"Chicago already hosts the second-highest residential property taxes in the nation."

This can't be true as either a percentage or dollar amount. Chicago's rates are still lower than the majority of the suburbs here. They must mean this on the State level, which I believe is true where Illinois has the second highest average rate behind New Jersey.

I meant that people universally appreciate quality traditional European architecture, not that living conditions in those cities were always stellar.

Property tax increases and the uncertainty of the pension fiasco is certainly to blame.

the SFH market has come to a stand still in many North Side neighborhoods - nobody wants to buy a SFH with a $25K+ property tax bill, especially when we can expect a 40% increase over the next several years.

good news IMO, excited for the drop

Frankly I agree, too many bottom feeders around bidding everything up to top dollar. To make matters worse there's too much demand for construction workers and now the price of renovation is high and the speed is slow.

The "affordability crisis" in Chicago is still a lie though. Just picked up a SFH on the edge of Old Irving Park three blocks from the Blue Line with 5 beds, 2.5 baths, on an extra deep true double lot for a hair over $300k. Totally habitable condition too if you are OK with 1970s cabinets and finishes.

Can't believe what you can get in this city still. Oh and the tax bill on this was $2,000/year because of senior freeze, so much for the absurd notion that taxes force old people out of their homes. It's going to jump back up to $6000-6500 for us since we only get homeowners exemption.

I thought you moved to suburban Minnesota?

Our plan is to move to Minnesota - build a house on Lake Minnetonka.

Still in Chicago for probably a year or so.

^^ brrr. Whenever I start complaining about winter in Chicago, I just think about winter in Minnesota lol.

I don't even want to think about winter in Chicago or Minnesota this year! Just makes me depressed, and wishing for summer! :cool:

The taxes are what makes it not affordable though to many people. $6000 a year in taxes is alot! That's alot to pay every year in addition to a mortgage. My Dad in Florida only pays $2500 taxes for a 3 bed 2 bath condo, no state income tax, and 6% sales tax. And the taxes are just going to keep going up and up in Chicago.

I'm hoping there's a real estate crash so I can get a good deal on a condo or house, I had no money in 2009-10 to buy anything then.

^^I'd hope for a crash for the same reasons if I wasn't afraid the city would never recover, considering how awful our finances are even during a long economic expansion..

Yeah, a crash will not be good for Chicago. Rising real estate values is what's feeding the pension monster.

You think $2500/yr on a 3/2 condo is significantly less than $6000/yr on what will be a 6 bedroom / 3.5 bath home on a huge lot? Condos pay less per bedroom than SFH because you are splitting up the same amount of land between more owners. If you simply double the taxes since the SFH is probably 2X the size of the condo, you are really talking about $5000 versus $6000... That's really not a huge difference, now consider the implications of being one unit on 8,000 SF of land versus what? 20 units on 20,000 SF of land or something like that? That's almost ten times the density so of course the per unit cost is going to be lower.

Is Chicago a high-tax city?
 

Chicago vs suburbs

2017 tax rates for residential properties in Chicago and 11 Cook County suburbs were

Harvey: 7.08%
Chicago Hts: 5.01%
Elgin: 3.06%
Oak Park: 2.85%
Arlington Hts: 2.47%
Schaumburg: 2.44%
Orland Park: 2.36%
Elk Grove Village: 2.33%
Evanston: 2.15%
Barrington: 2.00%
Glenview: 1.99%
Chicago: 1.74%

Numbers are from a Civic Federation report.

Chicago vs other states

One of the reasons property taxes in Illinois are higher than in other states is that cities and school districts in Illinois get relatively less money from the state than cities and school districts in other states get from their states. So the best way to compare Chicago to cities in other states is to look at all taxing districts (state, city, county and other) and all types of taxes (income, property, sales tax and other). In Chicago, “other” includes the RTA sales tax.

