WICKER PARK — Terry Herlihy bought his three-unit greystone on Potomac Avenue in 1978, hoping it would be his home for life.
The third-generation contractor paid $29,000 for his home and a coach house. He put thousands into repairs and renovations while working for his grandfather’s family business. He paid off his house. He got married. He raised his child.
Then the neighborhood started gentrifying. The Herlihy’s latest tax bill was $21,360. Unable to get relief on their bill — and supported by a fixed income — Herlihy could soon be priced out of the home he’s lived in for more than four decades.
“I’ll have to sell in two years,” he said. “It’s wrong. … I keep my blood pressure under control with three quarts of beer a day and lisinopril.”
The Herlihys aren’t alone. Their plight can be seen in gentrifying neighborhoods across the city, where longtime residents can no longer afford climbing property tax bills while trying to retire in homes they worked a lifetime to pay off.
This isn’t supposed to happen. Illinois law provides a special exemption for seniors: a freeze on their “equalized assessed value” — the figure that provides the basis of a property tax bill. But the exemption is useless in neighborhoods like Wicker Park, because people who make more than $65,000 per year don’t qualify — even though keeping up with the tax bills alone in these areas requires a higher income.
Searching for other exemptions in Cook County’s byzantine tax system is something many people don’t have the time or expertise to do. Without swift and targeted tax relief, they are stuck with rising costs and dipping into retirement and other savings to keep their homes.
Cook County Assessor Fritz Kaegi, who took office in 2018, said residents are suffering from years of “distorted” assessments. Half the county’s commercial properties are under-taxed, he said, which shifts the burden onto residential property owners.
Kaegi wants to force more transparency from commercial property owners to ensure they’re paying their share.
“It’s not fair if you buy a home and your tax bill is going up and you’re forced out of the neighborhood,” he said. “We are making the system more equitable by making sure everyone is equally assessed.”
Carlos Flores, 71, bought a building on Potomac in the 1980s and watched his tax bill skyrocket 200 percent in the past 20 years.
Like Herlihy, Flores lives in his three-flat and rents out the other two units and coach house. And though his tax bill increased roughly $4,000 from 2012 to 2018, he also doesn’t qualify for the senior property tax freeze. He had to refinance in 2019 to stay in Wicker Park.
“People say, ‘You live on a gold mine,’” he said. “I use my building as an ATM.”
‘I Don’t Want To Start Over’
Older people who have lived in Wicker Park since before the neighborhood gentrified want to know: Why are the home values on their tax bills set so high if their properties have been largely untouched for decades?
Assessments are based on several factors, but generally the figure is based on what one’s home could reasonably sell for on the open market, Kaegi said. So it’s not an issue of what an individual’s home is worth — it’s the collective market values of homes like it.
That’s an issue for Patricia Stahl, who bought a three-story greystone at 2026 W. Potomac Ave. in the early ’70s. Her block has changed dramatically in the past couple decades as families were priced out and new owners tore down their historical homes for new construction or did gut-rehabs of the interiors, she said.
As Wicker Park became trendier, the “flippers” profited more than long-time homeowners.
“In a way, it’s not comparable, because we haven’t done that,” she said. “If you come into my apartment, as lovely as it is, it looks like the apartment I moved into. … We restored it to its original form. The original plaster walls, we replastered. I didn’t rip it out. There’s no reconfiguration of the interior space. We have the original mantles in the living room and even some original chandeliers.”
After Flores bought his Wicker Park home for $32,000, he took out a loan through former Mayor Harold Washington’s administration to rehabilitate the historical property. Aside from basic renovations, he didn’t do much, he said.
“I bought this building and put work into it, but not millions of dollars,” he said. “The other homes … most are torn down and rebuilt. That’s why I think my property taxes have gone up. There are four or five different homes still standing, original. The rest are all brand new, built in the last 20 years.”
Tax breaks designed to help seniors, veterans, people with disabilities and long-term homeowners provide no relief.
Take Herlihy. He qualifies for the long-term homeowner’s exemption, and until 2017, he also qualified for the senior freeze, which caps assessed home value if the owner’s annual household income is below $65,000.
