CHICAGO | General Discussions

[twister244]

Let's just be real for a second....

If property taxes and a stable local government were dictating factors that determined whether someone would live in a city, Chicago would not be the 3rd largest city in the country with a massive economy.....

Many of us are here for jobs... and we love the city. Was my decision to purchase a condo in Chicago the most financially efficient decision from an investment perspective? Maybe not, but I now have access to a city that eclipses so much that any other place I have lived offered. That's me. For someone like IIRC, they obviously don't value city life as much as some of us, so it's an easier decision to pack up and leave. Many others (and companies) clearly disagree though, and continue to invest here for various reasons.

Yes, Chicago and Illinois absolutely need to work on addressing the issues it has, no doubt. But not let's pretend the city is on the verge of complete collapse at any given second. Yes my opinion is heavily biased, but that's because I love Chicago and I want to see it succeed in the long term.

Also - For all the talk of high property taxes, the grass isn't greener on the other side.... My place I just purchased in Logan Square would be much pricier in Denver, and out of my reach even with lower taxes. Denver has become a great example of how the affordability pendulum can swing violently for completely opposite reasons. Yeah, they have low property taxes, but limited supply and massive demand have pushed prices to incredible levels for a city of that size. Go the the coastal cities and you have high prices there too.... with higher taxes.

[the urban politician]

I want to clarify that there seems to be a misunderstanding in our discussion:

I and IIC aren’t complaining about property taxes being high

We are complaining about them being unbelievably unstable. There is something seriously wrong when your tax bill doubles (or more) in one year.

Stability is one of the necessary prerequisites to encourage investment. When you don’t have stability, investors don’t know what assumptions to make. How do you budget out your future balance sheet to prepare for the future? How much do you set aside for a roof repair (or just skip it altogether) knowing full well that the city can just drop a shitbomb tax bill on you next year for no good reason?

This is what is drawing so much criticism and ire from so many. There has to be stability. Fine, let the tax bills go up, but do it incrementally like everything else.

Also, property taxes should be based on ability to pay, like an income tax. If my home’s value doubled that doesn’t mean that I suddenly have double the income, thus my bill should be doubled. It’s a stupid way to tax the citizenry. Again, I prefer California’s approach and I would accept a higher income tax in return for more sanity with property taxation.

[SIGSEGV]

Originally Posted by the urban politician

I want to clarify that there seems to be a misunderstanding in our discussion:

I and IIC aren’t complaining about property taxes being high

We are complaining about them being unbelievably unstable. There is something seriously wrong when your tax bill doubles (or more) in one year.

Stability is one of the necessary prerequisites to encourage investment. When you don’t have stability, investors don’t know what assumptions to make. How do you budget out your future balance sheet to prepare for the future? How much do you set aside for a roof repair (or just skip it altogether) knowing full well that the city can just drop a shitbomb tax bill on you next year for no good reason?

This is what is drawing so much criticism and ire from so many. There has to be stability. Fine, let the tax bills go up, but do it incrementally like everything else.

Also, property taxes should be based on ability to pay, like an income tax. If my home’s value doubled that doesn’t mean that I suddenly have double the income, thus my bill should be doubled. It’s a stupid way to tax the citizenry. Again, I prefer California’s approach and I would accept a higher income tax in return for more sanity with property taxation.

Isn't the instability caused by systematic historic underassesment of properties compared to fair market prices though? This is what Kaegi is supposedly trying to fix, but obviously it sucks for people who were getting a good deal before (at the cost of other people having to pay more than their fair share). Obviously if your place is assessed much higher than a fair market value, then that's a problem (and is what the appeals process is supposed to address, rather than it being a means for corrupt pols to pad their pockets).

My condo's tax assessment is within 5% of what I paid for it so I doubt it's possible for my property taxes to double randomly, though I suppose if I had tried to find a place that was significantly underassesed it could (but I shouldn't be that surprised, in that case).

[BrinChi]

Originally Posted by the urban politician

I’m sure I’m wasting my time, but the issue is fairness.

