Cook County Assessor's COVID-19 Adjustments to Property Assessments in the South and West Suburbs

<div class="body"><p>Click to download <a href="https://prodassets.cookcountyassessor.com/s3fs-public/reports/COVID19/COVIDAdjustmentsSouthTriPropertyValues.pdf" target="_blank">here</a></p><p>The Cook County Assessor has adjusted property values, where they deemed applicable, in response to the impact on real estate values due to COVID-19.</p><p>For residential property, the CCAO principal analysis strongly correlates unemployment with falling home values. The estimated assessed valuation reduction has a median of 10.3% for residential and condo parcels, and 13.1% for multi-family apartment buildings depending on the neighborhood.</p><p>Commercial properties are evaluated using the income approach and had a multiplier factor applied to their baseline capitalization rate based on location, use, and investment class.</p><p>Essential commercial properties such as grocery stores and medical offices received no adjustment, whereas neighborhood restaurants and hotels most negatively affected received 200 basis point reductions.</p><p>As in all modeling, the results are as good as the data sources used to extrapolate the findings. The model estimated unemployment from analysis of labor markets during the Financial Crisis in 2008 and a published study on local labor markets from 2016.</p><p>The report cites the 2008 Case-Schiller Home price index to determine how much housing would decline coupled with a Jan-April 2020 analysis of publicly traded Real Estate Investment Trust (REITs).</p><p>Although one can draw similarities to the financial crisis, there are unique characteristics of our current situation. For example, our entire population was adversely affected by the shelter in place order, federal and enhanced unemployment benefits were not cited, and it was probably premature to assume that home values would decrease so heavily based on unemployment factors. The desire for more space with social distancing rules is causing a boom in some regional markets, not a decline.</p><p>Residential homeowners need to realize a 10.3% reduction in your assessed value does not equate to a 10.3% reduction in your tax bill. There is an inverse relationship between the total taxable value of the neighborhood and the increase of the tax rate—this is tax policy whack-a-mole. You hit one side down, the other side rises.</p><p>Statistical parlor tricks will not lower your tax bill. Adding more properties and value to the tax roll or cutting spending are the two ways of reducing our communities' collective property tax burden.</p><br><p>Jason Terrell</p><p>Certified Illinois Assessing Officer</p></div>