The assessment on Cook County Assessor Fritz Kaegi’s home went down while his neighbors’ soared. What happened?

Cook County Assessor Fritz Kaegi owns a million-dollar, 120-year-old Prairie-style, two-story home on a spacious corner lot on the eastern side of Oak Park’s Frank Lloyd Wright Historic District.

Within a five-block area of Kaegi’s residence, neighbors with similar homes saw their properties’ assessed value — used to figure local property taxes — increase by an average of 32% this year compared with 2020 in the every-three-year reassessment of Oak Park Township.

But the home of Kaegi, in his fifth year as the person responsible for running the office that decides the value of homes ahead of Cook County property tax bills being mailed, saw the assessed value of his home drop by 5.3%, county records show.

While the assessor’s estimated market value of Kaegi’s home decreased from $1,172,150 in 2020 to $1,110,000 this year, the average for similarly classified homes swelled from $584,010 to $773,360 during the same time period.

Assessment breaks for wealthy homeowners have often been the norm in Cook County: A previous Tribune analysis found residents in working-class neighborhoods were more likely to receive property tax bills that assumed their homes were worth more than their true market value, while wealthier communities caught a break because property taxes weren’t based on the full value of their homes.

But there’s no fix in at the office, the assessor’s office insists. In fact, Kaegi said the decrease was a corrective counterbalance to a massive assessment hike his house received when he took the unusual step of tattling on himself three years ago, resulting in his family paying more per square foot than neighbors in comparable homes. Moreover, assessment records appear to show Kaegi’s home was overassessed for years, even before he reported the additional square footage, one expert said.

The factors behind Kaegi’s reassessment reduction speak to the vagaries of a complicated system he vowed to make more equitable and uniform: determining a property’s taxable market value at a time of ever-increasing property tax bills used largely to finance local schools, all based upon an antiquated agrarian measure of wealth.

Kaegi’s 2023 assessment put him among the less than 1% of similarly classified properties in his neighborhood to see a reduction. Of more than 2,000 such homes in Oak Park Township, a Tribune review showed Kaegi’s home was one of only 18 residences that saw a lower assessed value compared with three years earlier.

Through his office, Kaegi declined to be interviewed. Instead, he released a statement saying, “My home’s most recent assessment reflects the highest price per square foot compared to similar homes in my neighborhood.”

“As Cook County Assessor, I hold myself to the highest standard of ethics to ensure all properties are assessed accurately,” Kaegi said in the statement. “It is important to me that taxpayers trust the Assessor’s Office under my leadership and know that the old days of politically connected people getting special treatment are over.”

While the assessment dip Kaegi’s home received this year was unique, Kaegi and his office noted that in 2020 — roughly two years into his tenure leading the office — Kaegi’s home received a massive assessment hike. That year, his home’s valuation shot up by nearly twice as much as his neighbors in surrounding blocks, from roughly $727,000 to $1,172,000.

The 2020 increase came as a result of an atypical field check that the assessor requested himself. That survey resulted in about 700 square feet being added to the recorded size of his home that had previously not been reflected in tax records.

Kaegi and his wife bought their turn-of-the-century four-bed, 3.5-bath stucco house in 2010, according to county records. It is a “2-06″ residence, a classification that covers homes with two or more stories that are at least 62 years old and ranging from 2,201 to 4,999 square feet.

Though their purchase price was $1 million, the home had an assessed market value of just $743,000 the year they bought it, county records show. That assessment dipped to roughly $668,000 in 2014, then rose to about $728,000 in 2017. Those values were set while Kaegi’s predecessor, Joe Berrios, was running the office.

In 2018, amid Tribune reporting that showed inequitable assessments resulted in higher-priced homes being under-assessed and lower-priced homes being overassessed, Kaegi ran on a platform of reform.

The Tribune’s “Tax Divide” series showed previous residential modeling to determine assessments was faulty. For years, the assessor’s office valued homes in affluent neighborhoods too low, and those in economically struggling areas too high. The model used by the office often created a regressive system that unfairly shifted the property tax burden from the wealthy to the less affluent. Berrios also was criticized for taking contributions from property tax attorneys, associated businesses and for skirting county nepotism rules.

Kaegi trounced Berrios and promised to revamp the models the county uses to value properties and make valuations closer to fair market value and more uniform. Two years later, in 2020, Kaegi’s home turf — the south and west suburbs — were up for reassessment.

That year, his office said, Kaegi realized the valuation of his home did not reflect its true square footage. In 2014, the Kaegis applied to build an addition to the rear of the home, village records show. He requested the field check six years later and after being elected to public office “to ensure the correct square footage and the most accurate assessment of his home,” a spokesperson said. The 2020 survey boosted his total square footage from about 3,200 square feet to about 3,900 square feet.

Arthur Lyons, a retired professor of economics who specialized in taxation policies at the University of Illinois at Chicago, speculated Kaegi sought the field survey a decade after buying the property because “once he becomes the assessor, he realizes that you’re in the public limelight.”