But in recent years, Herlihy began withdrawing from his 401K to pay his taxes. These withdrawals count as income and pushed him over the threshold for the freeze — which made his bill even higher the following year.
The $65,000 threshold is universal across Chicago. But older people in Wicker Park who rent units in their buildings said they need to bring in more than that to afford their tax bills and must price rents accordingly.
The longtime homeowners exemption is intended to help homeowners in gentrifying areas. But as written, it’s only available to 2 percent of Cook County homeowners.
Ald. Daniel La Spata (1st) said he heard about this issue repeatedly on the campaign trail.
“I would go knocking on doors, meeting seniors in the 1st Ward whose property tax bills on a monthly basis were more than they’d ever paid for their mortgage, which is incredible,” La Spata said. “That may mean it’s time for a conversation on whether we need to be adjusting the income limits on the property tax freeze.”
Kaegi acknowledged decades of wayward assessments don’t help. The fallout from a 2017 Chicago Tribune investigation exposing property tax inequities helped Kaegi defeat controversial former Assessor Joe Berrios.
Promising greater transparency and fairness, Kaegi has hired field workers to visit properties and make sure, for instance, a three-bedroom is not actually a six-bedroom. His office sponsored the Data Modernization Bill, House Bill 860, which would require commercial property owners to submit income and expense information electronically.
“We don’t have enough qualitative information about homes to get it 100 percent right,” he said. “There’s a group of appraisers out there whose business is to tell you a double bacon cheeseburger is actually a salad. Having better data would help to say, ‘No, here’s what the market is paying.'”
While Kaegi was sympathetic to Wicker Park seniors facing this dilemma, he said the best way to ensure people like Herlihy are paying an equitable amount of taxes is to make assessments as accurate as possible.
As for the exemptions, those are dictated by state law. Kaegi’s office can advertise exemptions and help seniors understand them, but the assessor can’t change existing rules or create ones.
The senior freeze itself would not necessarily result in a consistently lower bill; other factors contribute to your property taxes, Kaegi said. Tinkering with any one form of relief would have a ripple effect that could lead to unfair charges for other homeowners, he said.
Longer term, a complete overhaul of the property tax system is needed so residents aren’t on the hook for pension costs, municipal debt and shortfalls in local government funding, Kaegi said. He backed graduate income tax amendment in last year’s election, which failed at the polls.
“This is a perfect example of why relying on the regressive wealth taxes … is harmful,” he said. “It drives [out] the folks [who are] the backbone of their communities, who have the longest memories of what that community is like.”
La Spata also suggested reinstating funding for the Circuit Breaker Tax Grant for Senior Citizens and Disabled program, which applies to homeowners and renters and would cap property taxes at a percentage of income. The state has not funded the program since 2012, the Lincoln Institute reported.
Herlihy paid into his 401K over the course of his 60-year career. He worked for Herlihy Midcontinent, the company founded by his grandfather in 1929 after the family received a bid from the city of Chicago to build Wacker Drive.
He built a red Chicago flag-inspired bridge over Kimball Avenue, and he took a piece of the railing to create the gate outside his Wicker Park home.
This month, Herlihy sent the Treasurer’s Office a check for a little more than $10,000 — the first installment of his 2020 tax bill. He now has $70,000 left in his 401K, he said. If and when he’s forced to sell, he’s worried about the taxes he’d have to pay on the profit he’s made on the home.
“I’m old. I’m 76,” he said. “I don’t want to start over and buy another building.”
As Older People Leave Wicker Park, Affordable Housing Goes With Them
The daughter of a Greek immigrant, Stahl grew up in Wicker Park, once an affordable area for immigrants, people of color and working-class Chicagoans.
Now, she said, she and her husband are among the few landlords left providing affordable housing. They’ve rented one of their units at below-market rate to the same tenant for 20 years, but as property taxes rise, rents have to keep pace.
If Stahl and her husband are priced out of the neighborhood, she said those lower-cost units they’ve provided for decades go with them.
