* Hal Dardick at the Tribune…
As he took over a system riddled with errors and inequity, Assessor Fritz Kaegi vowed to change the way commercial properties are valued in Cook County.
Now his initial assessments are in, covering the north and northwest suburbs, and they show valuations for commercial, industrial and larger apartment properties increased by more than 74%, compared with less than 16% for homes, a Tribune analysis found.
The result may be a significant shift in how the property tax burden is divided up — with homeowners paying less and business owners paying more. A Tribune analysis shows that if Kaegi’s initial property values stand, businesses would pick up 44% of the combined taxes in those suburbs next year, up from 34% this year. That would shift 10 percent of the property tax burden from homeowners to businesses.
Those new, higher assessments on commercial properties triggered a backlash from the business community. They’re not only concerned about paying more, but they also say the uncertainty his assessments has caused is contributing to a slowdown in commercial property sales throughout the county.
Still, there are multiple opportunities to appeal the assessments, so those numbers could change and dampen the effects of the property tax shift to businesses. […]
Kaegi points to a recent nationwide survey of known cap rates by the CBRE real estate services firm. It shows that Kaegi’s rates are in line with those that businesses and real estate brokers used when evaluating and making purchases.
Mayor Lori Lightfoot joined forces with Fritz Kaegi on Wednesday and flatly denied that the assessor’s efforts to fix Cook County’s “broken” property tax assessment system would scare off the development needed to reverse Chicago’s population losses.
“Nobody is trying to shock the system. Nobody is looking to scare away investment from Chicago. We all want to see our residential, commercial and industrial real estate markets thrive. Our success as a city is inextricably tied to the growth and growth needs development to be real. That’s unimpeachable,” Lightfoot said.
Addressing, movers and shakers at the Cook County Assessor’s Market Analyst Day in the South Loop, Lightfoot said she recognizes that “change isn’t easy.” But she argued that “change has to come” because property owners and investors “deserve to know if they’re being treated fairly and uniformly.”
“There needs to be a focus on predictability and stability….I know that predictability is important. But predictability cannot be about enshrining the status-quo,” she said.
* Wondering where your property taxes are headed? Kaegi has a tool for you
* Cook County Assessor’s Property Tax Rate Simulator Tool