“And so, you want to make sure that at least your assessment is correct, especially if you ran as a reform candidate,” Lyons said.

Permits for such improvements are passed on from the village to the township assessor and then to the county assessor. Oak Park Township Assessor Ali ElSaffar said the permit was successfully received by the county assessor’s office at the time. When Berrios’ office received it, Kaegi was automatically given a home improvement exemption as well, which waived the tax on up to $75,000 of the added improvement for up to four years.

That exemption fell off in 2020. The added square footage from the field check also was plugged into the 2020 residential model that compared Kaegi’s property with roughly 400 others in his neighborhood as well as recent market sales of similar homes. In the end, the assessment shot up by 61% compared with 2017.

Meanwhile, other 2-06′s in Oak Park saw an average decrease of 1.5% in 2020. That’s in part because that year, Kaegi’s office instituted a COVID adjustment, reducing assessments for homeowners by roughly 8% to 12% across the board to account for the expected impacts of the pandemic. In Oak Park, that adjustment was 8% to 9.5%, depending on neighborhood.

As a result of the massive assessment hike compared with his neighbors, Kaegi’s tax bill climbed too: from about $28,000 in 2019 to nearly $43,000 in 2020, county tax records show. His house had the seventh-highest value of its class in Oak Park, up from 227th the year before.

Since 2019, records show, Kaegi also has taken the rare step not to appeal his assessment to try to cut his bill, nor has he taken a homeowner exemption to which he is entitled.

Appeals among owners of higher-priced homes were a key contributor to unfairness under previous assessors.

A Tribune and University of Chicago analysis of residential appeals between 2009 and 2015 found statistical measures of fairness got worse after the appeals process, placing a financial burden on those who could least afford to pay more. Wealthier neighborhoods appealed at much higher rates and regularly won, even though homes in those areas were more likely to be undervalued.

By 2023, the effects of that COVID adjustment wore off and the fresh assessments reflected a white-hot, pandemic-era housing market. While other assessments rose, Kaegi’s value was revised downward.

ElSaffar said Kaegi’s 2023 value falls “pretty much in the middle of the pack” when its value per square foot is compared with other properties of the same class, in the same neighborhood, and of roughly the same size.

Lyons said the comparable housing properties associated with Kaegi’s 2023 reassessment raised questions about whether Kaegi was overassessed. Prior to his 2020 increase, Kaegi’s housing value was in line with the other larger properties when it should have been below them.

“If you started out with that additional square footage (that was added in 2020), he should be in line with the (comparable properties) all the way across the chart,” Lyons said.

Lyons said it indicates Kaegi had been previously overassessed and then was massively overassessed in 2020 to reflect the additional square footage. The fact that assessments of those comparable properties caught up with Kaegi in 2023 reflect that the assessor “is catching them up to the market.”

It’s unclear what this year’s 5% reduction will mean for Kaegi’s upcoming bill, his office said. The full implications won’t be known until later this year and will depend on levies set by various taxing bodies as well as others’ appeals.

The tale of Kaegi’s 2020 increase, largely due to his decision to have his property reevaluated, is rare. Property owners have little incentive to rat themselves out if they believe the outcome would be a higher assessment and likely a higher bill. Homeowners are technically required to tell Kaegi’s office during each reassessment if the characteristics the office is using are wrong. But the threat of a clawback is also rare. The office said those are usually pursued only if the homeowner appears to be concealing something.

That’s what happened when the Tribune reported on the case of Todd Ricketts’ Wilmette home, which was razed and replaced with a 5,000-square-foot mansion.

Ricketts, one of three siblings on the Chicago Cubs board of directors, paid taxes based on the value of the much older and smaller house that he tore down — giving him a huge discount on his property tax bill over several years. In 2013, Ricketts’ attorney had a chance to tell county officials about the new home during a property tax appeal but instead sought a reduction based on the age and size of the old house. That led to investigations from both the assessor’s office and the county Board of Review.

To try to catch other potential properties where square footage and other improvements aren’t reflected in records, Kaegi’s office said it is working to hire more field inspectors to look at buildings in person and utilizing technology that can scan aerial images of buildings to look for changes.

Lyons said that, by far, Kaegi is an outlier, and that the vast majority of his neighbors appealed — often to the detriment of those who didn’t appeal or receive a reduction, which is an consistent criticism of Cook County’s assessment process.

“Let’s assume they didn’t appeal. Are these people picking up the tax burden for everybody else who plays the system?” Lyons asked. “It’s a system where those who take the initiative, who have the resources, the time, the energy, the knowledge to make an appeal, they get reduced and then they are directly shifting the tax burden.”

“It’s not like the income tax, where, if I cheat on my income taxes, that doesn’t make (others’) income taxes go up. But if (someone) gets a lower assessment than they should have we, all the rest of us, pay higher taxes,” he said. “It’s an indirect transfer of wealth, and it’s a travesty when you think about it.”

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aquig@chicagotribune.com