The west-side slumlord doesn’t want to pay property taxes on his shabby old tenement. So after five years, he owes Cook County about $150,000 in back taxes. County officials post the building at a scavenger sale for tax-delinquent properties, just as the law requires.
“The system is filled with loopholes that enable owners to avoid paying their property tax,” says Scott Lancelot, a member of the task force and director of redevelopment for the nonprofit Neighborhood Housing Services. “We’re talking about property in low-income neighborhoods that have been ignored. No one’s really watching what goes on there.”
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The few who do invest in poor neighborhoods are by and large either speculators dreaming of a transformation like the one in Lincoln Park, where soaring rents and property prices drove out the poor, or slumlords. Both kinds of investor tend not to maintain their properties, and they don’t give a damn about the people who live there. That’s how the task force sees it, anyway.
“The way they make money is to milk a building,” Lancelot adds. “They take the rent out and put nothing in.”
In addition, there is a redemption period in which the tax-delinquent owners can pay up and get their property back. Owners of a residential property with less than seven units have two years after the scavenger sale to redeem their property by paying the back taxes. Owners of larger residential properties (and commercial and industrial properties) have a six-month redemption period.
Sometimes a stranger could unwittingly help a tax-delinquent property owner escape the tax man. Shaw explains, “The delinquent owner will approach the new owner after the auction and say: ‘Listen, you don’t need these headaches. You bid $5,000 for that building. I’ll give you $7,000 for your troubles.’ Chances are the new owner will go along. He’s making $2,000, and the old owner has his tax debt cleared for cheap.”
“I guess as long as there are people with imaginations, there are going to be new schemes attempted,” says McNulty. “But we think our proposals will provide the county with effective methods to eliminate the abuses.”