People and businesses make assumptions for the future with their pocketbooks and budgets.

Yes, things like taxes and fees can go up incrementally over time. But to double property tax in or two years and then label it as, “Ha ha you’re now paying your fair share!” isnt in any way just. Government shouldn’t be conducting matters in this way. They pay lip service to fairness (affordable housing!) and then their actions are the complete opposite.

Thanks for wasting your time on me. I would agree a doubling property tax in two years would be unjust, but I didn't see any example of this provided. Look you're preaching to the choir, I have no illusions that our government is really prioritizing fairness or pursuing the most efficient policies for affordable housing. I'm no bernie bro. But our local financial situation has gotten serious enough that they're squeezing every dollar they can out of those who can most afford to pay, and sometimes even from those who can't afford to pay (hence our demographic shifts). I put up with it because it continues to work for me and my family. Simple as that. And I also have no tears for anyone living in a $1 million plus home. If you like living in Chicago but you hate taxes, there's a very easy way to reduce your tax burden and it's called downsizing. And of course we should also get involved, vote, and promote smarter, less wasteful policy toward a better future.

[the urban politician]

^ Examples have been provided. Once again, I am not going to give PIN numbers, nor is IIC or others, for our properties. At some point we need to get past the “It didn’t happen to me so it never happens” and believe what people are claiming, or else there is no point in discussing this further.

[jtown,man]

I just priced a Uhaul from Chicago to Nashville.

The Uhual is nearly DOUBLE the price for the Chicago to Nashville trip vs. a Nashville to Chicago trip.


The market is telling us which areas are hot and which are not.

[moorhosj1]

Originally Posted by the urban politician

At some point we need to get past the “It didn’t happen to me so it never happens” and believe what people are claiming, or else there is no point in discussing this further.

It’s a two-way street, the same grace should be shown to all. I’m not sure that calling people “ignorant” or “waste of time” helps build that trust.

[jtown,man]

Originally Posted by the urban politician

I want to clarify that there seems to be a misunderstanding in our discussion:

I and IIC aren’t complaining about property taxes being high

We are complaining about them being unbelievably unstable. There is something seriously wrong when your tax bill doubles (or more) in one year.

Stability is one of the necessary prerequisites to encourage investment. When you don’t have stability, investors don’t know what assumptions to make. How do you budget out your future balance sheet to prepare for the future? How much do you set aside for a roof repair (or just skip it altogether) knowing full well that the city can just drop a shitbomb tax bill on you next year for no good reason?

This is what is drawing so much criticism and ire from so many. There has to be stability. Fine, let the tax bills go up, but do it incrementally like everything else.

Also, property taxes should be based on ability to pay, like an income tax. If my home’s value doubled that doesn’t mean that I suddenly have double the income, thus my bill should be doubled. It’s a stupid way to tax the citizenry. Again, I prefer California’s approach and I would accept a higher income tax in return for more sanity with property taxation.

This is a huge issue when it comes to gentrification.

We all blame greedy developers etc., but when we are talking about owner-occupied homes, we can only blame the government who doesn't give a damn if the person in a home just moved in and have a combined income of 200,000 or if a little ole grandma lives in a home she bought in 1980.

[OrdoSeclorum]

Originally Posted by jtown,man

I just priced a Uhaul from Chicago to Nashville.

The Uhual is nearly DOUBLE the price for the Chicago to Nashville trip vs. a Nashville to Chicago trip.


The market is telling us which areas are hot and which are not.

From 2010 to 2019 Chicago proper gained 50,000 people and metro Nashville about 65,000.

I believe the sprawl outside of Chicago lost residents over that period and the sprawl outside Nashville is responsible for most of the area's growth. It certainly tracks that people whose main priority is to avoid paying taxes and fees would move someplace without sidewalks.

[twister244]

Originally Posted by OrdoSeclorum

From 2010 to 2019 Chicago proper gained 50,000 people and metro Nashville about 65,000.

