Luxury Home or Vacant Lot? Cook County Assessor Misclassifies Hundreds of Properties, Missing $444M in One Year Alone

This story is a collaboration between the Illinois Answers Project and the Chicago Tribune.

Denise Gilmore feels like she’s being taxed out of Humboldt Park.

She and her husband, Willie, have lived on Pierce Avenue since 2010, but in 14 years their property tax bill has ballooned more than 60% to $3,319 even though they haven’t renovated their brick workers cottage. Taxes could hit even harder next year after Cook County Assessor Fritz Kaegi’s office increased the home’s valuation by $60,000 to $250,000.

But some of the Gilmores’ neighbors — whose homes are significantly newer and worth much more — haven’t felt the same pain. That’s in large part because Kaegi’s office regularly misclassifies and undervalues properties throughout Cook County, an Illinois Answers Project and Chicago Tribune investigation found.

Across the street from the Gilmores, an $843,000 two-story farmhouse built in 2021 continues to be categorized by Kaegi’s office as vacant land worth only $44,280. The new homeowners’ 2024 tax bill is only $750.

Halfway down the block, the owners of a sleek, gray $695,000 two-story home purchased more than a year ago were charged just $1,315 in taxes this year because the assessor’s office continues to classify the property not as a house but as a residential garage at the back of a vacant lot valued at just $73,900.

The assessor’s office did much the same for a two-story home that recently sold for $800,000 a few blocks away on Lawndale Avenue. For years, the office has assessed the home as vacant land worth only $35,710. The homeowners’ most recent tax bill? Just $756.

And about a half-mile east on Crystal Street, another farmhouse-style residence that sold for $875,000 in early 2022 is still classified by Kaegi’s office as vacant land worth only $46,500. The owner is being billed just $787 in property taxes this year.

The Gilmores’ house isn’t being unfairly targeted. It’s being treated normally and reassessed every three years like hundreds of thousands of properties across Cook County.

Rather, the inequality is due to the assessor’s office missing new construction and major improvements to homes and businesses all across Cook County. In one year alone, Kaegi’s office has missed hundreds of millions of dollars in market value, which is a foundational figure used in taxing properties in Cook County.

The missteps came even though in hundreds of cases Kaegi’s office possessed the documents or data it needed indicating the homes and businesses had been renovated or that the vacant land had been developed, the Tribune and Illinois Answers found.

In the case of the Gilmores’ neighbors, Kaegi’s office had 2021 building permits for all four properties showing new single-family homes were being built there, as well as records of recent sales on all four of the homes. 

His staff has still not reclassified those homes.

“I do think the taxes are unfair,” said Gilmore, 53, whose mother bought the house on Pierce Avenue in the mid-1980s. After her mother died, Gilmore took over the title so that she and Willie could raise their six children where she spent her teenage years.

The Gilmores have been behind on their taxes since last year, records show, and Denise Gilmore said she is increasingly tempted to sell.

They aren’t the only ones in the neighborhood feeling the pinch.

Jenny Schlueter, a nonprofit animal rescue professional, lives a half-mile away from the Gilmores with her six cats, four chickens and a dog. Since 2006 when she first moved in, Schlueter’s property taxes have nearly tripled to about $5,900, forcing Schlueter to bring on two roommates to help with the bills.

“I’ve invested a ton in this community … it’s definitely not fair to take so much of the burden,” she said. “I get that the city needs taxes and the county, like I understand how the tax system works, and it’s needed,” Schlueter said. “But I think they have to do a better job making it fair and being on top of things.”

Skylar Damiano is one of the Gilmores’ underassessed neighbors. His home was built on what the assessor has classed as a side lot. After not receiving his property tax bill last fall, he contacted his realtor, the assessor and his alderman, trying to understand why. When he followed up, he was constantly referred to other offices, he said. Given the amount his home was worth, he figured some government official would help put his house on the rolls.

“I have the means to pay,” he said. But local officials have still not acknowledged his house exists, despite his many efforts. It was a lot of work, he said, “And for what? You should be billing me.” 

