CHICAGO | General Discussions

[moorhosj]

Originally Posted by OrdoSeclorum

I think you may have a little bit of a perception issue. NoVA property tax bills are similar to the tax bills paid in Chicago land and in most big cities: https://money.cnn.com/interactive/re.../property-tax/

Everyone in Chicago is concerned about taxes going up. But if taxes go up enough that it would "spell disaster for the city", the taxes would raise less money. There's a natural equilibrium.

One thing we DON'T have to worry about is high taxes pushing the wealthy out of the city. Wealthy folks don't flee to the suburbs in Paris. Wealthy folks in NYC pay a 5% income tax just TO THE CITY to live there. Pro athletes often choose to move to high tax states over low tax states, even though the contract amounts are the same. Once you have more money than you can spend, only the real oddballs move someplace stale and unproductive just so that they can keep a little more of it. If you're an orthodondist saving $5,000 a month and taxes go up and you now save $4,200 a month, these folks don't even notice it. Life feels the same. And if they do notice it, it still feels a lot better than having to live in Northbrook or someplace like that.

I'd like it a lot better of taxes went up and were paying for new bike lanes and better transit and employing Chicagoans. Those investments deliver an ROI. It sucks that they are going up and are going to pay for something that brings no benefit. But the fact is that we should have raised taxes a long time ago and that having artificially low taxes for so long didn't help Chicago at all.

I think the better way to think about it is that it's already baked into the market prices. It may be part of the reason our home values aren't as high as some other cities.

As a point of reference, New Orleans has just as bad of a crime rate as Chicago (I think it's actually worse). It just doesn't make the news as much because it isn't as big and didn't have a recent President come from there.

[OrdoSeclorum]

Originally Posted by moorhosj

As a point of reference, New Orleans has just as bad of a crime rate as Chicago (I think it's actually worse). It just doesn't make the news as much because it isn't as big and didn't have a recent President come from there.

*snort* New Orleans, of course, but St. Louis, Kansas City, Indianapolis and Minneapolis all have a higher violent crime rate than Chicago. And we are tied with Houston and just above Atlanta. Chicago's crime rate isn't great, but it's typical for a big American city. Anyone who believes otherwise has been consuming media that's meant to scare, not to inform.

There are lots of reasons to lie about the crime rate in Chicago. It's a big, successful city in a blue state in the Midwest. If you point to Chicago, it seems close enough to swing voters in Wisconsin and Iowa that you want to trick into buying gold or a reverse mortgage that it works as shorthand. Why not use D.C.? Too much media based in D.C.. They'd say "I'm there all the time. D.C. doesn't really seem that bad. This crime rate thing isn't really a story." Why not pick Houston, Dallas, Miami or Atlanta to scaremonger about crime? Those cities aren't in solidly blue states, like Chicago, so saying that they are "dangerous and failing" doesn't wrap up the narrative as tidily as Chicago does.

This has been going on for years, but when Obama came out of here... whoo boy. It was game on.

[Handro]

Originally Posted by OrdoSeclorum

*snort* New Orleans, of course, but St. Louis, Kansas City, Indianapolis and Minneapolis all have a higher violent crime rate than Chicago. And we are tied with Houston and just above Atlanta. Chicago's crime rate isn't great, but it's typical for a big American city. Anyone who believes otherwise has been consuming media that's meant to scare, not to inform.

There are lots of reasons to lie about the crime rate in Chicago. It's a big, successful city in a blue state in the Midwest. If you point to Chicago, it seems close enough to swing voters in Wisconsin and Iowa that you want to trick into buying gold or a reverse mortgage that it works as shorthand. Why not use D.C.? Too much media based in D.C.. They'd say "I'm there all the time. D.C. doesn't really seem that bad. This crime rate thing isn't really a story." Why not pick Houston, Dallas, Miami or Atlanta to scaremonger about crime? Those cities aren't in solidly blue states, like Chicago, so saying that they are "dangerous and failing" doesn't wrap up the narrative as tidily as Chicago does.

This has been going on for years, but when Obama came out of here... whoo boy. It was game on.

Yes it does get annoying arguing against Chicago's rep as a crime capital. Plenty of other big, "safe" cities that people visit and move to each year have higher violent crime rates than Chicago (Philly, Washington, Houston) as you mentioned. I don't know how the city would even begin to point this out though.

[OrdoSeclorum]

Originally Posted by Handro

Yes it does get annoying arguing against Chicago's rep as a crime capital. Plenty of other big, "safe" cities that people visit and move to each year have higher violent crime rates than Chicago (Philly, Washington, Houston) as you mentioned. I don't know how the city would even begin to point this out though.