I believe the sprawl outside of Chicago lost residents over that period and the sprawl outside Nashville is responsible for most of the area's growth. It certainly tracks that people whose main priority is to avoid paying taxes and fees would move someplace without sidewalks.

I'm going to repeat what I said earlier.... Don't just assume the grass is greener on the other side. I feel like a lot of people in Chicago are still stuck in this 2010 attitude that it's way more expensive compared to these "hot" cities, even after taxes. What's happened over the last five years is for many of these cities (Denver, Austin, etc), their real estate has gone through the roof. Yes, taxes are much lower, but at some point, you have to look at what you get for $400/$500/$600k and say - Nope. When I was still in Denver, I had thought about maybe getting a second place there, but prices just blew past my range I could afford for what I wanted.

If the city/state can offer some stability on the tax front (as TUP stated), I could see the tide turning back towards gains here in the next decade. These cities just can't keep going up forever without some sort of tipping point for folks.

[marothisu]

Originally Posted by OrdoSeclorum

From 2010 to 2019 Chicago proper gained 50,000 people and metro Nashville about 65,000.

I believe the sprawl outside of Chicago lost residents over that period and the sprawl outside Nashville is responsible for most of the area's growth. It certainly tracks that people whose main priority is to avoid paying taxes and fees would move someplace without sidewalks.

Chicago MSA grew by 150,000+ people. The city grew by about 51,000 people. The "sprawl" outside of the city didn't lose population. It gained around 100K people.

[marothisu]

Originally Posted by twister244

I'm going to repeat what I said earlier.... Don't just assume the grass is greener on the other side. I feel like a lot of people in Chicago are still stuck in this 2010 attitude that it's way more expensive compared to these "hot" cities, even after taxes. What's happened over the last five years is for many of these cities (Denver, Austin, etc), their real estate has gone through the roof. Yes, taxes are much lower, but at some point, you have to look at what you get for $400/$500/$600k and say - Nope. When I was still in Denver, I had thought about maybe getting a second place there, but prices just blew past my range I could afford for what I wanted.

If the city/state can offer some stability on the tax front (as TUP stated), I could see the tide turning back towards gains here in the next decade. These cities just can't keep going up forever without some sort of tipping point for folks.

I agree with everything here and (I think) your previous message. In my original response on this topic I talked about housing prices, what your standards are, etc. We moved from NYC back to Chicago because we wanted to live somewhere nice and not have to go above $1M (or barely above it) for that nice 3+ bedroom and nor have to go to the suburbs (my wife doesn't drive). Pretty much impossible in NYC nowadays and an awesome opportunity opened up in my org in Chicago that would allow me to possibly get promoted faster than staying in my role in NYC. So in our case, the reduction in income tax and housing prices vastly outweighed the property tax reality for our particular situation. I could have maybe had an opportunity in Dallas, but it doesn't align with the lifestyle that we want (more urban, walkable, public transit, etc).


I do agree about the mentality. Interestingly in NYC, when they were telling people that the city was losing people now, all the online comments seemed to shift literally overnight from positive to negative about the city. People seemed to be really swayed by this stuff even though the situation was way more complex than that. It reminded me of Chicago in 2010 or 2011 and going forward. Then last summer we found out Chicago actually gained population and some people started to shift their opinions magically while others kind of doubled down or just disregarded the news entirely. These cities have so much to offer and a lot of people fail to see almost any positives.

There's no such thing as a perfect city and really the more people you have the more issues there's going to be. Some cities like Chicago have some serious issues (crime, property tax issues, etc) but it's still beneficial for many to move here.

With that being said, each situation is different. I don't think that every situation warrants a blanket statement. It may be good or beneficial for.some people to move to/live here while it may not be for others. You can apply this to any place. Just as an example, maybe someone who is car free lives here but moving to Texas may require them to purchase a car or 2. Perhaps the increase in that cost alone offsets the income tax difference and perhaps the price of housing they're looking at is similar to here (yes, that is more than possible believe it or not in some areas). But maybe some other household in a similar situation has those cars already and maybe owns them outright. Perhaps they can get a cheaper home there and thus maybe for them it doesn't really offset anything like the other household's situation and it makes sense to move. It's just an example but there's so many factors into how much money you spend per month/year and in many years cases it even goes beyond taxes (like the example above).

