 10th Avenue. Maywood is one community that’s being hit the hardest by recent property tax bills, a report by by Cook County Treasurer Maria Pappas’ office shows.
Residential neighborhood in Maywood located at Quincy Street and 10th Avenue. Maywood is one community that’s being hit the hardest by recent property tax bills, a report by by Cook County Treasurer Maria Pappas’ office shows.
Tyler LaRiviere/Sun-Times

Tax bills soon to land for Cook County property owners will take a larger bite from businesses countywide and from many Blacks and Latinos in the suburbs, a new analysis shows.

The report from Cook County Treasurer Maria Pappas’ office concludes that commercial and industrial property throughout Cook County will account for total billings of $7 billion this year, up 6.2% from 2020. Homeowners, meanwhile, are paying an aggregate 1.3% more, or $8.9 billion, it said.

But residences in many suburbs are paying much higher bills, often because of two factors: Their property was reassessed for tax purposes, and their local governments increased their tax levies, the amount demanded from business owners and residents.

For example, the median residential tax bill in Bellwood is up 45%, or $1,868, compared with a year ago, the analysis found. Sharp increases also showed up in other western suburbs, such as Maywood and in some municipalities south of Chicago.

The findings are based on taxes that were levied in 2020 and, under the county’s system, are first showing up in bills issued this year. Pappas said the second installment of bills due in 2021 will be mailed later this month and can be viewed and paid online at cookcountytreasurer.com. The website also has a link to the office’s research.

Pappas said inequities in the property tax system persist, especially in the south suburbs. “The 2020 property tax increases are exacerbating financial stresses in these communities, thwarting economic progress and generational wealth-building,” she said.

While her office issues the bills and collects the payment, it does not determine what property owners pay. That’s a function of how much local governments levy in taxes, while the Cook County assessor apportions that load by placing valuations on each parcel.

“This isn’t an attack on the assessor,” Pappas said. “We need to fix this system. The facts here speak for themselves. Nobody understands that the greater the levy, the greater the taxes are going to be. So I say to all those governments that want to pass bond issues — if you do that, the taxes are going to go up.”

She said population loss and business closures have worsened the situation in the south suburbs, leaving a smaller base to shoulder the tax burden. Business leaders in the region have long complained that the county’s policy of assessing business property at higher rates than homes puts them at a disadvantage. Employers can build in adjoining counties that offer lower taxes.

The analysis by the treasurer’s staff — its first statistical look at upcoming tax bills — picks up the county’s reassessment last year of suburbs south of North Avenue. This year, Chicago is being reassessed and the effect will show up in bills next year. The north suburbs’ turn comes in 2022.

In Chicago, this year’s tax bills are little changed for most homeowners, the review found, while the median commercial tax bill was up 8.6%, to $9,659.

The report said majority Black and Latino communities make up six of the top 10 areas with the largest tax increases for homeowners and seven of the top 10 for commercial properties.

Suburbs seeing double-digit percentage increases in homeowners’ bills include Robbins, Cicero and Stone Park. Commercial taxes rose more than 20% in Posen, Park Forest and Flossmoor.

Ford Heights, among the poorest suburbs in the country, showed up with large increases in bills for both homes, an 18% median increase, and commercial property, at 42%.

Eighteen south suburbs account for the highest average tax rates in the county and are several times higher than the rate in Chicago. The rate is multiplied by a property’s assessed value to arrive at the tax bill.

The difference means that in Park Forest, a homeowner would pay about five times the taxes as the owner of a house in Chicago that’s equally valued, the report said.

The analysis “really puts numbers and data around a lot of things we’re concerned about,” said Brad Tietz, vice president of governmental relations for the Chicagoland Chamber of Commerce and one of several civic leaders to be briefed by Pappas’ team Monday. He said the ongoing reassessment of Chicago properties will continue to shift the tax load to businesses.