It's a headwind. But when things flip, they can flip fast. There were a series of movies made in the 80's about New York needing a wall around it because it was so violent. And if you watch "Death Wish" (1974) now, it seems unbelievable. (Also unbelievable is Jeff Goldblum's performance as a street thug)

But a few years of solid, above-trend growth, job growth and lower crime rates and Chicago would become a man-bites-dog story and THAT would become a news story.

[moorhosj]

Originally Posted by Stockerzzz

That's not how property taxes work. The units of government set the levy. The levy is the amount they will collect.

Then the levy gets divided by the assessed value of property. It's not a demand based metric like income taxes or sales taxes.

I think the argument is that if the taxes get too high, people will just move away in droves and thus less taxes would be collected.

[sukwoo]

Originally Posted by Stockerzzz

^ But the levies would be the same even if 50% of all property owners left Chicago tomorrow. The rates would skyrocket for everyone else, but the same amount of taxes would be collected for each unit of government (less a loss collection for people refusing / unable to pay).

Sure in theory. At a certain level of taxation, you will run into issues of non-payment/abandonment of property.

[moorhosj]

Originally Posted by Stockerzzz

^ But the levies would be the same even if 50% of all property owners left Chicago tomorrow. The rates would skyrocket for everyone else, but the same amount of taxes would be collected for each unit of government (less a loss collection for people refusing / unable to pay).

Yes, that is how the property tax levy works in a vacuum. In reality, it's not logical that 50% would move overnight. People would start moving and property taxes would be cited as the reason, politicians would see this trend and lower the property tax levy to stop that bleeding.

In that sense, the property tax rate (and all taxes) do have a natural equilibrium. You can look at Oak Park real estate to see what happens when the property tax rate gets truly out of control.

One of the biggest first-half droops in the suburbs is in Oak Park. Home sales were down 22 percent in the first half of the year. The median sale prices of homes dropped almost 12 percent from a year ago, and homes are spending nearly 40 percent longer on the market than they did in the first six months of 2018.

Three Oak Park agents all said property taxes are a big factor. “It’s reached a breaking point where buyers realize their money goes farther in other areas,” said Laurie Christofano, an agent at Re/Max in the Village, in Oak Park. Homeowners in Oak Park are taxed nearly 12.7 percent of the taxable value of their property, according to the latest rates, released in June by Cook County Clerk Karen Yarbrough in late June. Christofano specifically mentioned buyers opting for LaGrange (where the tax rate is about 9.2 percent) and Western Springs (7.8 percent) over Oak Park.

This is all semantics at this point, but the state property tax pressure is clear. Pritzker announced a task force 2 days ago to attack this problem. My guess is they end up tying it to the graduated income tax by building in some sort of tax relief fund.

[jtown,man]

Taxes: I am not worried about taxes per se. I am worried about the unstable financial situation that could lead to higher and higher taxes which will eventually hurt the city.

Plenty of cities have budget issues(I can't think of one that doesn't every year), but Chicago's seems to be on the brink...and this could only mean one thing; increased taxes. If the city had a clamp on crime and the city was buzzing along fine high taxes might be fine. But it isn't, it still has some issues, so the question is where is all the money going?

I am almost certain NO has a higher crime rate and less areas like Chicago has of neighborhoods where crime is not an issue at all. Hence, one of the reasons its not my top destination. But just because it's not as bad as New Orleans, doesn't mean its not a huge issue. Didn't a hospital in Chicago have to turn people away recently because of the amount of people coming in with gun wounds? Theres a serious issue here.

"Chicago's crime rate isn't great, but it's typical for a big American city"

That depends on what we are calling a big city. NYC and LA are much safer cities. My frustration is that NYC went from like 2k murders a year(just one indicator, of course) in the 1990s to having 1/3rd the murders of Chicago while having 3xs the people. Chicago can do better.

I hope no one took my post as a ding at Chicago. Those are just my two fears of moving to the city. I think they are both justified beyond preception, don't yall? In any case, I hope I move there. I hope the city cuts its crime in half. I hope all the upper-class people moving in helps the budget issues. I hope for nothing but the best. Trust me, I wouldn't even consider the city if I thought it was hopeless.

[Handro]

Originally Posted by jtown,man

Taxes: I am not worried about taxes per se. I am worried about the unstable financial situation that could lead to higher and higher taxes which will eventually hurt the city.

Plenty of cities have budget issues(I can't think of one that doesn't every year), but Chicago's seems to be on the brink...and this could only mean one thing; increased taxes. If the city had a clamp on crime and the city was buzzing along fine high taxes might be fine. But it isn't, it still has some issues, so the question is where is all the money going?

