Cook County Property Taxes Favor the Rich and White, Lawsuit Says

CHICAGO (CN) – Two neighborhood associations sued the Cook County assessor after a Chicago Tribune investigation found the office knowingly overvalued homes in poor neighborhoods and undervalued homes in rich neighborhoods, punishing poor and minority homeowners with disproportionately high tax bills.

This summer, a joint Chicago Tribune-ProPublica Illinois investigation found that the Cook County assessor’s office, headed by Joseph Berrios, had consistently failed to properly value residential properties,  favoring wealthy homeowners over poor ones. Berrios is also chairman of the Cook County Democratic Party.

According to the investigation, luxury homes in the city’s richest neighborhoods were likely to be undervalued, whereas bungalows in the city’s poor and minority neighborhoods were likely to be overvalued, forcing those homeowners to pay more than their fair share of property taxes.

In 2015, Berrios announced that his office had implemented a new “state-of-the-art residential assessment modeling technique” created by a team led by University of Chicago professor Christopher Berry with funding from the MacArthur Foundation.

Berry and his team spent weeks training staff at the assessor’s office on how to use the new model, but according to the Tribune’s investigation, the new model was never implemented.

In fact, only a small fraction of the assessments sent to taxpayers in 2015 matched results from either the old or the new model, leaving taxpayers entirely in the dark as to how the city calculates the value of their homes, the Tribune found.

Considered in conjunction with Illinois’ flat income tax and Chicago’s recent property tax hikes – 10 percent on average in 2017 – the county assessor’s valuation methods put an even greater strain on the city’s most vulnerable residents.

As the scandal gained attention, numerous public figures have called on Berrios to resign, including Republican Gov. Bruce Rauner and Democratic gubernatorial candidate Chris Kennedy.

Chicago Mayor Rahm Emanuel said Wednesday that “there needs to be a look at” the challenged assessments, but he did not endorse Cook County Board President Toni Preckwinkle’s call for the county’s inspector general to investigate.

The lawsuit filed Thursday against Berrios and the assessor’s office by the Brighton Park Neighborhood Council and the Logan Square Neighborhood Association, both majority-Hispanic neighborhood associations, relies heavily on the Tribune’s investigation.

The complaint claims that Berrios “systematically and illegally shifts residential property tax burdens in Cook County both from property owners in majority-White neighborhoods to property owners in majority-Hispanic and majority-African American neighborhoods and from the rich to the poor.”

It says there is a direct correlation between the percentage of non-white residents in a census tract to the average assessment ratio of their properties.

“The average effective tax rate (i.e. the ratio of the property tax divided by the market value) for residential property owners in North Lawndale and Little Village (where property values are lower) has been about twice as high as in the Gold Coast and Lincoln Park (where property values are higher),” the complaint states (parentheticals in original).

North Lawndale and Little Village are predominantly black and Hispanic neighborhoods, respectively, while Gold Coast and Lincoln Park are predominantly white neighborhoods, according to the complaint.

The neighborhood associations compared Cook County’s assessment methods to redlining practices, restrictive covenants, and predatory lending practices intended to discriminate against minority property owners and reinforce racial inequality.

“Today, the CCAO’s practices are inflicting new injuries on these same communities – by taxing their disadvantage, stripping capital out of their neighborhoods again, and perpetuating institutional racism,” the lawsuit says.

The assessor’s office disputes the findings of the Tribune investigation, and denied the allegations in Thursday’s complaint.

“We again state that property assessment in Cook County is done correctly and fairly," Berrios’ spokesman Tom Shaer said in a statement. "We do not comment on possible or pending litigation.”

The neighborhood associations are represented by Robert Libman with Miner, Barnhill & Galland; Joshua Karsh with Hughes, Socol, Piers, Resnick & Dym; and Aneel Chablani with the Chicago Lawyers’ Committee.

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