“The cost of government has outpaced what taxpayers can afford,” Tietz said. Pointing to the south suburbs, he said, “The less commercial property you have to tax, the higher the rates will go on residential property.”

Cook County suburbs with largest hikes in median residential bills

Municipality Tax Year 2020 Tax Year 2019 Increase
Bellwood $6,032.80 $4,164.40 $1,868.40
Berkeley $6,102.87 $4,670.53 $1,432.34
Berwyn $6,383.40 $5,548.64 $834.76
Broadview $4,735.48 $3,695.92 $1,039.56
Cicero $5,400.44 $4,304.34 $1,096.10
Hillside $5,531.64 $4,167.97 $1,363.67
Maywood $6,330.71 $4,787.54 $1,543.17
North Riverside $5,275.29 $4,404.01 $871.28
Riverside $10,899.32 $9,677.91 $1,221.41
Stickney $4,953.92 $4,192.05 $761.87
Stone Park $5,628.84 $4,221.12 $1,407.72

Table by Andy Boyle, Chicago Sun-Times Source: Cook County treasurer | Note: Tax year 2020 is billed in 2021.

Don’t see the above graphic? Click here.

City of Chicago is $733 Million Short

Chicago faces a “significantly reduced,” but still sizable, $733 million budget shortfall in 2022 because of the “lasting and continuing impacts” of the coronavirus pandemic, Mayor Lori Lightfoot disclosed Wednesday.

“While we still have hard work ahead of us in order to close this gap, this figure is a great indication that our city is fiscally bouncing back from this crisis,” Lightfoot said in a news release.

“Last year, we were faced with a $1.2 billion pandemic budget. This year, we have shifted to a recovery budget that not only reflects the challenges … but the number of resources we’ve brought to bear to address them.”

The shortfall will be eliminated by refinancing outstanding debt at reduced interest rates, using the $1.9 billion avalanche of federal stimulus funds on its way to Chicago and “as always, looking to create governmental efficiencies,” the news release states.

Already, the city has used $800 million in federal stimulus funds to support hard-hit small businesses and provide a safety net of assistance for housing, food, homeless services and mental health and cover the salaries of police officers, firefighters and other first responders.

Indiana Revenue Shortfalls

In 2010, the General Assembly, inspired by Governor Daniels, offered voters an amendment to the State Constitution that capped property taxes as a percent of gross assessed value.

Hoosiers rose to the bait. Of the 1.56 million who voted, 72% approved the measure. They believed lower property taxes were a good idea. They didn’t think through the consequences of lower local property taxes and the shift of power they granted to the General Assembly.

The property tax starts with a local assessment of value. If you think the assessment is wrong, you can discuss the matter with your county or township assessor. Or you can appeal the assessment though a local board and even arouse your neighbors to protest inappropriate assessments.

If your property taxes are included with your mortgage, you might be totally ignorant of your property taxes; the mortgage company pays those taxes in May and November.

People who get a large part of their income from use of their property, don’t like property taxes. Farmers, property developers, landlords, and businesses with expensive equipment traditionally seek every possible way to lower their property taxes. They join the railroads and utilities in seeking state protection from local property taxes.

Homeowners, renters and businesses are dependent on local governments for schools, libraries, parks and public safety services (sanitation, health, police and fire). Some voters, however, don’t see themselves as significant users of local public services. As a result, they can be convinced property taxes are too high and supporting a property tax cap amendment to the state Constitution will benefit everyone.

This past week several reports have come out proclaiming the health of Indiana’s finances, our massive state surplus, and the refund of the excess to be paid out to taxpayers. How much of this bonanza resulted from the state failing to use federal Covid aid as intended?

The state has replaced some of the shortfall in local revenues caused by the property tax caps. For schools alone, according to the Legislative Services Agency, that shortfall amounted to $307 million in 2020. This was only part of the one-billion-dollar losses for all local governments from the tax caps that year.

