Despite adjustments for the COVID-19 pandemic, Cook County’s triennial reassessment of the south and southwest suburbs has pushed values much higher for business property owners. As a result, the current tax burden is shifting more heavily onto commercial and industrial properties.
The disparity is engrained in the County’s dual system of taxation. Business real estate is assessed for tax purposes at 25% of fair market value, while homes and apartment complexes are assessed at 10%. So, a business that has the exact same market value as a home automatically pays two-and-a-half times as much in property taxes.
With the reassessment, the median home value in the south/southwest suburbs rose about 4%. Meanwhile, business and industrial properties in the region saw a median increase of about 44%. Apartment buildings with seven or more units went up by a median of about 80%.
Further complicating this year’s assessments was the assessor’s decision to revise assessments based on the pandemic. Adjustments were based on economic conditions in April 2020, when data showed declining housing prices. Homeowners received assessment reductions ranging from about 8% to 12%, even though home sales later in the year showed prices rising significantly.
COVID adjustments were made for some hard-hit businesses like hotels, offices, stores and entertainment venues. Due to the complexity of the data generated, many businesses have had a tough time determining whether they actually got a COVID-19 reduction or not.
Scaring Off Investors
Officials fear that rising assessments could undo efforts to promote economic development in Cook County’s south and southwestern suburbs.
“Our concern is we’re going to have more stagnation in investment and potentially further divestment if businesses find it too onerous to come back within our communities, and that’s a downward spiral,” Kristi DeLaurentiis, executive director of the South Suburban Mayors and Managers Association told the Chicago Tribune.
What’s Ahead for Chicago?
Business groups are concerned not only with the reassessments in the suburbs, but also what the tax shifts will mean for the city of Chicago, which will be reassessed for the first time by the new assessor this year.
“What we’re concerned about is our investors are starting to look at Cook County and say, ‘Why should we do it there when we can go to DuPage County or Will County, where they don’t have those kinds of concerns? ... Or Indiana?” Michael Mulcrone, executive director of BOMA Suburban Chicago told the Tribune.
“We want reform, and we want better government, but is this system the best way? I don’t think so,” Mulcrone said. “I think there’s a big question about it.”