The underassessments can hurt homeowners in at least two significant ways. People like the Gilmores have to pay more than their fair share in property taxes when others pay less. And if Kaegi’s office does fix those mistakes, it can have drastic consequences for property tax bills: the assessor can charge up to three years in back taxes in one lump sum that can reach tens of thousands of dollars for a single homeowner. 

Kaegi’s administration has known about the problem almost since the day he was sworn into office nearly six years ago. A senior official and some front-line workers raised the alarm early on, noting it was partly the result of understaffing and bad permit data. Township assessors also complained. An internal audit that Kaegi’s office commissioned offered solutions, but they were back-burnered. Even today a social media account publicly trolls Kaegi, highlighting buildings his office has underassessed — photos included. 

Kaegi argues that his office is getting better at spotting missed properties, due in part to the addition of a new program that uses satellite imagery to identify new construction.

Still, Kaegi has not addressed the issue on a systemic level, moving slowly, for instance, on hiring more field inspectors who could help root out the problem with on-the-ground examinations, according to records and interviews. And since he has not offered a comprehensive solution, his office cannot provide a full accounting of the size of the problem.

So the Tribune and Illinois Answers conducted its own partial audit using the same tools Kaegi’s office has at its disposal.

Read how Illinois Answers Project and the Chicago Tribune reported the story

Following a nine-month investigation, Illinois Answers and the Tribune found Kaegi’s office missed at least $444 million in value from a combined 620 properties during the 2023 tax year. The missed properties can be found across the county, from an $11 million mansion on the North Shore to swaths of modest homes in tiny south suburban Lynwood.

The Tribune’s and Illinois Answers’ estimate is conservative: The analysis represents only a single year’s worth of property that was not accurately assessed, even though most of the properties identified were off the tax rolls for multiple years. And the $444 million estimate of missing value includes only properties that recorded sales between 2014 and 2023.

The audit is not exhaustive: Illinois Answers and the Tribune stopped adding new properties to the count once it was clear Kaegi’s office was underassessing properties across the county. 

The missing value represents more than 13% of all new property value added to the county via new construction in 2023, according to data from the Cook County clerk.  

The investigation found that despite the early warnings to Kaegi’s office, the issue proliferated amid staffing cuts, the pandemic, technological growing pains and organizational lapses.

And of the 620 properties that Kaegi’s office underassessed, 535 had a permit on file with the assessor’s office but were not reclassified by the end of 2023. 

Some of the underassessed properties have already been corrected as part of fresh revaluations in 2024, but many remain unchanged — especially in Chicago.

In response to the findings, a spokesperson for Kaegi wrote in a statement that the office plans to make “two immediate changes.”

“First, we will conduct an internal audit of previously closed permits, and integrate any missed permits into the 2025 assessment cycle,” the spokesperson said.  Second, the office will change its procedures to ensure field inspectors are assigned to properties with active building permits, he added.

‘Proud of what we’ve done’

While Kaegi and senior members of his administration acknowledge the issue, they downplayed it in several interviews. They said the lapses were rare and being corrected as the office incorporates new digital tools and hires more staff.

They also pointed to the nearly 6,000 corrected properties they have added to the rolls since 2019, ramping up the office’s pace of fixing old mistakes.

In a June interview, Kaegi said he could not quantify how many properties his office has missed but said he thinks his office is correctly assessing “99.99% of the county.”

“We’re proud of what we’ve done, but we know it can always be improved,” Kaegi said.

He blamed vestiges of predecessor Assessor Joseph Berrios for difficulties in hiring new staff and said upgrading aging software has been a heavy lift. 

“We knew when we came in that there were a whole bunch of areas where there were capabilities for application of technology, better processes, better people, to do better. And we think we have,” Kaegi said.

Moreover, Kaegi and his deputies said the missing properties make up a scant percentage of the county’s nearly $200 billion in taxable value. His office argues catching them all would not meaningfully lower homeowners’ bills, or conversely, that missing them does not make others’ taxes much higher.

While internal and independent analyses found Kaegi has improved key metrics for overall accuracy, experts said his failure to assess new builds or significant renovations — even if it represents a small slice of the more than 1.8 million properties in the county — is fundamentally unfair, undermining his campaign promise for accuracy in assessments.   

