Newswise — The number of Chicago homeowners appealing their property tax assessments has increased during the last decade, but a decreasing percentage of them have been successful, according to a study at the University of Illinois at Chicago.
This finding suggests that the agencies reviewing tax appeal applications do not simply capitulate to the "squeakiest wheels," said Rachel Weber, associate professor of urban planning and policy at UIC.
The study found that hiring legal counsel did not increase the likelihood that an appeal would result in a reduced assessment.
"Applicants tend to live in white, moderate-income neighborhoods and have newer, larger homes with assessments that increased significantly since the last valuation," Weber said. "But successful applicants tend to live in smaller, older homes in neighborhoods that have experienced slower rates of property appreciation."
The study found that homeowners in neighborhoods with high property values but low incomes were more likely to appeal, but less likely to see their taxes reduced, than owners in high-priced, high-income neighborhoods.
Homeowners in "thick markets" -- defined for this study as census tracts where more than 120 homes had sold in the previous three years -- were less likely to appeal and less likely to win.
"That suggests that information matters to both the potential applicant and the reviewer," Weber said. "In thick markets, where nearby sales give an accurate, up-to-date picture of market values, homeowners are less likely to appeal. Moreover, the review agencies have more information to accurately assess housing values in these neighborhoods."
The researchers warned that property tax assessments could become regressive if owners in high-income neighborhoods with high property values consistently correct overvaluations while their counterparts in lower-income neighborhoods do not. They recommended that the appeals process be publicized more widely in lower-income neighborhoods, and that the city conduct more frequent valuations there.
Weber conducted the study with Daniel McMillen, professor of economics at the University of Illinois at Urbana-Champaign.
UIC ranks among the nation's leading research universities and is Chicago's largest university with 26,000 students, 12,000 faculty and staff, 15 colleges and the state's major public medical center. A hallmark of the campus is the Great Cities Commitment, through which UIC faculty, students and staff engage with community, corporate, foundation and government partners in hundreds of programs to improve the quality of life in metropolitan areas around the world.
For more information about UIC, please visit www.uic.edu
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