A year ago, when Lightfoot was running for mayor, she said that Chicagoans “live in one of the most taxed cities and the most taxed county, unfortunately, in the country”. Politifact looked at this and rated her statement MOSTLY FALSE. The basis for Politifact’s rating was a study prepared by the Government of the District of Columbia that shows the combined 2016 tax rate for the largest cities in each of the 50 states plus DC. Cities that aren’t the biggest in their state (San Francisco, Dallas, etc) are not included.

Since the Politifact rating, DC has come out with a study based on 2017 taxes. The 2017 numbers include the effect of Illinois income tax rate increase to 4.95%

Of the 51 cities ranked, for families earning $25,000 / yr, Chicago had the 6th highest combined tax rate at 14.3% And for families earning $150,000 / yr, Chicago had the 17th highest combined tax rate at 11.1%

The numbers below (from the DC study) show the combined tax rates for Chicago and six other large cities plus the largest cities in seven neighboring Midwest states.

#4 Detroit 13.4%
#5 NY City 12.9%
#7 Des Moines 12.6%
#8 Milwaukee 12.5%
#10 Los Angeles 12.0%
#11 Philly 12.0%
#13 Kansas City 11.7%
#16 Columbus 11.1%
#17 Chicago 11.1%
#22 Atlanta 10.5%
#23 Indianapolis 10.2%
#24 Minneapolis 9.8%
#34 Washington DC 9.2%
#46 Houston 5.8%

To conclude:
• Taxes in Chicago are regressive. The combined tax rate for high-paid families (11.1%) is lower than the rate for low-paid families (14.3%).
• High-paid families in Chicago are not among the highest taxed in the country. They’re not even among the highest taxed in the Midwest.
• If you have a $25,000 / yr property tax bill, you’ve probably got a house in the top ten percent. You’re not overtaxed.
• Lower income families may be leaving Chicago because of the taxes (and crime) but I don’t think upper income families are.

In my experience, this doesn't really paint the entire picture, instead this is a snapshot in time.

My property taxes on my primary residence have nearly doubled over the past several years, same with all of the neighbors on my block.

While that is a tough pill to swallow, what really gets me is the uncertainty moving forward. The City and State are a financial nightmare, and the only way to continue to fund the pensions is through taxing upper middle class residents.

Speaking with my RE attorney and my Alderman (Tom Tunney) both anticipate a ~40% property tax increase over the next "several years". This money is going towards schools or infrastructure improvements, it's going towards funding the pension obligations.

Additionally, it would be one thing, if property taxes were raised, while in parallel the Pensions were restructured in a way that didn't rape the City/State that would be fine, because there would be a light at the end of the tunnel. Instead, we are squeezing the city residents for what is still a broken system, it truly is like pissing in the ocean.

On top of that, where am I going to send my kids for High School? Lakeview High School??? The CPS is a disaster as well, so on top of the property tax increases, families need to prepare for private school as an alternative to High School.

I'm not the only one who feels this way, i've seen roughly 30% of my neighbors turn over in the past 2 years, mainly replaced by childless couples. If you're a renter or no kids, the city is a great choice, but under the current financial situation, any family wanting to live in a decent neighborhood will have a tough time making the city work.

I'm not convinced that's true for upper middle class families.

I think the sticking point for many UMC families is the detached SFH issue. Those can be wildly expensive in the trendy hoods and, with the associated taxes, can be tough to make work.

But if you're willing to do multi-family, the price point drops dramatically. Taxes on our 3 bed/3 bath 2,300 SF duplex down condo in Lincoln Square are $8,000/year. That's a lot of dough, but very doable on our income.

If we traded up to a SFH that was 75% more expensive, with double the taxes, then yes, our finances would be stretched much thinner.

I hear you, but the reality is, the majority of families will not consider a condo as their "forever home" where they will raise their kids. Having neighbors above or below presents quite a few concerns.

If a family has a budget of $1M there are not that many quality SFH options in desirable North Side neighborhoods (Lincoln Park, Lakeview, Roscoe Village, North Center, Lincoln Square), anything under $1M is going to have big compromises, plus a tax bill that is certainly going to increase by a substantial amount over the next several years.
That has been my personal experience, and the experience of families I know in the city.

