Who’s afraid of declining commercial real estate values in the Loop? We are, and you should be too, especially if you own a home in Chicago.
The reason comes into sharp focus in a new report from Cook County Treasurer Maria Pappas. It reminds us of a stark math problem: When commercial property values in the Loop fall, the tax burden shifts onto homeowners.
“When the Loop gets a cold, the rest of the city gets pneumonia,” Pappas said. “Homeowners across the city are paying the price.”
Black-majority neighborhoods on the South and West sides saw some of the steepest percentage jumps in assessed values and hence their median tax bills.
In West Garfield Park, for example, the typical homeowner’s tax bill jumped by almost $2,000 — a 133% increase. Home values in these neighborhoods have surged since the pandemic, yet assessed values in West Garfield Park remain below their 2006 levels, according to the treasurer’s office. A tight housing supply has funneled buyers into less expensive neighborhoods, intensifying these increases.
Residential properties throughout Chicago’s South and West sides, like these on West End Avenue in West Garfield Park, had their property assessments increase last year. (Antonio Perez/Chicago Tribune)
By contrast, downtown is moving in the opposite direction. The Central Region — where the Loop is located — was the only spot in the city where commercial property values declined, losing a total of $379.2 million, or 7.2%, in assessed value, according to the treasurer’s office. As a result, Loop commercial properties now are responsible for 11.2% of the city’s tax burden, compared with 13.4% the year before.
Pappas’ office accurately referred to our system as a “zero-sum game,” meaning that when one group — in this case, commercial owners in the Loop — pays a smaller share, the other groups have to make up the difference.
In years past, homeowners in Chicago benefited from sharing the tax load with owners of skyscrapers and office buildings in the Loop and elsewhere in the city. Chicago homeowners now will pay the price for the Loop collapse — in the property tax bills just arriving in their mailboxes and due Dec. 15.
All of us, in the city and beyond, have an interest in a growing Chicago business district. Growth means wealth, and more valuable commercial properties pay higher tax bills, taking the pressure off of everyone else.
We need a strong central business district for many reasons, not least of which is a thriving job market. What people often overlook is the impact the Loop real estate market has on our property tax bills. We’re confident they won’t overlook it any longer.
Property taxes long have been a big problem in Cook County, and taxpayers are facing multiple pressure points. This year is no exception. Taxes are rising throughout the county as governments continue increasing their levies. School districts alone sought $446.6 million more in 2024, according to the treasurer.
But the biggest shock this time around is tied directly to Chicago’s declining economic star. That makes reviving the Loop an urgent priority.
Yet our policymakers, particularly Mayor Brandon Johnson, consistently undermine that goal. Case in point: His rhetorical demonizing of corporate employers as he attempts to hike taxes on them. The mayor clearly wants to evade responsibility for Chicagoans’ soaring property tax bills a little over a year before he faces reelection. But his principal role in undermining private-sector confidence in the city’s future keeps businesses from investing in the city, particularly downtown.
In that way, he bears plenty of responsibility for your tax shock, South and West siders, even if he can say the city of Chicago isn’t hiking its property tax levy this year.
Submit a letter, of no more than 400 words, to the editor here or email letters@chicagotribune.com.