We are told there’s too little money for the protection of children, for public safety, for the security of the elderly and infirm, for rehabilitation of the addicted, even for local potholes. The everyday maintenance of public buildings, street and traffic signs and lights, along with other services are taken for granted.

The neglect of our cities, towns and counties is accepted by Hoosiers who can’t believe we’re more comparable to the poorer Southern states than to our Great Lake neighbors.

Affordable Housing Grants, Financing and Tax Incentives

Pritzker Signs Bills Expanding Affordable Housing Funding, Incentives

In this file photo, houses sit behind metal fencing on a tree-lined street in Chicago. (WTTW News)In this file photo, houses sit behind metal fencing on a tree-lined street in Chicago. (WTTW News)

Gov. J.B. Pritzker signed legislation Thursday that creates new resources and incentives to finance affordable housing across the state and helps low-income residents access assistance for heat and other utilities.

“These two new laws mark another step forward by state government on our collective mission to ensure all our residents have the basic foundation upon which to build a successful future for themselves and their families,” Pritzker said at a bill signing ceremony.

House Bill 2621 directs the Illinois Housing Development Authority to create a COVID-19 Affordable Housing Grant program to support the construction and rehabilitation of affordable rental housing in communities that have been disproportionately impacted by the pandemic. The program will direct $75 million in federal funds from the American Rescue Plan to multifamily development costs in an effort to help keep rent affordable for low-income households. Officials expect it will fund the development and preservation of up to 3,500 affordable rental homes and apartments by the end of 2024.

“Even before the COVID-19 pandemic, Illinois was already facing a shortage of safe, affordable housing for extremely low-income households — those earning well below the area median income or about $28,000 annually for a four-person household in Cook County,” said IHDA Deputy Executive Director Karen Davis. “House Bill 2621 is a tremendous step forward in helping IHDA continue its mission to provide affordable housing for Illinois residents.”

The bill, which is effective immediately, also extends the Illinois Affordable Housing Tax Credit through 2026 to encourage monetary or real estate donations to affordable housing developments. That program provides a one-time state income tax credit equal to 50% of the value of qualified donations to affordable housing developments, according to officials. Since the program’s inception in 2001, it has led to the creation or preservation of 21,000 affordable rental units statewide, according to Davis.

The bill also creates two separate property tax incentives to support the preservation of affordable housing, including a provision that encourages owners of multifamily buildings with seven or more units to invest in their properties and keep rents affordable by providing reductions in post-improvement assessed value, according to the governor’s office.

“What’s so great about this omnibus legislation is it’s really comprehensive and offers incentives and resources in all types of markets and communities in Illinois,” said Bob Palmer, policy director of Housing Action Illinois, an advocacy group that works to protect and expand affordable housing throughout the state. “For example, if there’s an owner of a small apartment building here in Englewood who’s trying to figure out how to put a new roof on their home or improve their heating or cooling system and keep the rents affordable, provisions in the bill are going to help them get the financing they need to make improvements to the building and keep the rents affordable,” he said.

The legislation also strengthens existing state law requiring communities with limited stock of affordable housing to create plans to address their local housing needs, according to officials.

“There’s no excuse in 2021 for people in the state of Illinois to be living under viaducts, to be living out of their cars, to be living out of their duffle bag,” said state Rep. Will Guzzardi, who called the legislation “an incredibly important step toward making sure everyone in Illinois can be housed.”

Last year, the state temporarily expanded eligibility to the state’s Low-Income Heating and Energy Assistance Program amid the pandemic, which resulted in 289,000 families receiving $343 million in utility assistance, according to Pritzker.

“Having a roof over your head is only one component of shelter. It’s also having heat on a frigid night in the winter or cooling your home in a dangerously hot summer day,” Pritzker said.

The governor also signed Senate Bill 0265, which is effective Jan. 1 and permanently increases access to the Low-Income Heating and Energy Assistance Program for families with young children and expands access to undocumented residents.

Contact Kristen Thometz: @kristenthometz (773) 509-5452  kthometz@wttw.com

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