What's happening in some other cities isn't necessarily healthy. Especially the small ones like Boise. It's just pricing out the residents faster from getting into the market or people who were almost ready to buy. It reminds me a little of what my wife described in China like 15 years ago in the big cities. Her parents had bought 2 condos for maybe $200K cash there total - one was way on the outskirts of Shanghai (that's super far away) and one was 10 minutes away from the end of a city train line. Neither were the BEST locations but feasible. Their parents' friends though didn't want to pull the trigger and kept saying they were saving so they could afford something in an even better area location wise. Well, the prices went up there so fast that they were priced out in the matter of just a few months. Some of them took a decade to even be able to save money to afford that. Some of them have not even been able to purchase it to this day because that's how drastically fast things increased.

[VKChaz]

Originally Posted by OrdoSeclorum

From 2010 to 2019 Chicago proper gained 50,000 people and metro Nashville about 65,000.

I believe the sprawl outside of Chicago lost residents over that period and the sprawl outside Nashville is responsible for most of the area's growth. It certainly tracks that people whose main priority is to avoid paying taxes and fees would move someplace without sidewalks.

Depends what boundaries you are looking at or how to get a sense of sprawl, but Nashville MSA grew by over 300,000 the last decade
Wikipedia displays census count history
https://en.wikipedia.org/wiki/Nashvi...ropolitan_area

[OrdoSeclorum]

Originally Posted by VKChaz

Depends what boundaries you are looking at, but Nashville MSA grew by over 300,000 the last decade
Wikipedia displays census count history
https://en.wikipedia.org/wiki/Nashvi...ropolitan_area

I agree that matters from a jobs and resources point of view. But the Nashville MSA is about 15% of the whole state. It's good for Chicago if Rockford or Joliet are growing and healthy, but moving to Racine doesn't count at "moving to Chicago" in most of the ways we care about in discussions here and it's the same for Nashville, imo.

[jtown,man]

Originally Posted by OrdoSeclorum

From 2010 to 2019 Chicago proper gained 50,000 people and metro Nashville about 65,000.

I believe the sprawl outside of Chicago lost residents over that period and the sprawl outside Nashville is responsible for most of the area's growth. It certainly tracks that people whose main priority is to avoid paying taxes and fees would move someplace without sidewalks.

Can we stop the strawman?

It's been said many times here, but let me repeat:

Its not that we have the second-highest property taxes in the country, its that we have the second-highest property taxes and have leaders who waste our money. If the city and state were ran fabulously, the taxes wouldn't be an issue, it would be the simple price to pay for the privilege of living here. However, we are getting shit in comparison to what we pay in taxes.

[jtown,man]

Originally Posted by twister244

I'm going to repeat what I said earlier.... Don't just assume the grass is greener on the other side. I feel like a lot of people in Chicago are still stuck in this 2010 attitude that it's way more expensive compared to these "hot" cities, even after taxes. What's happened over the last five years is for many of these cities (Denver, Austin, etc), their real estate has gone through the roof. Yes, taxes are much lower, but at some point, you have to look at what you get for $400/$500/$600k and say - Nope. When I was still in Denver, I had thought about maybe getting a second place there, but prices just blew past my range I could afford for what I wanted.

If the city/state can offer some stability on the tax front (as TUP stated), I could see the tide turning back towards gains here in the next decade. These cities just can't keep going up forever without some sort of tipping point for folks.

Great point. "Urban" Nashville will cost me more than actual urban Chicago. No way around that. However, buying a typical suburban home in the Nashville metro vs Chicago's probably isn't too different. And while you might pay slightly more for homes in Nashville, your RE taxes will be drastically lower and you have no income taxes.


