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Commercial Property Owners Are Facing 2020 Assessment and Real Estate Tax Increases

Each year one-third of Cook County gets reassessed by the Assessor.  In 2020, the south and southwest suburban townships have been reassessed by Assessor Fritz Kaegi for the first time.  The Assessor has continued his trend to increase the assessments of commercial property owners much more aggressively than residential property owners for the 2020 triennial reassessment causing much consternation from commercial property owners subjected to unforeseen increases of the kind never before seen, nor projected.

Similar to the manner in which he set more substantial assessment increases for commercial properties in the north and northwestern townships of Cook County in 2019, the Assessor’s Office increased the assessments of all non-residential property in the south and southwestern suburbs of Cook County by 56% in 2020 to a total market value of $5.25 billion, while residential real estate only increased 8% to a total property value of $8.42 billion.  These assessment increases illustrate Kaegi’s attempt to redistribute or reallocate the real estate tax burden more substantially to commercial property owners and impose less of a burden on residential property owners.

According to the Assessor’s office as stated in a November 5, 2020 Crain’s Chicago Business article entitled, “Kaegi Jacks Up Assessments on South Suburban Landlords”, the new 2020 triennial valuations translate to non-residential properties accounting for 38% of the total assessed value in the south and southwest suburban townships of Cook County, which is up from 30% in 2019.  Residential property owners now make up 62% of the assessed value in these townships which is a decrease from 70% in 2019.  In addition, the Cook County Assessor has issued adjustments for the Covid-19 pandemic which has reduced the assessments of residential properties further, including in townships that are not part of the reassessment in 2020.  For example, for single-family home and condominiums in Berwyn Township, his office has lowered assessments by 9.6 percent to 11.3 percent.

Higher assessments do not necessarily translate into higher property tax bills as the Cook County Board of Review has a further appeal process beyond the Assessor’s Office appeal process, whereby it can review evidence of overvaluation on commercial property owners’ properties and reduce the substantial assessment increases created by the Cook County Assessor’s Office.  Plus, as is often the case historically, the local tax rates usually decline in triennial reassessment years.  In 2019, when the north and northwestern townships of Cook County were reassessed by Assessor Kaegi, commercial property owners saw, on average, 77 percent assessment increases while residential property owners saw, on average, 14 percent increases.  After the Cook County Board of Review completed its tax appeal process for commercial properties, the Assessor’s significant assessment increases were reduced on average to 25 percent, whereas residential assessment increases only averaged 11 percent.

After the 2019 tax rates issued, the Cook County Treasurer has stated that commercial and industrial tax bills in the northern suburbs rose 15.8% on average while the residential tax bills rose 1.1% on average.

No matter how you cut it, commercial property owners are facing increases in their assessments and real estate taxes due to the 2020 triennial assessment increases set by the Cook County Assessor, while the assessments set for residential property will be much less severe by comparison.