I am almost certain NO has a higher crime rate and less areas like Chicago has of neighborhoods where crime is not an issue at all. Hence, one of the reasons its not my top destination. But just because it's not as bad as New Orleans, doesn't mean its not a huge issue. Didn't a hospital in Chicago have to turn people away recently because of the amount of people coming in with gun wounds? Theres a serious issue here.

"Chicago's crime rate isn't great, but it's typical for a big American city"

That depends on what we are calling a big city. NYC and LA are much safer cities. My frustration is that NYC went from like 2k murders a year(just one indicator, of course) in the 1990s to having 1/3rd the murders of Chicago while having 3xs the people. Chicago can do better.

I hope no one took my post as a ding at Chicago. Those are just my two fears of moving to the city. I think they are both justified beyond preception, don't yall? In any case, I hope I move there. I hope the city cuts its crime in half. I hope all the upper-class people moving in helps the budget issues. I hope for nothing but the best. Trust me, I wouldn't even consider the city if I thought it was hopeless.

The issue with taxes is concerning but context is key. Chicago is still has among the lowest COL of major cities in the US, despite having top 3-4 urban amenities (transit, walkability, etc.) That doesn't solve the budget issues the city has, but it does put the threat of higher taxes into perspective. I would say it is worthy of consideration, though, and yes justified beyond perception. There are glaring issues facing the city's budget with no easy fix.

The crime issue I do not believe is justified, however. Chicago has more crime than is good or acceptable, but that's just in comparison to the possibilities (i.e., what NY and LA have done with their crime problems in the past 30 years.) However, several other large, destination US cities have as high or higher violent crime rates than Chicago. I don't see many people online or in the media holding Houston or Washington DC up as examples of urban decay and lawlessness, despite those cities having higher rates of violent crime than Chicago. In fact, Houston and Washington are often cited as the future-bearers of urban growth in the US.

[jtown,man]

Originally Posted by Handro

The issue with taxes is concerning but context is key. Chicago is still has among the lowest COL of major cities in the US, despite having top 3-4 urban amenities (transit, walkability, etc.) That doesn't solve the budget issues the city has, but it does put the threat of higher taxes into perspective. I would say it is worthy of consideration, though, and yes justified beyond perception. There are glaring issues facing the city's budget with no easy fix.

The crime issue I do not believe is justified, however. Chicago has more crime than is good or acceptable, but that's just in comparison to the possibilities (i.e., what NY and LA have done with their crime problems in the past 30 years.) However, several other large, destination US cities have as high or higher violent crime rates than Chicago. I don't see many people online or in the media holding Houston or Washington DC up as examples of urban decay and lawlessness, despite those cities having higher rates of violent crime than Chicago. In fact, Houston and Washington are often cited as the future-bearers of urban growth in the US.

That's exactly the thing though, the COL in Chicago is extremely cheap compared to its peers in terms of jobs, urbanity, and other features you can find in other cities. However, if Chicago begins to lose that edge on affordability, it could be very bad for the city in terms of being attractive to outsiders. I did the math on what my situation would look like in NYC, me and the gf would be able to go carless, but even accounting for that we wouldn't make up the savings of living in Chicago. It's not that I think with increased property taxes etc. I think Chicago will become as expensive as LA, SF, or NYC, but I think every increase in the cost of living in Chicago does the city no favors, as its COL of currently one of the biggest selling points, at least to a person in my position.

[the urban politician]

Originally Posted by jtown,man

That's exactly the thing though, the COL in Chicago is extremely cheap compared to its peers in terms of jobs, urbanity, and other features you can find in other cities. However, if Chicago begins to lose that edge on affordability, it could be very bad for the city in terms of being attractive to outsiders. I did the math on what my situation would look like in NYC, me and the gf would be able to go carless, but even accounting for that we wouldn't make up the savings of living in Chicago. It's not that I think with increased property taxes etc. I think Chicago will become as expensive as LA, SF, or NYC, but I think every increase in the cost of living in Chicago does the city no favors, as its COL of currently one of the biggest selling points, at least to a person in my position.

Are you thinking about buying in Chicago? I ask because you seem quite concerned about property taxes. Why not rent? Yes, property tax increases get translated into higher rent (until the Socialists get their way and we have rent control), but that higher property tax is typically passed along among several tenants and incremental, so it's much more manageable.

And as others have said, there are still areas of Chicago where property taxes are quite affordable, as long as you're not hell bent on living in Bucktown or Lincoln Park. There are a lot of decent areas on the south side where you can get a lot for your buck, and aren't overrun by gangs and violence.

