Ironically, “solidly blue” Illinois is one of the few states left that still engages in the Jim Crow-era practice of discriminatory and unconstitutional “equity theft.” This is how it works and, incredibly enough in this day and age, the practice is actually condoned by Illinois statutes.
If you, the homeowner, fail to pay any portion of your real estate taxes, then no matter how small the default, and no matter what the reason, your taxes will be “sold” to a real estate tax buyer, often a Wall Street investor, who then will have the right to collect punitively high rates of interest, and may ultimately foreclose on your home, evict you and your family, and take sole title and ownership of your home, without paying you a penny for any hard-earned equity in your property.
For example, if you owned a home worth $200,000, had no mortgage and owed back taxes of $2,000, a tax buyer could buy your taxes for a small sum, paid to Cook County, and if you did not pay the taxes plus exorbitant interest and penalties within a short period of time, foreclose on your home, require you to vacate the premises, rendering you homeless, take full title to your property, and then sell it for its true market value, reaping a six-figure profit, all because of an outmoded Illinois statute that has long outlived its usefulness.
Predictably, this practice victimizes those who are most vulnerable in our society — the elderly, the infirm, those suffering from dementia, and, most particularly, minority communities. Recent analyses published by NPR affiliate WBEZ have illustrated the racial imbalances that Illinois law promotes. AARP, among other respected organizations, has condemned the practice of equity theft.
It is long past time for Illinois to end its racially discriminatory and unfair practice of confiscating the entirety of people’s homes, depriving them and their families of what is, for most people, the principal component of their net worth, simply because age, infirmity or illness have prevented the homeowners from paying small amounts of real estate taxes.
Recently in Michigan, which used to employ a system similar to Illinois’, a home worth tens of thousands of dollars was lost to the government for non-payment of $8 in back taxes. You read that right — $8. The Michigan Supreme Court declared that this was an unconstitutional “taking” of private property without compensation. Illinois’ system would allow the same result and it, like Michigan’s, is unconstitutional. It should end, and end now.
Just last fall, lest anyone think “it can’t happen here,” Wednesday Journal ran the story of how Faith Julian, daughter of the noted scientist Percy Julian, after whom Julian Middle School is named, came close to losing her home on East Avenue due to the harsh and unforgiving nature of Illinois’ tax system.
We should demand that the Illinois system of equity theft be replaced with one of the systems employed by sister states to collect unpaid real estate taxes without punishing homeowners by confiscating their precious home equity.
Charles Watkins is an Oak Park resident.