After a flap about alleged unfair assessment values of Cook County homes, Assessor Joseph Berrios, and his team, faced academics who helped design a new methodology meant to make property assessment more fair.
Berrios spent two hours before the Cook County Board July 18 and announced that his office had quietly abandoned MacArthur Foundation-funded tools created in 2011-12. He and his aides dug in as they pushed back against a June Chicago Tribune series claiming the county’s method overvalued properties in low-income areas and undervalued properties in high-income areas.
“You can’t always believe what you read or hear and there are two sides to every story,” said Tom Shaer, the Assessor’s Office director of communications. Shaer said the office had announced that they were using the MacArthur-funded system in 2015 but quietly abandoned it without an announcement to avoid “embarrassment for anybody.”
But two men who helped create the new model, a University of Chicago Public Policy professor and a consulting company expert, asserted the Tribune’s narrative was correct and begged the board to demand the assessor’s process be more transparent and work to fix disparities.
At issue was a measure of “regressivity,” where homes or businesses in poor neighborhoods and suburbs were assessed higher than their actual potential sale value.
University of Chicago Professor Christopher Berry said five independent studies showed that Cook County systematically assessed less expensive homes at higher levels than more expensive homes. This led to minority neighborhoods being disproportionately “overassessed and overtaxed,” Berry said, which was a form of “institutional racism.”
Assessment values are measured by a “sales ratio” comparing the sales price to the assessed value at the time of the sale, Berry explained in a handout. Between 2011-15 Cook County assessments on average were around 11.4 percent on a $100,000 home but around 7.8 percent on a $1 million home. The assessments should be around 10 percent of a home’s potential or actual sale value.
Veronica Villasenor of the Brighton Park Neighborhood Council gave an example. She said a woman in the Little Village neighborhood could not understand why her house was assessed at such a high level. “Her house at 23rd [Street] and Drake [Avenue] was valued by the assessor at more over $230,000 when that house could never be sold for more than $140,000. Tell me, how is that fair,” Villasenor asked.
Between 2010-15, the MacArthur Foundation provided $300,000 in funds to the University of Chicago and the Assessor’s Office to create a new computer model for the county. The county agreed to use the model, and even trained their staff to use it. But a 2017 Tribune data analysis of more than 2 million records obtained via the Freedom of Information Act showed the model was not being used.
Berrios attacked the report and model, dubbed Probit, in a June press release. “Probit has proven highly unreliable,” Berrios said.
Berrios’s staff criticized the Tribune’s analysis as being completed by unqualified assessors. They claimed the Tribune’s analysis used estate sales, which threw off sales values. Assessor staff described a complicated computer-aided “mass appraisal” system that used 35 different elements to assess 1.5 million parcels every three years based on elements such as location, square footage and number of fireplaces. Anomalies that stick out are “hand checked,” they said. Property tax appeals help the system police itself.
Staff pointed the finger for an undervalued and disorganized system at Berrios’ predecessor James Houlihan.
The 2008 real estate crash, which caused 8.5 million U.S. foreclosures, made things harder said Tom Jaconetty, deputy assessor of valuations and appeals.
“An episodic dysfunctional market bouncing around like a ping-pong ball was an enormous challenge,” he said. Staff said assessing properties was an inexact science with “moving targets.”
But Berry and Robert Weisbourd, of RW Ventures, said the system was out of whack and flawed.
“This is not a matter of all systems are regressive and it’s part of normal business,” said Berry. “Five independent studies show the regresivity is well beyond acceptable levels [in Cook County].”
Weisbourd said the system was opaque and deliberately confusing and called for transparency. He said he had worked with staff members who seemed to want to be fair and do a good job, but “senior people in the Assessor’s Office do not seem to care about the truth or the taxpayers,” Weisbourd told the board. “You need to think about whether the assessor will reliably follow through on any new reforms.”
Members of the Cook County Board Finance Committee were deferential to Berrios, who heads the Cook County Democratic Party, allocating foot-soldiers at election time.
“I want to ask the question, are poor people getting shafted?” said Commissioner Chuy Garcia. “I feel a personal sense of responsibility to the working class communities if there is an overassessed tax burden in Chicagoland.”
Richard Boykin thanked Berrios for being willing to work with the board to address the problem.
“It’s incumbent upon [board members] and the public to demand fairness and equity as it relates to property evaluation,” Boykin said later. “We want to make sure our working class people are not paying more than they should in property taxes. The key is that everybody pays their fair share and there’s equity in the system.”
Deborah Sims said she knew assessing homes was not an exact science. “I’ve known you for 35 years and I don’t think your intent is to hurt any community,” she told Berrios.
After the hearing, Cook County Board President Toni Preckwinkle announced that the Civic Consulting Alliance, a pro-bono consulting network, would be conducting an independent third party review of how the Assessor’s Office worked.
“The scope of their work should provide a framework for a full-system analysis by expert third parties,” Preckwinkle said in a press release. “The Civic Consulting Alliance has worked with my administration since I took office to sort through complex organizational, operational and policy matters,” Preckwinkle said. “I am grateful that they have accepted this project.”
But Berry warned that another study was not necessary.
“The taxpayers of Cook County do not need another study of the unfairness of their tax system. They live it every day,” Berry said in a statement. “What they need now is leadership to fix the problem.”
— Berrios digs in during Cook County Board hearing on property assessments —