“When I bought my building, I made a commitment to keep my rents affordable to rent to families,” she said. “I want to be able to give him a huge break, but that’s becoming increasingly difficult. As property taxes rise, it’s difficult to maintain a multi-generational building.”
Their situation illustrates another challenge for these homeowners. One eligible tax break benefits commercial landlords — owners of buildings with seven or more units — who provide affordable rent. Owners of residential properties, such as three-flats, do not qualify.
State Sen. Sara Feigenholtz recently introduced legislation to change that.
“What it does, essentially, is it provides a property tax credit for the Carloses and the Terrys of the world who want to keep their rent affordable,” Feigenholtz said.
Stahl said such a program would be a huge help for “mom-and-pop” landlords like her who have not converted their properties from multi-family to single-family homes.
“It’s really sad. This neighborhood has broken my heart,” Stahl said. “The more I talk about it, the more sad I get. We’re being pushed out not only by the finances, but, like I say the soul and heart of the neighborhood as I know it isn’t here anymore.”
‘I Don’t Know My Neighbors Anymore’
Property tax bills in the 1st Ward are some of the fastest-growing in the city. Levies jumped from $27.5 million in 2000 to $77.9 million in 2019, according to a 20-year study compiled by Cook County Treasurer Maria Pappas.
And higher bills are coming; City Council narrowly approved a $93.9 million tax hike late last year to offset the city’s pandemic budget deficit.
“When you have a ward that’s seen that kind of increase, you have to turn over every couch cushion before you can justify raising property taxes,” said La Spata, who voted against the tax hike.
Flores said the most helpful thing the Assessor’s Office could do is proactively reach out to older people to discuss and appeal their bills.
Across Chicago, the Treasurer’s Office estimated nearly 5,300 eligible people had not received senior homeowner exemptions in 2018, while 4,253 eligible people were not receiving the senior freeze.
“If somebody was to look at my tax record from 2012 to 2019 … shouldn’t there be a warning sign, that these taxes have gone up so high for this guy? A red flag?” Flores said. “They should contact the senior people, help you in terms of appraising. In the meantime, it’s up to us. Sometimes we don’t have the time, the capacity or the know-how to navigate through this maze.”
For this tax cycle, Kaegi proactively sent applications for exemptions to those who may be eligible, while working with local politicians and community groups to educate older people, spokesman Scott Smith said.
Flores and his family moved to Chicago’s Gold Coast from Puerto Rico during the ’50s. His father bought a home in Lincoln Park and the family eventually settled in Wicker Park.
A photographer, community activist, public servant and member of the Young Lords political organization, Flores said he and his family are among the last Puerto Ricans from that era still living in the neighborhood because of the gentrification.
“Over the last 10-15 years, Wicker Park has completely turned into a white community. … A lot of them come in, they’re investing in property … but they’re not investing in community. That’s the difference,” Flores said.
Stahl said she’s also seen a loss in community.
“For me, the impact has been how many neighbors I’ve lost … friends, neighbors for years, who sold just because they couldn’t keep up with rising property taxes,” Stahl said. “I don’t know my neighbors anymore.”
Property Tax Resources
If you qualified for the long-term homeowner’s exemption in 2019, you should receive an application in the mail to re-apply for tax year 2020.
If you qualified for the senior freeze in 2019, you are auto-renewed for the same exemption for 2020. Those who newly qualified for the senior freeze in 2020 should receive an application in the mail.
The deadline to apply for any exemption is March 31.
- Calculate your tax bill
- Appeal your assessment
- Check to see if you’re missing an exemption
- View ward-specific data on property tax increases
- Sign up to receive email updates from the Cook County Assessor’s Office
- Learn about the senior freeze
- Learn about the long-term homeowner’s exemption and exemptions in general
- Look up your PIN, neighborhood code and assessed value
- View a calendar of Assessor’s Office workshops and events
- Watch a video of an Assessor’s Office event
Are you a senior citizen in Chicago struggling to pay your property taxes? Share your story by emailing firstname.lastname@example.org
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