CHICAGO: Chicago’s real estate sector has ignited a battle over a US$19bil tax bill that property owners say is holding back new construction and contributing to surging rents.
Donors have poured US$1.4mil in the past six months into the campaign to unseat Fritz Kaegi, the tax assessor responsible for valuing properties in Cook County.
Contributors include the Chicagoland Chamber of Commerce and political action committees tied to hotels, merchants and construction workers.
He will face Pat Hynes, backed by many in the real estate industry and the Cook County Democratic Party, in this week’s Democratic primary elections.
The fight over a seemingly obscure corner of local government offers a window into a power struggle roiling Chicago’s real estate industry.
Property owners said the lack of predictability over how a US$19bil tax bill is divided is curbing development and contributing to rent increases that were the largest in the Midwest in February, according to CoStar data.
“The one major obstacle that certain investors might have is: where’s the predictability?” said Michael Glasser, president of Magellen Properties and head of the Neighborhood Building Owners Alliance.
“If we’re going to invest in a 200-unit apartment complex or a 40-unit apartment complex, in order for us to justify the investment, we need to have a decent handle on what our taxes will be.”
The county assessor determines real estate values for taxation purposes to help pay for levies set by school districts, the county and the city.
In 2024, taxes on Cook County homes rose 6.3%, with median residential bills climbing by more than 30% in parts of Chicago, according to the county treasurer.
These double-digit gains come at the same time that under-supply has left Chicagoans struggling with rising rents.
In February, average rents in the third-largest US city surged 3% from a year earlier, with bigger gains registered only in San Francisco, Norfolk and San Jose, Costar data showed.
Kaegi, who left a finance career in Chicago, came to power in 2018 vowing to clean up the office. — Bloomberg