One property tax expert, Chris Goodman, associate professor of public administration at Northern Illinois University, said the mistakes not only erode trust in the assessment system but exacerbate unsustainable tax burdens. 

“If your property is assessed artificially low … someone else is going to have to make up that portion of the (tax) levy that you would pay,” Goodman said. “In the city of Chicago, that might be relatively small. In some of these smaller suburban jurisdictions, it might be much larger.”

While Kaegi’s office has permit data on file for most of the properties it missed, he also partially blamed the hundred-plus municipalities around the county for not delivering the data to his office. Under state statute, every local government that issues building permits has to send regular reports to their county and township assessor’s office so that the assessor is notified of new construction or renovations. 

“There is a perennial problem with … people who don’t turn in permits or people who, for whatever reason, whether intentionally or not — we don’t get fulsome views of the data,” Kaegi said. “It’s up to us to try to make it better. And we have.”

Kaegi’s staff acknowledged that improving their methods of recognizing new construction was a relatively low priority during the office’s first term, below updating its valuation models, upgrading its technology and making the office and its website more user-friendly.

After reviewing Illinois Answers’ and the Tribune’s findings, Chris Berry, a professor at the University of Chicago’s Harris School of Public Policy who has studied assessment fairness, said the buildup of missed properties “seems like bad bureaucratic process,” and is “a big deal in terms of the fiscal implications for these specific properties.”

He added that the findings fall far short of the systemic malfeasance that persisted under Berrios, whose assessment policies resulted in “so many billions of dollars not on the tax rolls, hundreds of millions of dollars of under-taxation of the people at the top.”

“I can believe this is happening, this seems bad, and nevertheless I can also have the general view that (the office) is doing a much better job” than it did under Berrios, Berry said.

But the issue can have a big impact in places like south suburban Lynwood, where 84 completed properties are all inaccurately classed as vacant land, even though some started construction in 2019, according to publicly available county satellite data. More properties were built during the following three years. All 84 sold for more than $300,000 but are still assessed as empty plots.

The analysis found that if the missing Lynwood homes were assessed in line with their sale values, the tax bill for the owner of a $250,000 Lynwood home would have dropped by more than $200 this year.

Lynwood Mayor Jada Curry wrote in a statement last month that Kaegi’s error “clearly validates the fact that the assessor’s office’s system is flawed and in need of a comprehensive overhaul.”

“While the village of Lynwood maintains a positive working relationship with the assessor’s office, I am disappointed, concerned, and eager for the assessor to address these problems to every Lynwood homeowner and provide solutions to prevent this from happening in the future,” Curry wrote.

Early cautionary signs

Warnings about the problem came early and from the highest levels in Kaegi’s administration. 

In the summer of 2019, six months after Kaegi took office, the assessor’s chief data officer, Rob Ross, wrote a memo flagging “critically low” staffing levels and problems with permits the office relied on to catch property changes.

He suggested the office undertake an “end-to-end review of all sources of building permit information to identify opportunities for workflow improvements” to avoid regressivity, which is the overvaluing of low-priced homes and undervaluing of high-priced ones.

“If our office misses a significant number of permits over time, what impact might that have on assessment quality?” Ross wrote.

Kaegi did not respond to the memo, which was sent to him and three other senior office officials, according to email records obtained by Illinois Answers and the Tribune. A Kaegi spokesperson suggested a reply was unnecessary because the issues raised in the memo were already known to the office.

Patrick Hynes, then a front-line residential field inspector, and other longtime employees said they also raised early concerns about field inspector attrition and missed in-person inspections with office leadership. But those concerns were dismissed, and as Kaegi’s office emphasized using satellite data to spot construction and deprioritized physical inspections, newly built or improved homes and businesses kept getting missed, Hynes said.

“A satellite photo is doing the assessment from 4,000 feet,” Hynes said. “But a property looks quite a bit different when you’re 4,000 feet away than it does right on top of it.”

Jenny O’Sullivan, who was also a field inspector, said she was chastised for raising complaints.

“Anything we said, they would say, ‘We have the data, we don’t need to be doing it this way,’” O’Sullivan said. “They basically said, ‘You’re antiquated.’”

Hynes and O’Sullivan eventually quit.