[Steely Dan]

Originally Posted by the urban politician

Why not rent?

my thought exactly.

jtown, why do you seem so hellbent on moving to chicago and buying property ASAP?

just rent for a while, get the lay of the land, and then if you feel like planting some longer term roots here, assess the property tax situation and either buy or don't buy.

for the stage of life that you're in, you'd be a fool to let potential future property tax increases preclude you from giving urban living in chicago a try.

it is a concern for those of us who have already planted roots here (especially those of us who own), but if you came here and rented for a while, that would all be future stuff for you to worry about, not a good reason not move here.

and while chicago property taxes are relatively high, what other 1st tier urban US city can you buy a 3 bed/3 bath 2,300 SF family-sized home in a good neighborhood with good schools for ~$400K? yeah, my property taxes may be ~$700 month, but my monthly mortgage payment is still just a fraction of what such a home would cost to own in urban NYC, SF, LA, DC, or Boston.

chicago and philly are really the only 1st tier urban bargains left in the US.

[jtown,man]

Originally Posted by the urban politician

Are you thinking about buying in Chicago? I ask because you seem quite concerned about property taxes. Why not rent? Yes, property tax increases get translated into higher rent (until the Socialists get their way and we have rent control), but that higher property tax is typically passed along among several tenants and incremental, so it's much more manageable.

And as others have said, there are still areas of Chicago where property taxes are quite affordable, as long as you're not hell bent on living in Bucktown or Lincoln Park. There are a lot of decent areas on the south side where you can get a lot for your buck, and aren't overrun by gangs and violence.

At my age I don't want to move anymore. So eventually(saving up now) I would like to buy. But I will be renting first, yes. My concerns, from the start, have been where is Chicago heading, not necessarily where it is(when it comes to taxes anyways). Currently, the taxes are high, but the value certainly is still there. I just don't know what it will look like in 5 years.

Yeah, we've been looking all over the city. Condos(not in 3-flats) seem to have really high HOA fees(stunned us) so we would like a smaller building in a safe, yet not entirely gentrified hood. Of course thats at least 2 years away, so we'll see.

[jtown,man]

Originally Posted by Steely Dan

my thought exactly.

jtown, why do you seem so hellbent on moving to chicago and buying property ASAP?

just rent for a while, get the lay of the land, and then if you feel like planting some longer term roots here, assess the property tax situation and either buy or don't buy.

for the stage of life that you're in, you'd be a fool to let potential future property tax increases preclude you from giving urban living in chicago a try.

it is a concern for those of us who have already planted roots here (especially those of us who own), but if you came here and rented for a while, that would all be future stuff for you to worry about, not a good reason not move here.

and while chicago property taxes are relatively high, what other 1st tier urban US city can you buy a 3 bed/3 bath 2,300 SF family-sized home in a good neighborhood with good schools for ~$400K? yeah, my property taxes may be ~$700 month, but my monthly mortgage payment is still just a fraction of what such a home would cost to own in urban NYC, SF, LA, DC, or Boston.

chicago and philly are really the only 1st tier urban bargains left in the US.

See my above comment. I plan on renting but I am at that age where I am ready to buy. The current taxes/crime won't keep me away lol but I didn't know what the trajectory looks like and honestly I don't want to move again.

You're right. The value is certainly there today. Theres no way around that.

[Chisouthside]

Originally Posted by jtown,man

At my age I don't want to move anymore. So eventually(saving up now) I would like to buy. But I will be renting first, yes. My concerns, from the start, have been where is Chicago heading, not necessarily where it is(when it comes to taxes anyways). Currently, the taxes are high, but the value certainly is still there. I just don't know what it will look like in 5 years.

Yeah, we've been looking all over the city. Condos(not in 3-flats) seem to have really high HOA fees(stunned us) so we would like a smaller building in a safe, yet not entirely gentrified hood. Of course thats at least 2 years away, so we'll see.

Given the current geography of the city, Chicago can probably take in another half million people before things even start to get to California levels of cost of living.

[Steely Dan]

Originally Posted by jtown,man

Condos(not in 3-flats) seem to have really high HOA fees(stunned us) so we would like a smaller building in a safe, yet not entirely gentrified hood.

very true.

elevators, pools, 24-hr doormen, maintenance/landscape staff, office staff, fitness rooms, party rooms, etc. cost a lot, even when divided among 100+ units.

by comparison, a 3-flat condo association really only has to pay building insurance, water/sewer/garbage, a negligible electric bill, and sock money away into reserves for periodic roof and tuckpoint repair.