Chicago Public Schools
 

I’ve lived in Chicago for about 45 years. I’ve seen many changes (mostly for the better) and one of the biggest has to do with the number of professional people raising their families in the City. In the 1970’s and 80’s single people in their twenties would move to Chicago. But then when they were in their thirties, they’d be married with a couple kids and when it was time for the kids to start school, they’d move to the suburbs.

Over the years this changed and now more people are deciding to stay and raise their kids in the City. Not everyone, of course, but a lot more than 40 years ago. I think a lot of this has to do with the improvements in the public schools. Today, people pay a premium to live what they think is a good school district (e.g., Bell Elementary). And the top five high schools in the state are all CPS schools.

I have a boy who’s in his twenties now and at one time his goal was to go to Lane Tech. But he couldn’t get in and he ended up going to Gordon Tech (now DePaul College Prep). So it’s been a few years but I remember the family frustration of paying a lot for something that wasn’t our first choice.

And then you’ve got the teacher’s pension bullshit. I HATE the union for not being willing to contribute a nickel to solve that problem. But that’s a separate issue and I still think CPS has greatly improved over the years.

Finally, I know very little about Lakeview HS. When you say “CPS is a disaster” are you talking about all of CPS or just Lakeview?
I’d be interested in your thoughts on any of this.

In that case, no top-tier urban US city will work for upper middle class families ($150K - $250K AGI) that demand nothing less than a renovated/new construction move-in ready detached SFH in a trendy urban neighborhood, unless you come from money or get a big fat inheritance or something like that.

The trendy urban neighborhoods in America's alpha level urban cities are simply way too urban to have anywhere near enough detached SFH's to meet the demand, thus they become the exclusive domain of the wealthy.

Only 10% of Lincoln Park's housing units are highly coveted detached SFH's. Hell, even all the way up here in Lincoln Square that percentage only goes up to 15%. So of course there's a huge price premium for such a staunchly limited, extremely desired commodity.

That pattern is repeated in all of the big urban US cities: NYC, Boston, LA, SF, etc. If you ain't rich, then you ain't getting no fancy SFH in a desirable urban neighborhood.

However, IF you can get over the "shame" of living in a multi-unit flat building, then Chicago does have a wealth of good options for larger family-sized units that people in that upper middle class bracket can very much afford.

And yes one of the reasons those kinds of units are so much less expensive than a comparably sized SFH is the fact that a large percentage of upper middle class people with families simply won't accept anything less than a SFH, so off to the burbs they go.

My wife and I almost ended up following them out there until we came to agree that location was more important to us than a SFH. So, Lincoln Square > Skokie, for us. many other families choose differently.

If you're not stinking rich, you're gonna have to make compromises somewhere along the line.

Again, I hear you. I grew up in Manhattan, in a small apartment, I understand the trade offs.

However, what I'm saying is the reality in Chicago, upper middle class families typically do not want neighbors above or below them - and more often than not will not consider condos.

Upper middle class families may stick it out in a condo in the city with kids too young for CPS or may even hang around through a few years of K-8, but the majority of Upper Middle Class families will not stay in the condo for their kids entire school age - the MLS data supports this (I'm a licensed RE agent in Illinois) and Condo's typically sell every 5 years.

My bigger point is families who would consider staying in the city and moving to a bigger home, are looking at 2 hurdles in 2019:

1. Property Tax burden: There is too much uncertainty with the City and it's financial mess, and buyers don't want to risk purchasing a SFH at the top of their budget only to find they've had a major property tax increase.

2. CPS: The question I hear quite a bit is "where will I send my kids to High School?" - the vast majority who can afford it, send their kids to private schools. I live 2 blocks from Blaine Elementary (One of the top K-8 schools in the city) and I've yet to see a family have their kid finish there, about 5 or 6th grade they start thinking about HS, and literally 100% of families have bailed for the city for the burbs for a more stable HS situation.

I don't know if it's that the average midwest family requires/desires more space than a typical NYC / SF / Boston family but I see families in those cities sacrifice space in a way that the typical Upper Middle Class Chicago family will not. Just an observation, but my personal experience.