Other warnings came from outside the office.

A 2019 report conducted at Kaegi’s request by the International Association of Assessing Officers found the assessor inherited an office that “suffered from years of neglect in the areas of data maintenance” and professional staff development. The office was responsible for assessing hundreds of thousands of properties each year, tracking roughly 110,000 annual sales and 200,000 appeals, but it had just one-fourth of the staffing recommended to handle that work. 

When Kaegi took office, there were only 26 staff to inspect existing properties, catch construction of new buildings, and manage inspectors, according to county payroll data. The report recommended increasing staffing to 65 inspectors. Acknowledging the office’s limited budget, the report called for enough bodies to at least inspect new construction.

While the staffing number under Kaegi has fluctuated, rising to 35 by the end of 2020, the office employed only 29 field staffers through June, according to county payroll data.

Kaegi’s office said it is hiring new inspectors and analysts but efforts were initially slowed by a federal monitor assigned to ensure hiring was free of political influence. That monitoring ended in late 2022. 

He also blamed longer-term employees for being resistant to change and said it took time to replace them.

“People didn’t want a culture of accountability, using technology. It was a patronage haven, to an extent, that part of the office,” Kaegi said.

Under the old system, inspectors picked up their assignments at the assessor’s downtown office and drew sketches that were scanned into antiquated software. Now, inspectors in the field receive their assignments via a computer tablet and input sketches and property data into an upgraded system. 

‘The world’s biggest heart attack’

When Kaegi’s office reassesses properties it missed, homeowners who had been under-taxed can be suddenly hit with a massive bill. 

New homeowner Naveed Anwer of Justice had been paying about $1,800 per month in mortgage payments and property taxes for the first three years he lived in the southwest suburb. 

Unbeknownst to Anwer, the monthly payment was less than it should have been because Kaegi’s office was assessing his home as vacant land. Then Kaegi’s office caught the error and, out of the blue last December, Anwer’s bank informed him his family’s new monthly payment would be more than $4,700.

“I got the world’s biggest heart attack,” Anwer said. “I just felt like, I don’t even want to live anymore.”

Two days later, a letter came from Kaegi’s office explaining to the Anwers that they were being taxed for the last two years of assessments that Kaegi’s office had missed: $10,504 for 2020, $13,683 for 2021, plus a fresh $13,605 bill for second installment taxes for 2022. Previously, their annual tax bill, which was being included as part of the $1,800 monthly bill, was just $900.

“For a second, I thought it was a prank, maybe,” said Anwer, who works in information technology. He started to wonder how he could keep providing for his stay-at-home wife and three children without losing their home.

So far, it hasn’t come to that. Anwer has drawn down on his savings to pay the bills, he said, and his close-knit family has also offered help. The mixup set back his financial plans by five years, he said during an interview in the spring.

Cook County does not offer payment plans for property taxes. The treasurer’s office, which sends out the bills, accepts partial payments but late payments are charged an interest rate that could add up to 9% per year. 

While huge back tax bills like Anwer’s are hard for taxpayers to swallow, Kaegi said they show his office is moving in the right direction.

“There’s been really broad operational improvement … measured by the amount of omitted assessments that were collected, versus … when we came in,” Kaegi said.

Indeed, the county charged more than $56 million in back taxes via “omitted assessments” in 2023, up from just over $15 million in 2019, Kaegi’s first full year in office, according to data from the Cook County treasurer’s office. On average, he has sent 1,175 omitted assessments each year since taking office. That’s up from the 890 average annual omitted assessments sent during Berrios’ tenure. 

If those bills are paid, the revenues are distributed back to various taxing bodies on a pro-rated basis based on the tax rates for the year in question.

State law allows county assessors to back-tax property owners for up to three years of missed assessments, even when the homeowners did nothing wrong. A spokesperson for Kaegi’s office said officials “don’t recommend back taxing” in cases where the assessor’s office had permit data on hand, but the office does pursue back taxes in cases like Anwer’s, when the municipality never sent the data to the assessor’s office.

But the Tribune and Illinois Answers found at least one case where the office appeared to violate that policy. A homeowner in Northbrook was hit with a nearly $7,800 bill in back taxes this year after the home, built by 2022, was added to the rolls in 2023. The assessor’s office had the permit data on file, records show.

