Thursday, October 09, 2008
Mayor Daley Calls Appraisal System Fraudulent
Today, Chicago Mayor Richard M. Daley called the Property Tax Appraisal system fraudulent. In one specific neighborhood (Englewood) which has a sizable percentage of low-income households, the idea of having homes appraised at $300-$400K+, proved to be implausible even for a revenue hungry politician with a budget shortfall. Daley called for the Cook County tax assessor's office to revise and reassess how they arrive at those valuations. Daley is also calling for the IL State legislature to temper the rate at which property taxes can increase from year to year.
Part of the problem with the Cook County assessment system is that the current tax bills are based on assessments taken in 2006, before the current housing slide. [See the CBS local video of Daley's news conference.]
Well, Mayor Daley is right, the property appraisal system is fraudulent. However, he-- like a lot of other politicians & municipal officials across America, created a climate that enabled and encouraged this kind of greed to spiral out of control.
See, every Chicago Alderman (along with Daley) wanted new development and housing renovation in their neighborhoods to thrive-- rightly so. If housing values and construction numbers went up in a neighborhood, so too did (in theory) the tax base of their Ward. And what politician doesn't want to be seen as presiding over growth, expansion and wealth building in their own community? The Chicago Alderman-- along with Mayor Daley, wanted to also get the credit for this regeneration-- especially in previously depressed urban areas.
Also understand, the rise in property values means a rise in taxes, fees and income for ANY City, including a big city like Chicago. Mayors (and City Councilmen) want their budgets to be balanced, but they also want to add programs that get them re-elected. This had/has the obvious potential for a conflict of interest -- if left unregulated, to create problems over the long run. Of course, we know this is exactly what happened nationwide, on a much larger scale.
But as the race to increase development (and construction) in each Chicago neighborhood moved forward, so too did the greed meisters feeding the entire process.
I have a professional friend who confessed to me the other day that when she was looking for her house (just a few years ago), she felt the Mortgage Broker, Assessor and the Realtor had grossly overpriced the property. So she asked the assessor how they had arrived at the value of the property, and the person was stupid [brazen, really] enough to admit, "..well, this is the amount we think you personally qualify for". A STUNNING ADMISSION of GREED.
Alas, here we are at a situation where REALTORs, BANKERS, Assessors et.al., are ALL COMPLICIT in not valuing the property at what its market rate is, but what they think they can milk the would-be home owner for. It's not about the cost to re-build that house-- heaven forbid, should a calamity strike. It's about what the sleeze-bag mortgage company/bank and the Realtors can pocket in the way of profit-- regardless of what the house is actually worth.
This current American Housing/ Mortgage Crisis is nothing more than a story of American GREED & THIEVERY. And that is why you now find your house values are sliding down. And THEY SHOULD go down, because it's apparent they've been over-valued from the beginning (or least since about 1980).
In the next few weeks, I'll post pics of homes that I KNOW are over-valued.
When are you home owners gonna learn, that buying an over-valued house (OR OVERPAYING FOR HOME REMODELING) is like paying $40,000 for a $19,000 car? You are the one getting screwed. Not the seller.