It’s safe to say that most local homeowners believe that their property taxes are just too high, but a state program in place since 1984 offers one of the few methods of keeping that bill in check for a set period of time.
The Historic Property Tax Assessment Freeze Program freezes the assessed value of an historic residence for eight years, followed by a four-year period during with the assessed value is stepped up until it reaches its current level.
In order to qualify for the freeze, four provisions must be met. The residence must be owner-occupied and the owner’s principal residence. The building must be registered as historic. The residence must be rehabilitated in accordance with the Secretary of the Interior’s Standards for Rehabilitation, and the rehabilitation must have eligible expenses equal to or exceeding 25 percent of the property’s fair cash value as determined by the assessor the year the rehabilitation started. (For complete details, visit www2.illinois.gov/dnrhistoric/Preserve/Pages/taxfreeze.aspx)
Oak Park Urban Planner Historic Preservation Susie Trexler thinks the program is a good resource for the village.
“I think incentive programs like the tax freeze are valuable tools for historic preservation,” Trexler said. “Preservation pays off in the long term and in ways that can be challenging to quantify, like civic pride and an increase in tourism. Too often these are weighed against more tangible, short-term benefits. Incentive programs not only make preservation an easier investment, they can make preservation possible where it may not have been before.”
The State Historic Preservation Office strongly recommends homeowners get in touch with them during the planning process of the construction to ensure that all planned work meets their standards.
Oak Park River Forest Historical Society Executive Director Frank Lipo, who says residents frequently make appointments to document the historic nature of their home for the freeze, remarks that this prequalification can be the key to receiving the freeze.
“The tricky thing is that some people think that everybody’s eligible for the freeze, no matter what kind of work they did,” Lipo said. “You can count a new roof or a new heating system, but this is not a freeze for ripping out all of the historic features. It has to be doing the right thing historically, not purely modernizing.”
He points out that the qualifying work must be done within a two-year period and says that the program can be very useful for those looking at the bigger picture, as some big-ticket items count towards the spending requirement and aren’t always held to historic standards.
“You don’t have to put in a coal furnace or an outhouse just because your house was built in 1897,” Lipo said.
The state touts the benefits of the program as encouraging the preservation of historic buildings, returning underutilized structures to the tax rolls, revitalizing and stabilizing neighborhoods, increasing the amount of available housing within a community and sustainably reusing the built environment.
Oak Park Township Assessor Ali ElSaffar notes that given these objectives, “One could question the premise of the program, especially as used in Oak Park. A lot of our homes are in the three historic districts – possibly the largest districts in Cook County.”
He notes that people in Oak Park might fix up their historic homes without the incentive of the freeze and says that roughly a couple hundred homes in Oak Park are in the program. On the other hand, he says that the changing tax climate might make this program more useful in Oak Park.
“With the federal tax law that limits the deductions of property taxes, some of these high-value homes are not as valuable as they might have been before,” ElSaffar said. “Maybe we do need an incentive to keep them up.”
The case of the contractor
Many regard the freeze solely as an incentive for homeowners to preserve the historic features of their homes during renovations, but the program is not limited in scope to homeowners with a love of historic homes.
A recent property listing in Oak Park illustrates one way the program is open to interpretation. In 2016, a 1903 Victorian style home sold in foreclosure for $338,000, a relative bargain given its 2006 sales price of $615,000.
Purchased by a developer who gutted the house and rehabbed it, 112 S. Scoville Ave. hit the market in August 2018 with an asking price of $1.1 million. The MLS listing for the home started with a strong statement on taxes:
“Luxury living with the lowest taxes in Oak Park. Tax freeze-eligible renovation with super low assessed value. 2017 assessed value of 10,475. Taxes under 4K per year for next 8 years. Another 4 years of dramatically reduced taxes after that. Projected 200K in tax savings over next 12 years.”
Neighbors and Oak Park residents who were having problems getting their own property tax assessment freezes implemented questioned how a rehabber could qualify for the tax freeze, especially when the house had been gutted, with many original features removed during the rehab process.
The freeze requirements clearly state that the residence must be owner-occupied and the owner’s principal residence to qualify for the freeze and that the freeze is cancelled if a property is sold during the freeze period. ElSaffar points out that there is a way for contractors to get around this provision.
“A contractor could get pre-approved for the plans of the renovation but not go for final approval,” ElSaffar said. “Once the property is sold, the new owner could file for final approval.”
In the case of this house, the freeze is likely off the table for the time being. In November, the home was listed for rent, and the Cook County Assessor does not indicate that a property tax assessment freeze has been obtained for the home.
Problems with implementation
While the Historic Property Tax Assessment Freeze can be a valuable incentive for historic home owners looking to recoup some of their expenditures of keeping up their older homes, the process is not always smooth. ElSaffar notes that many locals have been contacting him about Cook County’s inability to properly administer the program.
“I’m working to advocate for these people,” he said. “In the last several years, a number of Oak Park homeowners have had problems with the program.”
ElSaffar cited examples such as homeowners who received their Certificate of Rehabilitation from the state indicating that their projects qualified for the freeze but who did not receive the freeze in spite of submitting the paperwork to the county.
There are also homeowners who were in the middle of their eight-year freeze period only to have their freeze denied upon proper renewal. ElSaffar said that under the previous county tax assessor, Joseph Berrios, the number of employees working to implement the tax freeze had dwindled.
His hope is that the issues will be addressed under new assessor, Fritz Kaegi, an Oak Park resident.
“I have a few horror story cases that I’m working on taking downtown,” ElSaffar said.