Chicago is on the brink of its largest property tax increase in modern history after years of mismanagement and kicking the can down the road.
The levy, $588 million, seems extremely high and daunting not just to a college student, but to typical family living anywhere in the city. Oddly enough, no one is very surprised that measures such as this need to be taken.
The money will go towards police and fire pensions, which have been severely underfunded for years.
According to the Chicago Tribune, this will put the collective police force in position to receive an 11 percent raise over the next five years.
While the property tax in Chicago may seem like a brutal situation on the outside, the tax will be relatively modest considering what surrounding suburbs have to pay.
“I do know that taxes on property and real estate as whole is more expensive in the suburbs,” finance major Steven Rojas said. “I’m from the Wheeling area, and our property taxes, assessments, and value are all higher than that of the collective Chicagoland area.”
When considering the tax situation on a university level, it is tough to gauge what impact it will have on the students directly.
Landlords and building owners will have some decisions to make on how they impose their tax. Rent is a clear-cut option, but isn’t the end all be all.
Security deposits, application fees and utilities are all subject to see an increase to compensate for homeowners.
If the city council approves an increase as expected, experts and property owners will have more insight as to what adjustments they will make. But with so many moving parts, it is hard to tell what areas will be impacted most by this cost spike.
Geoff Smith, the Executive Director of Housing Studies at DePaul, believes each market that DePaul falls in will maintain its stable value and foundation.
“Both the Loop and Lincoln Park campuses are some of the stronger markets in Cook County,” he said.
“The Loop in particular has seen a significant increase in the residential market, so it’s fair to assume that citizens moving into that sort of market are not only aware of the cost increase, but are prepared for it.”
Furthermore, a study done by the Civic Federation shows that Chicago as a whole had the lowest effective residential rate in Cook County over the last decade.
The average tax rate for the Chicago area in 2014 was 6.81 percent.
A projection from the study shows an overall increase to 7.6 percent, just a tick above the tax rate of Inverness, one of the more affluent northwest suburbs in Illinois, with a current property tax of 7.59 percent.
The Loop, River North, the West Loop and the collective downtown area however, would face a more intense increase.
The 7.2 percent rate would climb to just under 8 percent.
Only New York City has a higher commercial real estate tax than Chicago. With developers and builders putting much of an emphasis on tax bills rather than tax rates.
As the increase looms, students should take notice. This increase will have a domino effect for millions of Chicagoans, some more than others.
DePaul, however, is in a position to continue to thrive due to the current stability of the market.
This discussion isn’t going anywhere. The tax will come, more than likely – and we will have to adjust.