That homeowner’s next door neighbor was hit even harder.

Data from the assessor’s old software system indicated that construction was underway on the single-family home in 2019 and the parcel should be rechecked the next year. 

Finished in 2020, it sold for nearly $1.4 million the same year. The owners paid less than $1,800 in property taxes last year because the assessor’s office listed it as vacant land for three years before realizing their error. 

Their bill this year: more than $93,000. The sum includes more than $67,000 in back taxes.

In an even more extreme case, Kaegi’s office classified an $11 million lakefront house in Winnetka as vacant until 2022, even though its construction was completed in 2020. This year, its owner owes $651,346 in property taxes, including more than $370,000 in back taxes from 2020 and 2021 — more than 4% of all property taxes being collected by the village of Winnetka this year.

To NIU’s Goodman, it’s unreasonable to expect any taxpayer to shoulder the burden of multiple years of administrative mistakes.

“Someone’s going to realize that they screwed up, and then you’re going to get a huge tax bill that you probably can’t pay — I certainly couldn’t pay three years of property taxes on my house all at one time,” Goodman said. “And that’s not the fault of the property owner.”

Missing permit paperwork

A review of property records shows the Anwers’ home did not reflect increased assessments for multiple years because of another reason properties are under-assessed: building permits submitted to the municipality were never shared with the assessor’s office.

In Anwer’s case, a Justice village official said in an interview that the permit for the Anwers’ home had “slipped through the cracks” after the lot where they built had been subdivided from a larger property.

The home might have gone missing for longer had the township assessor not discovered the error. 

Hynes, the former residential field inspector who left the county assessor’s office after Kaegi took over, was elected the Lyons Township assessor in 2021.

Justice officials had issued five permits for the parcel, but the ones for demolition of the old house on the property and constructing the new house were not sent by the suburb to the Lyons Township assessor’s office, Hynes said. 

His staff updated a permit report sent to Kaegi’s office about Anwer’s property to include the words “MISSING HOUSE,” along with a formal request for a second look, Hynes said. That’s how the Anwers ended up getting their more accurate — but whopping — bill.

State law requires Cook County’s 120-plus cities, towns and villages to send along permits to their township and county assessor within 15 days of when they are issued. But adherence has been inconsistent at best. 

“It used to be that they would just send us a box of paper — like, ‘here you go,’” said Scott Smith, Kaegi’s chief of staff. “Some municipalities would only send us single-digit (numbers of) permits.”

Suburbs had previously submitted permit data to township assessor offices, which then forwarded the information to the county. 

Even in the less typical cases when the permits are directly sent to the county assessor, they sometimes get lost because they aren’t sent in a consistent fashion or details get mixed up because village permit formats differ or records are handwritten.

In 2021, Kaegi started asking township assessors to submit permit data through a new online portal. But not everyone complied, including the biggest permit-sender in the county: the city of Chicago. 

For a time, Chicago — which does not have township assessors — regularly sent Kaegi’s office a spreadsheet of its permit data that was easily digestible. In 2023, however, the city told Kaegi’s office it could simply pull data from the city’s public permit database. 

But the assessor’s office said the “firehose” of data took much time to clean up and asked Chicago to switch back. The issue eventually was resolved, but only after the assessor’s office spent several months creating a program to scrub the data.

COVID complications

Another complication was the pandemic: Aside from the switch to remote work and the transition away from their old software system, Kaegi made the unprecedented decision to rejigger assessments in mid-2020. The “COVID adjustment” was designed to reflect the economic impact of the pandemic on property values. But it ended up sowing chaos and made fixing permit problems a lower priority, said Rob Ross, Kaegi’s former data officer. 

“It’s like Lucy on ‘I Love Lucy’ with the chocolates, except if Lucy went and took a cigarette break for 15 minutes,” said Ross, who resigned in early 2022 after describing the COVID adjustment as “one of the most spectacular unforced errors I have ever seen at the local government level.”

The pandemic played havoc with suburban governments as well. Building departments that were used to sending paper permits to Kaegi’s office went remote or adapted their systems on the fly. Many are now playing catch-up, Kaegi’s staff say.

