Taxing Sylvia Gonzalez out of her Logan Square home drives gentrification.

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Sylvia Gonzalez. Photo: Block Club Chicago.

I posted several days ago about how the regressive property tax system, while multi-layered and complicated for the ordinary Chicago homeowner or renter to understand – purposefully so – is having the immediate effect of driving gentrification in neighborhoods like Humboldt Park and Logan Square on the city’s north west side.

You can read those posts here and here. 

Today, Chicago’s wonderful source for local news, Block Club Chicago, has a story by Mina Bloom about Sylvia Gonzalez who lives on Lawndale in Logan Square.

Mrs. Gonzalez and her family’s story is in someways different from mine. Block Club reporter Bloom:

Gonzalez, 54, remembers the day their home loan was approved. It was also the day after their second son was born.

“A baby and an approval of a loan. … So we walked in here — first week of August 1990 — and for me it was like, ‘Wow, we did it.’ I’m an immigrant; I’m from Mexico. My husband is as well. I was 25 years old. … So, for us, this was big,” Gonzalez said.

The Gonzalezes have lived in the house, situated on Lawndale Avenue just south of Diversey Avenue, for nearly 30 years.

I’m older than Mrs. Gonzalez and we were renters for most of our lives. We didn’t buy a house, the same house we live in now, until we were in our 40s.

But we bought our home a year after Mrs. Gonazalez and her husband bought theirs. It was for about the same price. Its current market value as determined by the County Assessor is almost identical t hers as is the increase in our tax bill.

They are giving serious thought to leaving Logan Square because of their tax bill. They are not alone.

The average 24% increase in Logan Square taxes from 2017 to 2018 assessments are forcing many long-time residents to flee.

In today’s Crain’s, it is reported that the city will receive a $181 million dollar TIF “windfall.”

It won’t be a windfall for Mrs. Gonzalez or for the rest of us.

TIFs cover one out of four properties in Chicago and their taxes are frozen. TIFs raise tax rates for all other taxpayers from ten to 15 percent according to Andrew Schneider, Logan Square resident and President of Logan Square Preservation.

(Update: In their report, County Clerk Karen Yarbrough’s office said that 35% of property taxes were captured by TIFs.)

I still offer the idea of capping the property taxes of long-term homeowners in gentrification-threatened neighborhoods like ours.

Add a surtax to million dollar homes and million dollar sales.

 

7 thoughts on “Taxing Sylvia Gonzalez out of her Logan Square home drives gentrification.

  1. Public records show a $200,000+ mortgage on the house as recently as 2015. Think about that for a second – the house was purchased in 1990 for $100,000; and 30 years later, the house has a mortgage for $200,000!!

    This homeowner wasn’t taxed out of her home. She cashed out refinanced herself out of her home! But that doesn’t fit your narrative!

    1. A family creates equity in their home and then borrows against that equity. How is that the problem? You make “cashing out” almost sound criminal when that is the way the system works.

      1. Fred – HELOC’s are terrible products for most people and it strikes me that anyone concerned over consumer welfare would take up this cause. This family signed up to take on the burdens of a terrible consumer loan product, and they do bear some responsibility. While the tax increases are burdensome, and will continue to be given Chicago’s kleptocratic government, they could have been managed by this family had they not signed on to pay for a house three times over. I say this not in a judgmental way but rather this is the consumer message that should be being broadcast. I think one of the difficult things is to digest facts to which are not at all comfortable to us. And that fact that Chicago has spent, and is committed to spend, far more money than it has or will have is inescapable, and your cap suggestion won’t help in the holistic scheme of things (even though it might make it temporarily better for a group of people). Go ahead – get a transfer tax on homes over a million – it raises 14 million dollars a year, against what looks like a budget deficit of a billion dollars this year (Preckwinkle has averred 1.4B dollars is the figure – that looks to high – but a billion is a fair assumption). What do you do after that drop in the bucket? Math doesn’t belong to progressives or conservatives – it is what it is.

  2. It’s outrageous that the middle class are being literally taxed to death to pay for the immorally high, gold-plated pensions of the greed-crazed unionistas

    1. I think you’re confusing my “gold plated pension” for the fillings in my teeth. Which were not covered by Medicare, by the way.

  3. Fred, your position is somewhat silly. Yes, it’s inconvenient that property taxes outpace one’s income, but in the case you cite the person could easily have sold for a profit and moved to a location where the taxes are more in line with their income – and purchased for cash which means not throwing money away on interest. I’m not going to cry for someone who is property-rich and wants to give me a sob story because their investment worked out extremely well.

    A better argument about high property taxes can be made in the south suburbs – where taxes are out of line compared to property values. The county assesses properties at twice what the market is bearing and the taxes are so high the properties will eventually be abandoned because nobody is going to pay increasing taxes on a depreciating asset. Here is just one of thousands of examples: https://www.zillow.com/homedetails/101-E-155th-St-Harvey-IL-60426/4263219_zpid/

    Pick any town within 6 miles of Harvey and you’ll find the exact same situation – the taxes are out of line with the owner’s income BUT the owner has to sell AT A LOSS or abandon the thing so as not to lose more money.

    Gentrification is an inconvenience for low-income people, but the remedy (Selling) is not that bad (although getting hit with the capital gains tax on the profit is probably the biggest pain, which is another story.) Abandonment due to property taxes increasing while property values are decreasing is a much bigger problem.

    1. Fritz Kaegi ran and won on a platform of fairness in assessments. Under Machine Boss Joe Berrios, the situation you describe was true. Kaegi is addressing it. But he has no control over the problem I described here. You believe that complaining about being taxed out of your home after living in it for a generation or more, raising a family, making community connections. supporting local schools, shopping in local stores is silly. Just cash out and move somewhere else. It’s just an inconvenience, says you. Well, that’s you. Not me.

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