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By: Mark Glennon*

Property taxes will go up to pay for affordable housing if legislation now pending in the General Assembly passes. It’s not styled as a property tax increase, but that’s exactly what it is. It’s styled as property tax caps or reductions for affordable housing, which would directly result in increases for homeowners and everybody else.

Senate President John Cullerton

Two bills are pending. The first is Senate Bill 2259, sponsored by Senate President John Cullerton (D-Chicago). It would artificially limit increases in assessments of new or rehabilitated apartment complexes if the owner commits at least 20 percent of the building’s units to a rent cap for families that make less than a set income depending on the area. The second, House Bill 2168, goes further and would directly reduce assessments on similarly defined affordable apartments. It has nine House sponsors.

In other words, both bills would give a property tax break to owners of apartments for lower income renters. The problem is that the levy – the total amounts collected by each taxing authority – wouldn’t change. That means all other property owners pay the difference. The end result is simple and undeniable: Property owners would fund a special subsidy for affordable housing.

You’d think lawmakers had learned their lesson. In 2017, Chicago wanted a way to soften the blow of the city’s property tax increases, or at least make them look softer. Singling out the city wasn’t workable, so it got Springfield to pass increases in the homestead and senior exemptions for all of Cook County. We wrote about the dismal results for other taxpayers here, which the Chicago Tribune detailed. Other property owners got clobbered, especially in lower income areas.

As the Tribune reported on those results, “Many, many people are saying it’s not financially beneficial for them to pay the taxes they pay on their homes, when every 11 to 13 years, they’re paying the total costs of their home in taxes,” said Harvey Ald. Keith Price, economic development committee chairman. “I’ve talked to a couple of people that have personally told me that they are not paying their taxes anymore. They’re going to save their money, and within the two years they have (before they lose the house), they’ll just save all their money and leave.” It has only worsened since then.

If Illinois wants to pay for affordable housing it should be done smartly. The simplest and most efficient means to provide housing assistance is vouchers, not convoluted incentives like Springfield is moving towards. The pending bills would require a whole new level of bureaucracy for assessors and administrators to enforce.

The pending bills have other major flaws. Projects that would have been built anyway will still get the tax break. On them, the subsidy will have been wasted. And there’s no way to measure results. How will we know how many new projects, if any, get built thanks to the tax incentive? We won’t. That’s unknowable. For that same reason, we won’t know the full cost until after the fact.

Most importantly, property taxes are the last place to look to for funding. Illinois rates are already neck and neck with New Jersey’s for the highest in the nation. Hundreds of thousands of Illinois homeowners have had their equity erased or worse, been trapped with underwater mortgages. Suppressed values, primarily because of those taxes, have already cost Illinois homeowners a quarter trillion dollars just in the last ten years.

Raise property taxes for affordable housing. Only in Illinois.

Read more about the problem with property taxes in Illinois:

*Mark Glennon is founder of Wirepoints.

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Mike

So those of us that have worked hard for what we have will be forced to pay for those that already get too much stuff paid for by the rest of us. Can not get out of Illinois soon enough.

Willowglen

One of my tax professor’s fields of study was tax policy. He constantly questioned the efficacy of using the tax system to achieve social goals, as doing so changed economic behavior from what otherwise in many cases would have been in pursuit of a far more productive purpose than the tax altered behavior. (A political liberal then but likely too thoughtful and economic minded to be in that status today). The tax system is inefficient in terms of delivering real benefits, and running social programs through it means bloated governments because tax favors must he bought and sold one way… Read more »

I couldn’t even decide if this is a good news or what

Lucy

Property taxes ARE HIGH enough!
We are retired.
Stop !!!

Freddy

Do you think it would help that seniors 65 and over were exempt from school tax’s statewide? We do not need the school system. Even if the tax rate were increased to compensate it should be a plus for us. Many towns around Atlanta like Smyrna seniors do not pay school tax’s. Our homes here are just ATM machines for taxing bodies.

debtsor

Seniors below a certain income get the senior freeze exemptions which significantly reduce their tax bill. The freeze is pretty massive, up to 70 or 75% of the tax bill when combined with the homeowners exemption and senior exemption.

Joe

A quick look shows that a 3br house can be rented in Illinois for $695/mo.

Illinois is tearing down and letting fall down more houses every year than it is building as people flee the failing state.

none

It’s time for people to get together and stop paying this like they did years ago in CA. When they stop screwing us and raising our taxes more we’ll start paying it again..

DantheMan

I’m surprised this short article is generating so many comments. Hopefully, more Illinois residents are finding Wirepoints for the first time and beginning to understand this state offers no future but financial disaster. I recently left Illinois for good. I’m temporarily living overseas and doing extensive research on where I should live in the U.S. when I return. Everyone in Illinois should start doing their own research. The real estate and income taxes in some states may inspire you to get out of Illinois asap. Also, wouldn’t it be nice to live in a state that is more in line… Read more »

Joe

As long as you vote red, come to Texas. North Texas is great.

