Cook County Assessor Fritz Kaegi on Thursday renewed his call for commercial property owners to turn over financial data to his office, saying it will help rid the property tax system of “idiosyncrasies.”
“Real estate is a global asset class driven by institutional investors of all kinds,” he said. “Our idiosyncrasies when it comes to real estate taxation are definitely not charming.”
Kaegi’s push to make Cook County commercial property owners provide rent, income and expense data requires a change in state law, and a bill allowing the practice is pending in the Legislature. Passage of the bill would go along way to reforming the much-maligned property tax system in Cook County and elsewhere, Kaegi said in a speech to the City Club.
“The only real way to solve this problem is to require income-producing properties to submit their income and expense data at the start of the assessment process,” Kaegi said.
Kaegi was seated as assessor in December after beating Joe Berrios in the Democratic primary in March 2018. Berrios’ office had come under fire for, among other things, undervaluing a number of high-profile commercial properties, including the Willis Tower and Prudential Plaza.
To reform the assessor’s office, Kaegi said he will need access to more data.
The bill he’s backing in Springfield would require owners of income-generating properties to disclose rent, income and expense data. Some properties would be exempt under the current bill, including commercial properties with a market value under $400,000 and residential properties with six or fewer units or with a market value under $1 million, according to Capitol Fax.
Kaegi said the system will make Chicago a better real estate market for homeowners, landlords and institutional investors alike.
“Developers will require less a margin of error when deciding whether to invest,” Kaegi said. “Lenders can cut back on escrow and can lend more against their property’s value. … And current owners can get more resale value for their buildings.
“Each of these effects will enhance growth, value creation and vitality in the Chicago area and lead to fairness and accuracy for everyone,” Kaegi said.
Since taking over the assessor’s job, Kaegi also has pushed for a technological overhaul of the assessment process after Berrios’ office was criticized for using Zillow and Trulia data to set property values. He said fairer commercial assessments would help residential homeowners, some of whom have struggled with dramatically increased assessments, by spreading out the tax burden more.
He’s also launched efforts aimed at improving transparency, including a new website, logs of visitors to the office and posting assessment models on open-platform websites like Github, Kaegi said.