Willis Tower: sold at $1,050 million, assessed at $580 million.

December 8, 2017 10:45 AM

How the Cook County Assessor Failed Taxpayers: Joseph Berrios’ error-ridden commercial and industrial assessments punish property owners, benefit lawyers. (slProPublica)

"In 2014, for instance, a building on Oak Street in the Gold Coast neighborhood sold for $14.9 million. The next year, the assessor’s office valued the building at $3.6 million — less than a quarter of the sales price. A year after that, in 2016, the building sold for even more: $23 million.

Eight miles west, a small industrial shop in the working-class Belmont Central neighborhood sold for $110,000 in 2015. The assessor’s estimate that year was $207,140, nearly double the sale price."
posted by crazy with stars (20 comments total)

I'm shocked, SHOCKED to find that corruption is going on in Chicago munic...ccchhhhahahaHAHAHAHA


I'm sorry, I couldn't even finish that.
posted by TheWhiteSkull at 10:53 AM on December 8, 2017 [5 favorites]

Link goes to an article about the article. Is this the target?
posted by rlk at 11:00 AM on December 8, 2017 [3 favorites]

The author has done a ton of work on Chicago assessments (here's a bunch more), and the article in the FPP takes you to everything, with a bit of background.
posted by goatdog at 11:31 AM on December 8, 2017

rlk: It's in the article, but kinda hidden. In a sentence that begins, "My story this week on commercial and industrial assessments is the latest," he put the hyperlink to the article on "commercial and industrial assessments" rather than "My story this week."
posted by rhizome at 11:33 AM on December 8, 2017

I'm pretty sure that this goes on elsewhere. I remember reading an article about how rich people in the Memphis area routinely had their McMansions assessed at a fraction of their past and future sales prices.
posted by Halloween Jack at 11:34 AM on December 8, 2017

Joseph Berrios’ Friends and Family Hiring Exposed Again - this is from 2011, but shows that it's been pretty blatantly obvious he's a massive crook for years. I look forward to voting against him again next year.
posted by dnash at 11:37 AM on December 8, 2017 [1 favorite]

rlk: "Link goes to an article about the article. Is this the target?"

Yes, this is right -- can the mods change?
posted by crazy with stars at 11:39 AM on December 8, 2017

Don't change everything, since there are links to a lot more of Grotto's reporting on this topic in the article you linked to.
posted by goatdog at 11:42 AM on December 8, 2017

Mod note: Fixed the main link to the intended one, feel free to expand additional stuff in the comments here as needed.
posted by cortex (staff) at 11:43 AM on December 8, 2017

Property taxes in Illinois are a bad joke. To make matters worse, the state Speaker of the House and other politicians literally get rich litigating property tax appeals. It is a de facto extortion scheme, in which you the safest way to defend against over-assessment (or better yet, get under-assessed) is to pay politically connected lawyers.

Property taxes here in California are pretty screwy too, what with Prop 13. But at least when a property sells for a given price, it is reliably assessed for that price (barring some edge cases). Assessors should mostly be copying numbers from the recorder and pasting them into the taxrolls, adjusting here and there for FMV. If they do too much else, they are probably doing something wrong.
posted by andrewpcone at 11:53 AM on December 8, 2017 [4 favorites]

I don't doubt the gravity of these accusations but I'm mildly disappointed that we're ten comments into a post about the Cook County Assessor without a single Blues Brothers mention.
posted by kersplunk at 12:01 PM on December 8, 2017 [19 favorites]

The issues with property assessments were well known when I worked for the City 20 years ago, but like so many questionable practices at the time, no one seriously expected the situation could be changed. I truly hope something comes of Propublica's work, but (regrettably) I won't be at all surprised if nothing does and there is another expose about the issue in 20 years.
posted by she's not there at 12:13 PM on December 8, 2017 [2 favorites]

I spent some time writing appraisals in Cook County.

There is greed on both sides. The assessor comes in high, and people appeal, but people with the knowledge/wherewithal also appeal fair assessments to lower their taxes. As a result, the system keeps cranking along, and people who don't have the knowledge/wherewithal get screwed.

Appraising bowling alleys is fun, though. So there's that.
posted by papayaninja at 12:18 PM on December 8, 2017 [4 favorites]

I used to work for a firm that specialized in these appeals. The overall vibe was pretty shady, enough that when they started going to Berrios' fundraisers and encouraging us to vote for him I went ahead and assumed he was shady as hell (and never voted for him). I used to scan the news for word my old employer had been caught red-handed at something, but they're probably too small-fry to even warrant the attention.

