Housing advocates and developers generally concur that the Chicago area’s shortage of rental housing has been exacerbated by a property tax policy that taxed rental properties at twice the rate of single family homes. Uneven tax rates effectively discouraged the development of new rental properties, and gave additional incentives to owners of existing rental properties to convert them to condominiums.
In April of 2002, at the County Assessor’s request, the Cook County Board of Commissioners adopted CRN’s recommendation to reduce the assessment rate for Class 3 properties (rental buildings with seven units or more) from 33% to 26%. The change brought the assessment rate for rental properties closer to 16% rate used for Class 2 or single family properties. Phased in over 2003 and 2004, the Class 3 revisions should help remove disincentives from building new rental units or preserving existing ones, as well as remove some of the upward pressure on Cook County rents.
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