Board gives preliminary OK to landlord tax break
Saturday, February 04, 2006
by Jonathan Lipman
Over the objection of south suburban businesses, the Cook County Board on Friday gave preliminary approval to a tax break for apartment landlords and a tax increase for all other property owners.
The proposal would lower apartment buildings' assessment level from 26 percent of market value to 20 percent over three years in an effort to prevent more apartments from becoming condominiums. Tax rates for all other properties would increase an average of 1.9 percent.
The finance committee, which includes the entire board, approved the measure 8 to 5. It will go before the board again for final approval.
Eight people testified about proposal, with all of them endorsing it except the Southland Chamber of Commerce.
"Commercial and industrial property owners already share a disproportionate share of the tax burden in Cook County compared to all other counties," chamber vice president David Rock said. "Southern Cook ... will continue to see investments bypass Cook County for the more favorable real estate tax climate."
South suburban commissioners Elizabeth Gorman (R-Orland Park) and Joan Murphy (D-Crestwood) opposed the measure. Commissioner Deborah Sims (D-Chicago) was absent.
Murphy had gone into the meeting in favor of the tax break and voted "present" the first time she was called. She switched to a "no" vote after the measure was already defeated.
Murphy said she changed her mind about the proposal after hearing Rock's testimony.
Assessor James Houlihan and affordable housing advocates said the impact on other properties would be slight, while struggling apartment owners would get a monetary incentive to keep the buildings as apartments.
"People need to rent ... and we are bleeding rental housing," said John Pritscher, president of the Community Investment Corp., which makes loans for the rehabilitation of multifamily residential buildings.
Houlihan said he believed the savings would be passed on to renters through market forces. If apartments are more profitable to own, he said, more apartments will come on he market, driving down rents.
But Republican commissioners were not convinced and all opposed the proposal. Carl Hansen (R-Mount Prospect) said he doesn't think renters or landlords were helped the last time commissioners reduced the assessments on apartments in 2002.
"The market didn't do what it was supposed to do last time," Hansen said. "Why do we believe it's suddenly going to take place now?"
Both County Board President John Stroger and his election opponent, Commissioner Forrest Claypool (D-Chicago), supported the proposal. Claypool tried to amend the measure so it would expire in three years, forcing the board to reconsider it then. While Stroger agreed to the amendment, it failed on a tie vote.