Cook County, Illinois Approves Revisions to Its Real Property Classification Ordinance

COOK COUNTY ASSESSOR James M. Houlihan recently asked the Cook County Board of Commissioners to make further revisions to the Cook County Real Property Classification Ordinance. The ordinance, which is the only one of its kind in Illinois, provides for varying levels of assessment for differing classes of property. Properties can be assessed anywhere from 16 percent to 38 percent of market value depending on the type and usage of the property. All other counties in the state uniformly assess property at 33 percent of market value as dictated by Illinois statutes. Cook County, pursuant to its home rule powers, passed the initial version of its ordinance in 1976. In the 24 succeeding years the County has amended the ordinance 19 times.

The Assessor's proposal consisted of changes in six separate areas of the ordinance. The County Board of Commissioners agreed with four of the Assessor's recommendations, choosing not to adopt two of the more controversial measures. The following changes were approved:

APPROVED CHANGES

Class 3-Storefronts/Apartments Multi-Use Properties

Smaller commercial entities that are typically found in storefronts with residential apartments on upper levels were previously assessed at 33 percent of market value. These properties are now being assessed at 16 percent of market value. To qualify, these properties must contain less than 20,000 square feet of building area and six or fewer total units combined.

Class L-Landmarks
Commercial and industrial substantially rehabilitated buildings which are designated as landmarks by local preservation commissions were previously assessed at 16 percent of market value for ten years, 23 percent in year 11 and 30 percent in year 12. After 12 years the properties are assessed at the same assessment level as other commercial (38 percent) and industrial (36 percent) properties. These properties are now to be assessed at 16 percent of market value for 12 years and the resolution process for designation as a landmark has been streamlined.

Class 8-South Suburban Tax Reactivation Program
Five of the south suburban townships; Bloom, Bremen, Calumet, Rich and Thornton, exhibit extreme economic distress that is evidenced by a number of economic indicators. When compared with the other 33 townships these townships demonstrate slower growth in property values, the lowest valued properties, greatest population losses, highest tax rates, more tax delinquencies, more scavenger tax sales and more vacant land (excluding farmland). The Assessor proposed a pilot program in these townships, which would be administered by the Cook County Department of Planning and Development. This project will utilize the "No-Cash Bid" process to acquire tax delinquent commercial and industrial properties. Municipalities in which these properties are located will enter into an intergovernmental agreement for the acquisition, marketing, promotion and development of the property. The Illinois Department of Commerce and Community Affairs (DECCA) has promised a $5 million grant to this program.

Properties included in this project will automatically receive the Class 8 incentive, which provides for the assessment of these properties at 16 percent for 12 years. This incentive may be renewed for an additional ten years provided the municipality in which the property is located passes a resolution indicating the incentive is necessary and beneficial to the local economy. The applicant must also file the resolution and renewal application with the Assessor prior to the expiration of the initial incentive.

Class 9-Affordable Housing
This incentive is for multi-unit rental buildings, rehabilitated or newly constructed, serving low or moderate income households at affordable rents. These properties are eligible for a reduction from a 33 percent level of assessment to 16 percent for ten years. The approved change reduced the percentage of units necessary to maintain the affordable rent schedule from 50 percent to 35 percent. The incentive is now renewable beyond the prior 30-year maximum period.

REJECTED CHANGES
The Assessor had proposed two additional measures, which the Cook County Board of Commissioners declined to adopt. These proposed changes involved reductions in assessment level for two basic property classes without any special circumstances. The two rejected proposals are as follows:

Class 5b-Industrial Properties
Industrial properties in Cook County are assessed at 36 percent of market value. The Assessor had proposed a reduction in the assessment level to 33 percent.

Class 3-Multi-Family Residential Properties
Multi-family residential properties (apartments with more than six units) are assessed at 33 percent of market value. The Assessor proposed to reduce the level of assessment for these properties to 30 percent.

CONCLUSION
Cook County should be commended for its continued efforts to recognize inequities in its real property taxation scheme and make appropriate adjustments. There are apparent differences of opinion between the Assessor and the County Board of Commissioners with respect to the degree of change required. The County Board seems to favor changes that recognize specific, narrowly focused solutions while the assessor proposes broader and more extreme changes. It is in the best interests of the taxpayers of Cook County for these officials to evaluate the effect of these changes over time and make changes only if they are clearly appropriate for the continued viability of the overall taxation scheme in Cook County.

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