If I wasn't at work I'd rage-bingeread the whole series right now. Suffice it to say, everything the article describes squares with my own observations. Oh, Chicago.
posted by Fish, fish, are you doing your duty? at 12:46 PM on December 8, 2017 [3 favorites]

Protip, in Illinois, non-farm real estate is typically assessed for taxes at 1/3 of its market value; in Cook County, there are different levels (10% residential, 25% commercial, and a bunch of others). (Farm properties are taxed on crop potential, which discourages bad land management practices while taxing farms on marginal land at much lower rates.) A lot of people do not understand this about their taxes in Illinois. The Pro Publica articles do a good job, but you will see a LOT of reporting where people claim their property tax rate is "10%". Which is sort-of true. If you own a house (outside Cook County) worth $100,000, it's assessed for $33,333. In Peoria County, we paid right about 9.75% taxes on that $33,333, or $3250 in property taxes on a $100,000 home, which is 3.25% on the market value of the house, which I guess is how a lot of other states do it? It's certainly how national comparisons report it, it's always so confusing to convert the 9.75% on my tax bill from assessed value to 3.25% of market value to compare with what other states report their property tax rates as.

Anyway, if you happen to see any national articles or op-eds that are like, "This house is assessed at exactly one third of its market value! That's outrageous corruption!" it's usually that the national commentator doesn't know about the "equalization" process in Illinois. If it's EXACTLY 1/3, or 1/4, or 1/10 of market value, the reporter is confused. It's also good to keep an eagle eye on what the property taxes are being reported as -- around 2-4% is the market-value tax that's used in most national comparisons; if they're quoting 10%! 12%! as evidence of blue-state tax-madness, it's because they don't know about the equalization process, and that that number isn't on market value.

Here's some IDOR explanation:

By law, most real property is assessed at 33 1/3 percent of market value. There are some exceptions to this rule, however.
• Farm acreage is assessed based on its ability to produce income, which is called its agricultural economic value. A farm building is assessed at one-third of the value that it contributes to the farm’s productivity. (Farm home sites and farm dwellings are assessed at one-third of their market value.)
• Counties that have a population of more than 200,000 may classify property for assessment purposes. Cook County is the only county that has adopted such a system; it has 13 classes of property. The county ordinance specifies assessment levels from 10 percent of market value (residential property) to 25 percent of market value (commercial property).
• Illinois statutes provide alternate valuation procedures or exemptions for certain qualifying properties

Anyway, Cook County is obligated to reassess properties every 3 years, and the fact that they're just inserting the same numbers over and over means they're just not. They just can't be bothered.

And that's before we get to all the wild deliberate corruption and class-targeting in assessments and appeals.
posted by Eyebrows McGee at 12:49 PM on December 8, 2017 [20 favorites]

This is 100% the case on Long Island too. People can and do appeal without representation, though. Regardless, people who don’t appeal are bearing the brunt of property tax while those who appeal have homes appraised at tens or hundreds of thousands under market value.

It’s a racket for sure, and the solicitations from law firms to appeal every year are constant.
posted by uncleozzy at 4:50 AM on December 9, 2017

Here in texas, we had to vote in a state law to stop county appraisers from raising property value more than ten percent a year. So now, we're guaranteed to have the value of our property go up 10% every year. I bought my fixed upper for 250k six years ago. House was destroyed by tornado, while it was being rebuilt, they still raised the value, and now we're paying tax on a property they say is worth half a million, but we couldn't sell for half that. Our property taxes are almost 10k next year. And because our rural fixer upper has been surrounded by new mcmansions, the attorneys say there's not any room for us to argue it down, we should just sell to the developer who wants the land.
posted by SecretAgentSockpuppet at 8:05 AM on December 9, 2017

Is that the place with the Picasso?
posted by chasles at 8:18 AM on December 9, 2017 [2 favorites]

Berrios defends himself with this statement: “Our staff is 25 percent smaller than when I took office,” he told county commissioners at the July hearing. “But we still get the job done right. The assessment cycle has been completed either on time or early six years in a row, after the previous assessors were late for 34 years straight.”

Which reminds me of a stupid meme I saw yesterday on Facebook:

Interviewer: It says in your resume you are really fast at math. Whats 30x17?
Jobseeker: 47
Interviewer: That wasn't even close.
Jobseeker: No, but it was fast.

Yeah, of course you can finish an assessment cycle really quickly if you just input the same values as you did from the last cycle!
posted by Alnedra at 12:20 AM on December 11, 2017 [2 favorites]

To me the TL;DR is: the office delivered their assessments late for 34 years in a row. Berrios came into office, fired the most-experienced staff, hired some friends and family, and started just submitting the same numbers over and over, i.e., not doing any actual assessing. So of course they made every single deadline, and could do it with a skeleton crew of inexperienced staff. The large corporate landowners were able to hire politically-connected lawyers to get their assessments changed, but everyone else had to suck it.
posted by panglos at 7:00 AM on December 11, 2017 [1 favorite]