Thousands of homeowners in north and northwest Cook County facing property tax sticker shock this fall

North and northwest suburban retailers, office owners and apartment landlords were apoplectic in 2019 when Cook County Assessor Fritz Kaegi raised property assessments on commercial properties as one of his first acts after taking office.

Though the effect was blunted through thousands of appeals to the Cook County Board of Review, many homeowners felt relief as their commercial neighbors caught the worst of the following year’s tax hikes.

Four years later, taxpayers can expect the opposite impact.

Residential valuations in five north and northwest suburban townships are 15% higher for the 2022 tax year than in 2019, the last time north Cook County was reassessed, according to new data from the Board of Review. At the same time, combined commercial and industrial valuations edged downward by 1%.

Assessments aren’t a direct stand-in for property tax bills, and there can be a wide variation in results for individual properties. But the numbers from Schaumburg, Hanover, Barrington, New Trier and Norwood Park townships — the first newly reassessed townships whose appeal results have been finalized by the Board of Review — make clear that homeowners are in for higher taxes while many commercial landlords are set to take less of a hit.

Because of the county’s delayed tax cycle, the impact of the new assessments from the 2022 tax year will show up on this year’s property tax bills. Second-installment bills due later this year will reflect the new assessments.

The latest appeal results are a trial run for the newly constituted Board of Review after two of its three commissioners were ousted in last year’s elections. Homeowners and landlords who feel they’ve been shortchanged by the assessor can appeal to the Board of Review, arguing that their property’s taxable value should be lowered. If they still aren’t satisfied, they can go to the Illinois Property Tax Appeal Board or sue.

Many real estate and business leaders who were at odds with Kaegi over his commercial assessment hikes feared that the election of Board of Review Commissioner Samantha Steele, a former Kaegi deputy, would tip the appeals body toward his vision and erode the board’s role as a lifeline for landlords.

According to the latest data, people appealing to the Board of Review got significantly less relief than they did three years ago, when Kaegi last reassessed Cook County’s north suburbs.

Almost the same number of property owners from the five north suburban townships appealed to the board this cycle as during the 2019 tax year. But only about one-third of homeowners and 61% of non-residential property owners who appealed this time were granted reductions, down from 48% and 73% last time.

The Board of Review’s apparent stinginess might be explained by an important wrinkle: Overall, Kaegi valued commercial properties lower than in 2019, giving the Board of Review a lower baseline to start from.

Some examples:

• Kaegi assessed the Macy’s at Woodfield Mall in Schaumburg at about $4.1 million last year, down from $7.1 million in 2019.
• His office pegged the assessed value of a Red Lobster in Norridge at $336,000 in 2022, just over half of the value he put on it the previous cycle.
• And a law office on Devon Avenue in Park Ridge was assessed at under $50,000 last year, three years after Kaegi’s team valued it at about $110,000.

“Three years ago, the assessor came out aggressively in assessing commercial properties quite high — some people were seeing their assessments double or triple,” says Michael Elliott, a Chicago property tax attorney. “Increases now remain high for many people, but they don’t appear to be as extraordinarily off target as it was then … Maybe they figured, ‘We hit them hard last time, we can’t do it again.’ ”

ASSESSMENT CHANGES IN 5 TOWNSHIPS

Illinois Answers Project

Kaegi says his softer touch with commercial landlords in 2022 wasn’t a sign of his office’s inaccuracy in 2019. He says it shows the opposite.

“In 2019, we were correcting for significant underassessment of non-res[idential] properties in the previous administration,” Kaegi’s chief of staff Scott Smith says. “Because we assessed more accurately in the initial reassessment, those properties were more in line with the market than previous years.”

Smith points to an independent market analysis showing evidence that Kaegi’s 2019 assessments were in line with the real estate market at the time.

Steele lauds the outcome, noting that fewer commercial property owners from the north suburbs filed appeals in the past year than in 2019.

Landlords’ gain is homeowners’ loss

Because assessments determine the zero-sum distribution of property taxes, every tax break for a commercial property owner can translate to a little more heartburn for everyone else — including homeowners.

Kaegi has expressed frustration with the Board of Review for undoing many of his commercial assessment hikes, shifting much of the tax burden onto single-family homeowners and landlords of small apartment buildings.

The board took the same approach in 2022. Kaegi’s calculations would see homeowners in the five completed north suburban townships paying about 71% of their overall property tax burden. The Board of Review left residential homeowners in those townships on the hook for nearly 75%.

New Trier Township, which includes Glencoe and Winnetka, saw its combined post-Board of Review residential assessments go up by nearly 18%, while its non-residential assessments barely changed. Hanover Township, which includes Streamwood and parts of Bartlett and Elgin, saw an even bigger rise in residential values, while combined non-residential assessments ticked down.

North suburban homeowners could be in for an even bigger shock as this year’s bills correct for Kaegi’s “COVID adjustment,” the 10% assessment haircut he gave residential properties countywide on the assumption that the pandemic would tank the housing market. His 2022 assessments account for the opposite effect, tracing rising trends in home sale prices since 2020.

Early data from Kaegi’s 2023 reassessment of Cook County’s west and south suburbs indicate that many homeowners there are in for hefty tax hikes when their bills come due next year.