I will note that buying a home that is more expensive will also sell for a higher price. A high property tax will never be made up in a sale. It simply is throwing money away. A more expensive home makes up for the added monthly cost by selling for more when you put it on the market, a homeowner with high property taxes isn't rewarded for their monthly contributions come selling time.


Anyways, the cost of housing (certainly "urban") may be more in Nashville. But there is no income tax, lower property taxes, lower gas taxes, car registration/taxes, and lower sales tax, all which add up to savings at the end of the day.


Example:

A family makes 100,000 and lives in a median-priced home for their respective city:

Nashville Home: 404,000
Chicago Home : 324,000

So roughly 80,000 dollars cheaper in Chicago.


According to Zillow, a mortgage with taxes (not insurance and I kept the standard downpayment settings etc.) would be:

324,000 Chicago home: 1,778 a month
404,000 Nashville home: 1,798


So you can buy 80,000 dollars more home for essentially the same price in Nashville vs. Chicago. But then we have income taxes:


Chicago family: 4,900
Nashville family: 0

I found a number of 13,500 for the average miles driven per car in the US. With that number in mind (average of 25 mpg):

A year of driving in Chicago would cost you 210 dollars in gas taxes
A year of driving in Nashville would cost you 145 dollars in gas taxes


So between a home, gas, and income, we end up with 4,500 more dollars for a family making 100,000 dollars, living in the median-priced home, and driving the US average.


Renewing your car tag is 29 dollars in Tennessee, its something like 150 in Illinois.


These things add up.

[Handro]

Yea, it's crazy that some places are more expensive than others. Did you know that you can buy a mansion in Bedford, Indiana for the price of a small apartment in Manhattan? Totally wild stuff and clearly a sign of.... something?

[Steely Dan]

Originally Posted by jtown,man

I found a number of 13,500 for the average miles driven per car in the US. With that number in mind (average of 25 mpg):

A year of driving in Chicago would cost you 210 dollars in gas taxes
A year of driving in Nashville would cost you 145 dollars in gas taxes

we do about half that mileage per year.

and we only have one car for a family of 4.

real cities don't force their citizens to drive everywhere.

but if you wanna move to nashville..... be my guest.

[marothisu]

Originally Posted by jtown,man

These things add up.

They do, but so too do other things outside of taxes remember. For example, if you didn't need a car here and took public transit/biked, walked and took a few ubers a month then you have to weigh the cost of getting a car+insurance+gas in a separate location you move to that requires it. Someone buying even a $26K Honda Accord and financing through a lease or loan for 72 months could easily be spending the same as the difference in income taxes in your example for a car payment+gas+insurance. These things always have to be considered. But again, if they already have a car and don't have to add a new one because of the move, then perhaps it's not even a factor in their move.

Taxes are always one part of the equation, but not 100% of the equation entirely. Each situation is different too. Some people it makes sense to live in Chicago or other parts of Illinois while others it doesn't. For example, career progression and prospects differ per location. There are some industries that frankly will lead to better career progression for people for various locations vs. others. From my industry, it doesn't even make sense to live in a lot of locations (even remotely) these days.

But that's just me - again... every situation is different and I am of the opinion based on my own anecdotes of my friends moving all over the place (no, not from Chicago - just in general from one place to another) that people are really terrible at calculating the entire costs/opportunity costs of these things (i.e. the transportation example above). Somehow people only consider what they'll pay in taxes, most likely because it's fairly simple to calculate. I don't know why but a lot of people don't go beyond that into the actual costs of everything from gas to food and if they have to make a lifestyle change after the move which could lead to other costs (i.e. getting a car if you didn't already have one).

[moorhosj1]

Originally Posted by jtown,man

324,000 Chicago home: 1,778 a month
404,000 Nashville home: 1,798


So you can buy 80,000 dollars more home for essentially the same price in Nashville vs. Chicago. But then we have income taxes:

These things add up.

The same price? did you forget the $16k more you need for the down payment.

This also highlights the potential damaging impact of interest rate hikes in our near future.