Economic suicide: New study of Chicago area effective property tax rates should leave you speechless – WP Original
By: Mark Glennon,* Updated 9/30/14
A study by the Civic Federation released yesterday computes true, effective property tax rates for Chicago area communities — the property tax rate as a percentage of actual market value.
Some rates honestly have already reached what is effectively nothing less than confiscation. You have to wonder when taxpayers in many of these places will start grabbing their pitchforks. Residential rates of three percent and commercial rates of six percent are becoming common, and some are over double that. Even Chicago’s rate, which is the lowest at 1.84%, is very high by national standards. And look at the pace at which they are increasing, shown in the chart below.
It’s sickening on a personal level for me. Chicago Heights (where I went to high school) is 5.5% for residential and 11.3% for commercial. Harvey (where I was born) is 9% for residential and 15% for commercial. This is madness. You might as well just confiscate property there and get it over with. I grew up with somebody who became a rehabber, buying broken down properties in those communities and fixing them up — just the kind of work we want to see. He gave up and has been liquidating his last holdings. This is a death spriral if there ever was one.
Keep in mind that these rates are calculated only through 2012 taxes and, as any property owner knows, taxes are still soaring further.
And this property tax burden is in addition to the tens of billions of dollars (no typo — probably much more) that Illinois homeowners have already forfeited in lost appreciation due to under performance of property here compared to national averages, which we calculated in our article yesterday.
Here are some numbers from the study but read the whole thing:
*Mark Glennon is founder of WirePoints