for example, our association fee for our 2,300 SF home in a 3-flat in lincoln square is $350/month. my association fee for my 500 SF studio condo downtown in marina city is $320/month (and marina city is a relative HOA bargain compared to newer full-amenity downtown condo towers). that's a pretty big difference on a PSF basis, and that's compared to one of the absolute cheapest big downtown condo towers.



in any event, i think you're overthinking this. is the pension/tax situation in chicago/illinois going to continue to be an issue? yes. will it spell doom for the city until it empties out detroit-style and those left will be on the hook for $100K annual property tax bills? no. chicago is too much of a center of gravity for that, something will eventually give.

as for the crime issue, you're WAY overthinking that. are you a young black male engaged in the gang/drug underworld? do you sell or purchase illegal narcotics? do you associate with gang-members in any fashion? do you frequently visit and hangout in known gang activity hot-spots?

if you answered "no" to all of those questions, the chances of chicago's atrocious levels of street gang violence directly affecting you are actually pretty damn low in the grand scheme of things. i'm not saying it can't ever happen, but it's definitely not something that keeps me up at night, and i've actively chosen to raise my family in the city.

[moorhosj]

Originally Posted by Stockerzzz

The "natural equilibrium" was that the Oak Park levy rose 3% in December.



The residents of Oak Park complained and complained. Oak Park cut $700k and then increased the levies by 3%.

And now will be the next part of the process where we see if the city cuts more to lower the levy and find equilibrium. I'm not sure why this concept is so complicated.

[sukwoo]

Originally Posted by Stockerzzz

The "natural equilibrium" was that the Oak Park levy rose 3% in December.



The residents of Oak Park complained and complained. Oak Park cut $700k and then increased the levies by 3%.

Its not the village levy that's the big issue, it's the school system(s). D97 (K-8) had a successful referendum recently that resulted in a 10% levy increase. In the most recent tax bill, D97 accounts for about 40% of the total Oak Park tax levy, D200 (the high school) is somewhere around 27%, while the village comprises somewhere around 18%. The library district, park district, and township comprise the remainder of the tax levy.

[jtown,man]

Originally Posted by Steely Dan

very true.

elevators, pools, 24-hr doormen, maintenance/landscape staff, office staff, fitness rooms, party rooms, etc. cost a lot, even when divided among 100+ units.

by comparison, a 3-flat condo association really only has to pay building insurance, water/sewer/garbage, a negligible electric bill, and sock money away into reserves for periodic roof and tuckpoint repair.

for example, our association fee for our 2,300 SF home in a 3-flat in lincoln square is $350/month. my association fee for my 500 SF studio condo downtown in marina city is $320/month (and marina city is a relative HOA bargain compared to newer full-amenity downtown condo towers). that's a pretty big difference on a PSF basis, and that's compared to one of the absolute cheapest big downtown condo towers.



in any event, i think you're overthinking this. is the pension/tax situation in chicago/illinois going to continue to be an issue? yes. will it spell doom for the city until it empties out detroit-style and those left will be on the hook for $100K annual property tax bills? no. chicago is too much of a center of gravity for that, something will eventually give.

as for the crime issue, you're WAY overthinking that. are you a young black male engaged in the gang/drug underworld? do you sell or purchase illegal narcotics? do you associate with gang-members in any fashion? do you frequently visit and hangout in known gang activity hot-spots?

if you answered "no" to all of those questions, the chances of chicago's atrocious levels of street gang violence directly affecting you are actually pretty damn low in the grand scheme of things. i'm not saying it can't ever happen, but it's definitely not something that keeps me up at night, and i've actively chosen to raise my family in the city.

No, I am as square as they come lol good point.

Jesus, that is *very* inexpensive for your HOA for how much square footage you have. I would never take advantage of any of that other crap anyways.

Yes, I am overthinking things, without a doubt. But I've never been in the position to pick a city and stick with it because of my past life and events I couldn't control, so I want to make sure I make the best possible choice possible.

[ardecila]

Originally Posted by jtown,man

Condos(not in 3-flats) seem to have really high HOA fees(stunned us) so we would like a smaller building in a safe, yet not entirely gentrified hood. Of course thats at least 2 years away, so we'll see.

There isn't a whole ton of condo inventory in "not entirely gentrified" neighborhoods. The bulk of the city's condos are concentrated in fully-gentrified neighborhoods on the North Side where property taxes and COL will be high. The last 10 years of booming growth have brought very few new condos on the market and actually removed quite a bit of condos through deconversions (see River City). Developers who sat on a bunch of inventory through the rough years either started renting out the units and making a killing, or sold to investors who are doing the same.

That being said, you should look at the area just west of United Center... new Green Line station at Damen will be opening around 2 years from now, and it still has a lot of small pre-recession condo buildings with good deals.