Cook County assessor fixing hundreds of misclassified properties

This story is a collaboration between the Illinois Answers Project and the Chicago Tribune.

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Nearly half a billion dollars in taxable real estate value has been added onto the Cook County rolls after the county assessor fixed hundreds of mistakes identified in an investigation by the Illinois Answers Project and Chicago Tribune.

The corrections come as Cook County Assessor Fritz Kaegi’s office in recent months audited key records tied to thousands of properties across the county following last August’s report, which found the office had misclassified and undervalued properties by missing new construction and significant property improvements.

In all, using publicly available sales and satellite data, the Tribune and Illinois Answers found the office had failed to accurately assess at least 620 new or renovated properties during the 2023 tax year. In some instances, Kaegi’s office assessed mansions as vacant lots and missed the bulk of two new subdivisions in a far south suburb.

Kaegi’s office has downplayed the findings as a small portion of the county’s overall tax base that would have little effect on other homeowners’ bills. Still, his office moved forward with the internal audit that eventually revealed even more properties were improperly classified, though his office will not say how many. In the past several months, the assessor has also hired or promoted staffers — including the top official overseeing data integrity — and sharpened office processes that previously resulted in inaccurate tax bills and hundreds of millions of dollars in missed value that should have been taxed.

“These changes are central to our ongoing work to modernize our operations, make our own work more efficient, and ensure that the property tax system is fair and accessible for all Cook County residents,” assessor’s office spokesperson Christian Belanger wrote in a statement Thursday.

While Kaegi’s office declined to provide details on the audit results, records show his office fixed 491 of the 620 properties identified by Illinois Answers and the Tribune as being misclassified.

That still leaves 129 identified errors that were not yet fixed as of last week, seven months after officials were informed of them. The assessor’s office said it’s waiting on fixes from the Cook County Board of Review to remedy most of the rest. Kaegi’s changes face some hurdles outside his control, including spotty cooperation from local governments and a tight taxing schedule that can delay fixes by months.

But the moves suggest Kaegi is working to prioritize a systemic issue that his administration has been aware of since he took office but that his senior staffers have acknowledged was on the back burner.

The problem has wide implications: Properties that are dramatically underassessed unfairly spread the tax burden onto everyone else. They deprive smaller units of government from being able to collect the property taxes they’re due. And when the problems are fixed, the assessor can charge up to three years in back taxes at once, sending massive bills to unsuspecting homeowners who had been paying their bills and may not have been aware they were being underassessed.

Last year’s nine-month investigation from the Tribune and Illinois Answers conservatively estimated the new or renovated properties the assessor’s office missed were worth $444 million. Most properties identified in the publications’ joint investigation were either incorrectly recorded as vacant or as being smaller than they actually are.

The 491 updated assessments added roughly $489 million in taxable property value to the rolls in 2024, which is equal to about 17% of all the new value added from construction countywide in 2023.

“This problem of catching new construction has been a historic problem in the office — the solution for it is hard,” Scott Smith, Kaegi’s chief of staff, said in an interview last month. “It involves people, process, technology, and it wasn’t something you could solve within our first year.”

He added that fixes would not have been possible until after the office overhauled its tech systems in 2021.

Kaegi was elected assessor in 2018.

Though the solutions to misclassifications might be varied, the problem mostly revolves around permits.

Permits for demolitions, new construction or significant renovations should trigger the assessor’s office to take a fresh look at those properties.

After the Tribune and Illinois Answers investigation was published, Kaegi’s office said it audited 27,000 permit records, most from the last three years, to see whether they had been treated properly. Smith said most permits were properly logged.

“We picked up some things that we think we might not otherwise have,” Smith said. He declined to say how many properties’ assessments were changed due to the audit, saying more in-person checks are needed.

In hundreds of cases, Kaegi’s office had construction permit records on file for the homes or businesses but failed to follow up or modify assessments with the new information. In others, municipalities shirked their legal requirement to share permit data with Kaegi’s office or shared it in a format that required time-consuming cleanup.

Even after the audit and the office’s changes, records show the 129 inaccurate assessments from 2023 haven’t been fixed.

Officials in the assessor’s office chalked up most of those mistakes to quirks in the calendar that made it too late to change assessments for the 2024 tax year by the time Illinois Answers and the Tribune shared their findings. Kaegi’s staffers said they appealed to the Board of Review to update about 110 of the miscategorized properties, and those fixes are still pending.

They include the house owned by Skylar Damiano, who tried for more than a year to get his new, four-bedroom farmhouse-style home in Humboldt Park accurately valued. The assessor still classifies Damiano’s home as a side lot worth about $44,000, even though records show the office had recorded both the construction permit from August 2021 and proof the home was sold in June 2022 for more than $840,000.

Damiano contacted his real estate agent, the assessor’s office and his alderman in 2023 to get the issue corrected, worrying he could get hit with a massive back tax bill. Damiano said he even messaged Kaegi on LinkedIn to resolve the issue. Kaegi referred him to Smith.

“Nothing has happened and my assessment is still very, very low,” Damiano wrote last month in an email to Illinois Answers and the Tribune.

A Kaegi spokesman said the office tried to appeal to the Board of Review to change Damiano’s assessment but the request was denied, so the assessor will update his valuation later this year. After Illinois Answers and Tribune followed up with the assessor, Smith contacted Damiano and informed him there would be no back taxes.

“I am happy that I will now, finally, be able and allowed to contribute back to the city I love, via taxes, in a fair and equitable manner,” Damiano wrote last week in an email.

Where the permit system may fail, Kaegi plans this year to hire an additional team to hunt down fishy transactions — like multimillion-dollar sales on properties the office has categorized as vacant — to identify and patch holes in the office’s databases. Officials said they hope to launch the three-member “sales validation team” by the end of the year.

Kaegi’s efforts to bring those assessments up to date are also hitting some property owners with back tax bills that are, in some cases, staggering.

So far this year, the Cook County treasurer’s office has mailed $5.2 million in bills to 55 taxpayers to rectify mistakes by the assessor’s office that were revealed by the investigation. Those bills come on top of increased assessments that will surely spur higher bills this year.

State law precludes the assessor from charging back taxes in cases where the office had permits or other evidence of construction on file but failed to factor that into valuations.