In an unprecedented move, first-year Cook County Assessor Fritz Kaegi is seeking to slash the valuation of more than 1,100 mostly high-priced homes in affluent New Trier Township because they are located in a floodplain.
Homeowners in six other north and northwest suburban townships that also were reassessed this year did not receive the same treatment.
Kaegi’s decision, which would save affected New Trier homeowners millions of dollars combined in property taxes, is causing a stir in part because of the unusual manner in which the assessor is going about it — by asking for a mass “correction” after his office had already finalized this year’s reassessment of the township.
There’s also a question of whether the cuts are actually justified, a matter of particular interest to other New Trier taxpayers who will have to pick up the slack if the relative property tax burden is shifted in their direction.
One property tax lawyer who blogs on the subject has derisively referred to the assessment reductions —averaging 19 percent — as a “gift” from Kaegi. I don’t know about that, but count me skeptical as well.
Many of the affected properties are routinely marketed on the desirability of their scenic locations along Forest Preserve land or golf courses, despite their proximity to the floodplain of the North Branch of the Chicago River, also referred to as the Skokie River.
Homes in that area sometimes experience water in their basements after heavy rains that overload storm sewers, although some have been hit with more serious flooding, local officials say.
Does the flooding potential make all those homes considerably less valuable than if they weren’t in the floodplain?
Kaegi says yes, and informed 1,136 homeowners in Winnetka, Northfield, Glencoe and Wilmette of his surprise decision in a letter sent to their homes last month. The letters went to some of the toniest addresses in Cook County — including mansions on Indian Hill Road, Pine Tree Lane and Woodley Road.
In the letter, Kaegi explained his office had decided belatedly to add floodplain data generated by the Federal Emergency Management agency to the computer model used to estimate the fair market value of their homes — resulting in much lower valuations than his office had set just months previously.
This is the first time the Cook County assessor’s office has systematically accounted for floodplains in valuing homes, the assessor maintains. Before now, homeowners have been required to show evidence of actual structural damage from flooding to win a reduction.
Unlike most assessment cuts generated by formal complaints filed with the assessor’s office, often through tax appeal lawyers, this one started outside that process — with a letter to the assessor from a woman complaining he hadn’t accounted for the floodplain when valuing her home, according to a memo prepared by a top aide to Kaegi.
Kaegi’s office said it decided to investigate her claim, which others also had raised, then ran the data and found it to be true.
Data shows properties on a floodplain in New Trier Township are “about 30 percent less valuable than those off a floodplain,” the assessor contends.
A list of properties benefitting from Kaegi’s proposed floodplain “corrections” shows the actual assessment cuts will vary widely — anywhere from less than one percent to nearly 50 percent.
Kaegi’s letter informed each homeowner the assessor would submit what is known as a Certificate of Correction on their behalf to the Cook County Board of Review — and implied it was a done deal.
“In the next few months, you will receive a confirmation letter from the Board of Review with the corrected value,” Kaegi wrote.
Jim Thompson, secretary for the Board of Review, said the assessor’s office has informed the board of its plan but has yet to submit the necessary paperwork.
After it does so, “we need to individually look at each one of these,” Thompson said, adding that it would be “premature to say” whether the Certificates of Correction will be approved.
But Scott Smith, a spokesman for Kaegi, said board personnel “have indicated to us they will be sustaining the majority of these requests, if not all.”
In a typical year, the board handles no more than 30 to 40 such corrections, generally for clerical or other similar mistakes. Kaegi’s request for 1,136 corrections is another first.
By one estimate, the assessment reductions totaling $31,616,000 could save owners of the floodplain properties more than $7 million total in property taxes — an average of more than $6,000 per home — based on this year’s tax rates. Even with the assessment reductions, the homes have an average valuation exceeding $1 million.
Smith said the assessor started using floodplain data in July and has used it for every township reassessed since then “when applicable.” That includes Leyden, Wheeling, Palatine, Schaumburg, Niles and Hanover townships, although Smith noted floodplain data did not necessarily prove “significant or relevant” in determining final assessments for those communities.
The assessor had already completed his work in reassessing Elk Grove, Maine, Northfield, Barrington, Norwood Park and Evanston townships before taking into account floodplains.
Norwood Park and Evanston do not have a significant number of floodplain properties, Smith said, but the office is now “reviewing relevant data” to see if floodplains affect the assessments and whether additional remedial steps are necessary — as in New Trier.
Smith assured me that by next year, when the south portion of the county is reassessed, the assessor expects to have computer modeling that takes into account floodplains in all affected areas.
I’m honestly having a little trouble understanding what makes the New Trier floodplain properties so special, or why the assessor moved so hastily to help the homeowners there but not the others.
Actually, I’m puzzled by the whole business. It seems akin to giving special consideration to Lake Shore Drive condo owners on the basis of the noise and pollution from the vehicle traffic without noticing the lake, beaches, park and bike path beyond.
People who live on Lake Shore Drive — or in Winnetka — are sophisticated enough to choose their homes knowing both the risks and the upside, and that should have been accounted for in the sales prices on which the assessor originally relied to set valuations for the area.
A spot check of the homes due to receive floodplain reductions reveals some head-scratching results.
A seven-bedroom, eight-bathroom home on Locust Road in Winnetka was purchased in 2017 for $3,550,000. Just a few months ago, the assessor set its fair market value at $3.7 million, but after adjusting for the floodplain, he now says it’s only worth $2.4 million. Somehow I doubt the owner would sell it for that.
Then there’s the “completely renovated, expanded and enhanced” 8-bedroom, 12-bathroom manse on Woodley Road currently listed for sale at $2,975,000. The assessor had it valued at $2.7 million, but after factoring in the floodplain, he now places its value at just $1.7 million.
There are many similar examples.
It’s a bad look for Kaegi, who was elected on a reform platform of making property tax assessments fair to regular people.
Maybe he should slow this down a step and regroup.
Source: chicago.suntimes.com