Chicago’s Tax Assessor Corrects Massive Undervaluation

Cook County Assessor Fritz Kaegi has fixed hundreds of property misclassifications after a months-long audit, but questions remain over how many errors are still unresolved.

At least 620 properties were misclassified or undervalued during the 2023 tax year, resulting in an estimated $444 million in missed taxable value.

The assessor’s office has since corrected 491 of those errors, adding nearly $489 million in taxable value to county rolls — about 17 percent of the new construction value added countywide in 2023, the Chicago Tribune reported. An investigation by Illinois Answers and the outlet reported the misclassified properties last year.

Still, 129 properties identified in the investigation remain incorrectly classified, with fixes delayed due to a backlog at the Cook County Board of Review and what Kaegi’s office described as “quirks in the tax calendar.”

The office also blamed inconsistent permit data from local municipalities as a key factor behind delayed corrections.

The misclassifications carried major financial consequences.

Some homeowners, like those in suburban Lynwood, have already received back tax bills as high as $23,000 after belated reassessments. State law allows for up to three years of back taxes, though Kaegi’s office maintains that it won’t issue back taxes in cases where it failed to act on construction permits it had on file.

In 46 out of 55 back-taxed cases, Kaegi’s office did have relevant permit information, but missed it.

Many affected properties were either new construction or had undergone significant renovations, but the assessor’s records failed to reflect those changes. In some cases, properties were still being taxed based on outdated classifications.

For instance, a home in Gilmore Park built in 2021 and sold for $843,000 continued to be assessed as a vacant lot, with its value listed at less than $45,000.

Kaegi’s office has since hired a dozen more staffers, including two permit specialists and 10 field inspectors, and promoted a veteran staffer to oversee data integrity. The office also plans to launch a sales validation team this year to help catch discrepancies, such as multimillion-dollar sales on properties incorrectly recorded as vacant.

Kaegi is pushing for broader systemic changes.

Last week, he called on the Federal Housing Finance Agency to release appraisal data from Fannie Mae and Freddie Mac to local assessors. Kaegi argued that access to this data — currently restricted — would help improve the accuracy of property assessments, particularly in addressing long-standing issues like regressivity, where lower-value homes are often over-assessed relative to their market value. His office released a public dataset on Monday morning with building permits submitted to the office by municipalities, another bid to bring transparency to the process.

Critics argue the long delays and lingering errors undermine confidence in Cook County’s property tax system — especially when homeowners can be hit with massive, unexpected tax bills for mistakes they had no hand in.

Kaegi’s office is reviewing the 46 back tax bills for errors, as delays in delivering the permits to the assessor’s office can slow its ability to make corrections, a spokesperson said.

— Judah Duke