From Wirepoints — Ted Dabrowski and John Klingner tells Chicagoans to expect property tax hikes:
Don’t be surprised if Chicago Mayor Lori Lightfoot ends up hiking property taxes multiple times during her term.
She doesn’t have a backup plan should many of her 2020 budget assumptions go wrong. And with spiking city pension costs and a new school contract that increases spending by $1.5 billion over five years, Lightfoot could break the property tax hike record set by Rahm Emanuel in his second term.
That should scare Chicago homeowners. Chicagoans have already missed out on 20 years of growth in their retirement nest eggs as a result of the city’s collapsing finances. Windy City home prices – when adjusted for inflation – haven’t grown since 2000.
Chicago sits at the bottom of the 20-city Case-Shiller Index – a leading measure of U.S. home prices – with only Cleveland and Detroit home values performing worse since 2000. Chicago homes are up just 45 percent over the entire period, slightly less than inflation (up 51 percent).
In contrast, residents in almost every other major city have seen their homes grow far more in value. Los Angeles, San Francisco, San Diego and Seattle lead the country and all have grown 160 percent or more.
And it looks like Chicago home prices might soon begin to drop. As S&P reported recently, seasonally adjusted Chicago home prices in September grew just 0.8 percent when compared to the same month last year. That’s the lowest growth the city has seen in seven years.
Falling values at the top of the current bull market should signal to politicians that property tax hikes – and in fact, any tax hike – are the last thing Chicago homeowners need.
That small year-on-year increase in September is the second worst performance in the country, second only to San Francisco. What this shows is how poorly Chicago homes have been doing in both the short and long term.
Read more: Wirepoints