Increasing property taxes hamper real estate market

Dalia Naamani-Goldman

Rising property taxes in Evanston have some current residents considering moving out and some prospective residents thinking twice about moving in.

“Even though people want to stay in Evanston, they can’t afford to,” said Jay Chandran, a real estate agent with Remax Alliance.

As City Council proposes higher property tax rates in order to fix next year’s expected $3 million to $5 million budget deficit, many members of the real estate industry are seeing the effects.

“Our taxes are high enough that people know it even before they (look) into (the area),” said James Schermerhorn, vice president of the real estate firm Schermerhorn and Co., 2733 Central St. “A lot of people scratch Evanston off (their) lists.”

According to Bill Vaselopulos, director of tax extension for the Cook County Clerk’s Office, current property tax rates range from 9.13 percent to 9.24 percent throughout the two major tax codes in Evanston. In other North Shore areas, property taxes are significantly less: 7.01 percent to 7.33 percent in Wilmette, 7.39 percent in Winnetka, 8.22 percent in Glencoe and 7.44 percent in Kenilworth.

Remax real estate broker Daryl Fiene said he had several clients put properties on the market due to the high property taxes. They generally were older people or younger families looking to reduce costs by downsizing or moving to another area, he said, adding that the taxes are “definitely having a negative impact.”

But city officials disagree with some of the realtors’ claims.

“I don’t think that’s true,” said Bill Stafford, Evanston’s finance director. “Obviously taxes are an issue, but if they were a major issue, we would see tremendous downturn in the market.”

The high property taxes “will always deter some people,” said Regina Correa-Cartright, a real estate agent with Coldwell Banker. “But in general, most people aren’t scared off by the taxes; they’re willing to suffer through (them).”

Correa-Cartright said she knows many people who grew up in Evanston and would like to move back, but cannot because of the high taxes.

Diane Benjamin, Evanston’s deputy township assessor, said she has received many complaints about the high taxes.

“It’s hard to stay here,” she said. “People can’t stop working because they have to maintain (enough money) to live here.”

According to Chandran, the Evanston market is “pretty active.” He said it would be more favorable if the property taxes decreased, but people still are moving to Evanston.

Real estate agents are divided over what’s causing the surge in property tax rates.

Correa-Cartright said Northwestern is responsible for the city’s deficit because it does not pay property taxes due to its status as a nonprofit. But Fiene said every time City Council proposes taxing NU, residents do not approve.

Schermerhorn disagrees that NU is to blame, arguing instead that expenses from Evanston Township High School and local grade schools create a bigger burden.

Schermerhorn noted that Evanston schools provide education for many students of low-income families and have high busing costs throughout the district. City Council and Evanston Township have “made steps to trim the budget,” he said. “But the school board is still spending quite a bit.”

Wayne Caplan, a Kellogg student and senior sales associate with Sheldon Good Brokerage in Chicago, said the national upper-end housing market has taken a hit recently because of the slow economy.

“Evanston is not immune from it,” Caplan said.

Comments