“During COVID, a lot of places just didn’t get this stuff done, right?” Kreg Allison, Kaegi’s head of data integrity, said in a June interview. In some townships, permit data that trickled in during COVID have since turned into a flood, he said.

Some might just be lost, assessor valuations chief Tia Giacalone said. She has been with the office since 1991. “Some (municipalities) may have sent permits in, some may have not, you know what I mean? Like things got kind of lost in the shuffle of the whole going remote thing.”

But unsent permits explain only part of the problem.

Missing data, internal dysfunction

Of the 620 properties identified by Illinois Answers and the Tribune that were incorrectly assessed in 2023, the assessor’s office had no permits on file for 85 of them.

For 160 properties, the assessor’s office website shows that Kaegi’s team received records of construction permits but categorized them as “closed” — a label indicating they were already inspected, the improvements were negligible or were otherwise not prioritized for another look.

The two new houses on Gilmore’s block in Humboldt Park, for example, have permit information on file with the county assessor’s office website. Both permits were categorized as “closed.”

Even absent permits, Kaegi’s office has access to many other data points for the missing properties. For most of the 620 of the properties discovered during the Tribune’s and Illinois Answers’ audit, Kaegi’s office had data showing a sale had taken place in the previous decade for a much higher price than the assessor’s estimated market value. Though it is frowned upon to rely on sales data to set valuations, the transactions could have prompted field inspections. 

Illinois Answers and the Tribune identified multiple times field inspectors caught new construction but the properties never got reclassified.

Notes from a September 2022 inspection of a modern two-story house show it replaced an older house in the 3400 block of North Leavitt Street one year earlier. The inspector wrote the property should be reclassified. The assessor’s office also had a construction permit for a new home at the address and records showing a house sale there for $1.7 million. Still, the assessor’s website appears to list the older house, valued at $780,000.

In another case, the assessor’s office logged permits in November 2020 for construction of a mixed-use building with homes on top of retail in the 3300 block of North Halsted Street in Lakeview. An August 2021 field inspection noted the new construction, and satellite data indicates the building was completed by 2022.

Assessor’s office officials recategorized the permits as “closed” in early 2023, records show. The property is still listed on the assessor’s website as vacant.

Allison, the office’s director of data integrity, said he personally assigns categories in a spreadsheet to each of the tens of thousands of building permits that come to the assessor’s office each year.

“We don’t have the staff to do all the things that we’d want to do ideally, but I can go through it and get it to be where it needs to be in a comfortable way,” Allison said.

Kaegi’s predecessors also struggled to catch new construction.

A CBS2 investigation in 2010 dinged James Houlihan for misclassifying vacant lots. He tapped the township assessors to conduct reviews, leading them to reclassify 252 properties. Berrios pledged to finish the job and added 401 buildings to the rolls.

Goodman, the professor of public administration, said it would be easier for Kaegi to blame municipalities for the bad data if the missing properties were concentrated in a few areas. But Illinois Answers’ and the Tribune’s investigation found that Kaegi’s office had missed at least one new property in 36 of the county’s 38 townships.

“It suggests there’s a little more systemic stuff going on about the data processes in the assessor’s office,” Goodman said. “It’s not that one city is (tracking) building permit data badly … this is all over.”

Tax impacts for tiny Lynwood

In south suburban Lynwood, where the assessor’s office failed to register construction for the bulk of two new subdivisions, Kaegi’s employees indicated in 2017, 2018 and 2019 that inspectors should check back on the lots, according to assessor’s office records. Other missed houses are scattered throughout the village. Their construction was completed between 2020 and early 2023, satellite data show.

But the data is not reflected in the the assessor’s current public interface.

The dozens of underassessed properties have sizable consequences for surrounding taxpayers and local governments in Lynwood. Based on their sale prices, Illinois Answers and the Tribune calculated that the 84 overlooked properties account for about $33 million in untaxed property value. If the sum were counted toward the village’s total taxable value, the overall tax rate of the village and its overlapping school and library districts would have deflated enough to give the owner of a house valued at $250,000 a break of about $230 on their property tax bill this year.