Sandy Dahm

If this passes, more people will leave Illinois. I guess our elected officials do not care about the average citizen whom already pay very high property taxes, other taxes to pay for high pensions, state run programs, etc. So those already paying extremely high property taxes are now expected to pay more for those who want more things handed to them. Is the Governor included, even with him trying to have his mansion taxes lowered because he “cant live in it”. The way the governor and people in office (most I did not vote for) it makes me and a… Read more »

Dennis Heil

Democrats make me sick especially the fat rat bastard Prick-ster wanting to raise property taxes which they are getting harder to pay anyway. What about all the dope money the state will be making our government needs to check out how Colorado does it they reduced property taxes. But the cheating bastards that run Illinois would not understand. I will be removing my toilet in order to get my property taxes down. Oh by the way fat-cat thanks for showing us how to cheat the system.

MikeH

It would never work anyway. Thanks to the wonderful pension trainwreck this state has, no amount of weed/property/plastic bag/insert other tax here is going to dig us out of the hole. Short of bankruptcy or revolution, Illinois is doomed.

tizzle

The guy in the picture is a real estate attorney and sent all of his kids to private school in Chicago. Keep listening to Dems telling you that you are racist.

SHEILA HURLEY

I CAN’T KEEP LIVING HERE I’M A SENIOR GOT TO SELL AND GET OUT MAKES ME SAD I LIVE ON SS I DON’T HAVE THE MONEY

Kathleen Risley

Sure, just tax the hardworking people of Illinois to death so we can become poorer….this is why more and more people are getting the hell out of this state. Three more years and we are out of here too. All of our money goes to the government, we have nothing left to have a life on.

debtsor

Because Democrats hate you and people like you. They really do hate you. This needs to sink in with people because it’s not repeated often enough. Democrats hate you.

They call you deplorable, crazy, racist, etc. They are actively encouraging you to leave the state. They have no desire to grow the state or attract new business. All they want is Democrat votes.

DOUG

And the voters of Illinois want this to happen since they keep voting for the same corrupt criminal politicians.

debtsor

Yeah just read the twitter comments on any post about the Jihad Squad. It’s all “GOP is racist, never vote for them, put them in camps” type stuff. No substance, just “they’re racists, can’t vote for them”. That pretty much describes the group think of the northeast corner of this state. So the Dems have carte blanche to do whatever they want. When is the last time a democrat was voted out of office in this area? Todd Stroger maybe? People go to the polls, and check the same boxes, every time, and then complain about their legislators.

DantheMan

Kathleen, if at all possible, reduce that 3 year timeline, especially if you own a home. The longer you wait, the riskier it gets. When you see everyone around you starting to leave, it may be too late.

Jackie Hayden

TIME FOR THIS PARTY TO GO…

Loleta Didrickson

Please vote no Springfield. This isn’t a state issue but a local community one. Unfortunately, again you’re loosing sight of jurisdictional authority. Tell us you understand PLEASE!

Maryanne

“As the Tribune reported on those results, “Many, many people are saying it’s not financially beneficial for them to pay the taxes they pay on their homes, when every 11 to 13 years, they’re paying the total costs of their home in taxes,” said Harvey Ald. Keith Price, economic development committee chairman.”

I dispute this claim. My combined property tax bill for 11 (or 13) years doesn’t add up to my home’s value. Am I misunderstanding?

Freddy

Here in Rockford it takes 23 years in tax’s to = purchase price. In Colorado it is about 166 years to = purchase price at a tax of approx 0.6% of total value. In Harvey that may be the case with tax rates of up to 10% of value.

willowglen

Maryanne – with all due respect, you implicitly are assuming your home values will stay constant. With anticipated property tax increases and the enormous debt held by the State of Illinois and its municipal entities, along with the exodus of people, what has happened in Harvey, where the Alderman’s estimate is likely a bit understated, will occur throughout the State. The property tax problem is only beginning to deliver its misery.

NB-Chicago

Wonder how state proposes to detemine what renters are low income, other than section 8 voucher? Does this mean if your rental building excepts section 8 you also get a prop tax break? As with new city fair scheduling ordinance & state proposed wage theft law, this new prop tax law will require a ton of presumably gov employees to administer, nobody in state pols. discussing cost? And most importantly, tons of prop tax lawyer work for madigan, cullerton and the gang!!

NB-Chicago

if passed, bigger question-the state would be implementing affordable housing policy thru all the different property taxing authorities which are independent from state? how would that work-if for example a cook county property got approved for tax cap from state for providing affordable housing then would state reimburse cook county for the loss of revenue? or as mark writes, cook county would just pass tax cap loss on one property to the next and local tax payer eat it? who would decide whats affordable–the state?, the county? is what affordable in Harvey the same as whats affordable in winneteka? all… Read more »

NB-Chicago

Big Section 8 developer/apartment owners, like politicaly connected–East Lake Mgnt, will be getten a big payday!!!

nixit

So if I own a 2-flat, live on top floor, and have my mother, getting by on Social Security, lives rent-free on the bottom floor, I’m eligible? I gotta think a lot of multi-unit property owners are going to take undue advantage of this law.

debtsor

I don’t think relatives count. And it’s not just 2 flats but buildings of a certain size. Because you know, this is the only way the state can stem the tide of people leaving – give them free stuff because in other states they might actually be able to earn a living wage.