Commissioners Hear about Impact of Assessor’s Change to Definition for Some Mixed-Use Buildings

Cook County Board Committee Meetings
July 22, 2024

Legislation and Intergovernmental Relations Committee

• Most of the meeting centered around the change made by Assessor Fritz Kaegi in the fall of 2023 to the definition of buildings under the 3-18 subcategory for buildings containing commercial and residential uses.  As a result of this change, some properties no longer qualified as a 3-18 and had a significant change in their assessed value and resulting tax bills because residential property is assessed at 10% of the value and commercial property is assessed at 25% of the value.  The change was made under the Assessor’s rule-making authority.
• Two main objections were raised by public speakers, in addition to the speakers providing specifics as to how they were adversely impacted: (1) the lack of public input prior to the change, and (2) the Assessor’s use of a rule change rather than coming to the Board for a change to the County ordinances.
• The Assessor started his presentation by saying that the Cook County property tax system is unnecessarily complex, even as compared to other counties in Illinois, in part due to the different assessment levels for commercial and residential properties.  However, on the plus side, the Assessor said that the much smaller level for residential properties can incentivize expanding and maintaining residential units.
• The Assessor and his staff explained that Assessors have long used their rulemaking authority to create sub-categories for properties under the main categories that are fairly broad under the County ordinance in order to be able to assess properties with common characteristics similarly.  The Assessor said that the change to the definition under the 3-18 subcategory was made to respond to an investigation by the Office of the Independent Inspector General in 2022 which found that some mixed-use properties were being assessed at the 10% level even though the majority of the space was used for commercial properties.  The Assessor said that the change in definition was to close this “loophole” and the Assessor used the rule-making authority to quickly make the change to have it in place in time for the start of the triennial reassessment of the South and West areas of the County.  
• Commissioners raised questions regarding (1) the Assessor’s decision to use rule-making authority (but did not appear to question that authority) as opposed to talking to the Commissioners about a possible ordinance change, (2) the failure of the Assessor to communicate the rulemaking changes to the Commissioners so they would know about this before they heard from constituents, (3) the use of the limit of 35% for the commercial area of the property under the new 3-18 definition, and (4) how much communication and outreach the Assessor had done when making the change.  The Commissioners pointed out that property owners would not necessarily have understood the impact of their change in classification until the 2nd installment bill arrived this July.  Also, the Commissioners said that there cannot be too much communication.
• Commissioner Morita (and possibly others) said she would work with the Assessor’s office to look closer at the new definition and whether an ordinance change was appropriate and said she expected that options could be presented to the Board in September.  

Workforce, Housing, & Community Development Committee

• The Committee recommended for full Board approval two proposals to use HOME investment Partnership Program funds for (1) an 80-unit affordable housing development in Franklin Park ($1.75 M), and (2) a 42-unit affordable senior housing development in Hillside ($2.5 M). (Item # 24-3370 and # 24-2891)
• There were a number of public commentators against the Hillside development objecting to (1) the use of this property which would be exempt from local property taxes, thereby eliminating the opportunity to have a taxable use of the property which could reduce the local school taxes on Hillside residents, (2) the fact that there are no public transportation options nearby, and (3) allegations of wrongdoing by the developer that had been raised at a prior meeting which caused this item to be deferred.
• Susan Campbell, the Director of the County’s Department of Planning and Development, said that they had investigated the previously-raised allegations and the Department was satisfied there was no evidence of any impropriety.  Commissioner Trevor pointed out that there are many sections of Suburban Cook County that lack public transportation and that should not be a bar to making investments in needed housing. 

Observer:  Priscilla Mims