This post was inspired by a post by Mike Shedlock, linked in comments by a regular commenter. In his post Mish gives a beginner’s introduction to Chicago’s distinctive style of corruption, pointing out a few big winners from Rahm Emanuel’s recent recordbreaking property tax hike. As should be surprising to practically no one the list includes some very highly placed Illinois politicians.
Mish has pointed out some of the winners. I thought I’d reflect on who the losers might be. Consider the graphic above, thoughtfully provided by Zillow. The zip code I’ve highlighted, 60647, is the Logan Square neighborhood and parts of adjoining Buck Town. As you can see as of 2014 36% of properties in that zip code had negative equity and property values averaging $271,000. The owners of those properties lose. They can’t sell without taking a bath and their property taxes will rise.
Homeowners in my zip code have nothing to worry about. About 12% of us are underwater and we can afford the tax hike.
Now look at where most of the properties with negative equity are. They’re on the West Side and the South Side. Renters in those areas lose, particularly if they live in multi-family residences because a) the tax will hit those properties and b) the tax hike will be passed on to them by their landlords.