Joe Stanfield lives in the Wicker Park neighborhood of Chicago with his wife and their 18-month-old son. They’ve recently been looking to buy a house, using a realtor based in Oak Park.
Despite the property tax increase facing the city, Stanfield has decided to buy in Chicago — his house focus is somewhat narrow, as he’s looking for a vintage building built between approximately 1870 and 1920. Yet he believes that others might not be as forgiving and that the tax hike could drive them out of Chicago.
“There are plenty of buyers who were potentially leaning towards buying in the suburbs for better schools and a safer atmosphere,” said Stanfield. “The property tax increase could be the last straw for these buyers.”
A couple of weeks ago, I wrote that Chicago’s upcoming property tax hike could very well drive renters to the suburbs as their rents in Chicago rise due to their landlords being charged more for taxes. Yet I wondered if the tax raise might also send home buyers flocking out to the ‘burbs or if a few extra dollars more might be worth it for them to continue to live in the city.
“The average tax bill will go up around $400 to $500 — that’s not going to make enough people give up the city for thesuburbs,” said Scott Berg, who is Stanfield’s realtor and also broker/owner of Berg Properties in Oak Park. “People like living in the city to be near work but also because of the energy, night life, lakefront, beaches, sports events and cultural opportunities that exist in a world class city like Chicago.”
Usually, his clients make the move from Chicago not because of taxes but because the suburbs are more kid-friendly, and their public schools are better and you can get a bigger house with a yard, said Berg. But the hardcore city people will not leave over $500 or even $2,000 if you look at the high end, said Berg.
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“On a million-dollar property in Chicago, taxes are going to increase around $2,000,” Berg said. “That is just not enough of a difference to make people give up all the city has to offer.”
In the Oak Park and River Forest communities, the taxes on a million-dollar house are still going to be $5,000 more than the a million-dollar house in the city, said Berg.
“You can get lower taxes and bigger homes the further away from the city you go, but if you work in Chicago, your commute time goes up and you lose some quality of life.”
If taxes in the city go up substantially more, then the inner-collar suburbs will have the best potential to gain — places like Oak Park and Evanston that are more urban than suburban and have great access to the city, Berg said.
But really, if you think about it, property taxes in the western suburbs aren’t any lower than in Chicago.
“We’re not giving any taxes away here, either,” said Jerry Jacknow, owner of Jerry Jacknow Realtors in Forest Park, where the average property taxes are $6,000 to $8,000. “The city has always had lower taxes.”
But things may be changing, he thinks.
“Big cities have lived on borrowed money for so long,” said Jacknow. “Now they have to play catch-up.”
Any time there’s an increase in anything, the public is affected, said Jacknow, who has been in business for 47 years. But he made the valid point that he doesn’t think people living in condos or homes in pricey places like Wrigleyville will be hurt enough by a few hundred dollars to leave.
However, “I think it may motivate a few people,” Jacknow said.
He said suburban people will be affected too by the property tax increase, because when they come into the city, prices will be raised in places like garages and restaurants to make up for the hike.
“You’re gonna get bit one way or another,” said Jacknow.
And if you think Chicagoans have property tax issues, “Move to New York,” he said.
Felicia Dechter is a freelance columnist for Pioneer Press. Got a real estate-related story idea? Email [email protected].