Riverside’s village board is considering upending a longstanding policy of opting out of a tax assessment freeze program that incentivizes rehabilitation of older, particularly historic homes.
According to Sonya Abt, the village’s community development director, the village of Riverside is only Illinois municipality that opts out of the program, which is administered through the Illinois State Historic Preservation Office.
In addition, she said, both state and national agencies have expressed concern that Riverside’s national landmark designation may be jeopardized if enough older homes, which contribute to the landmark designation, are demolished and replaced with new construction.
The Riverside Preservation Commission in August voted to recommend that the village opt in to the program, something village boards have avoided since the early 1990s.
“This program would be most beneficial probably for your larger properties,’ said Abt, summarizing the Preservation Commission’s recommendation for the village board at its Dec. 7 meeting.
The tax assessment freeze could have been beneficial to the new owners of the bedroom wing of the Coonley Estate, designed by Frank Lloyd Wright, to offset the cost of extensive renovations there.
The property had sat vacant and deteriorating for several years before being rescued in 2015.
“This could have been a program that could have been helpful getting that taken care, perhaps, sooner,” Abt said.
In order for a home to qualify for the assessment freeze, it must be a designated local landmark, listed on the National Register of Historic Places or be located in a historic district.
The home has to be owner-occupied and the rehabilitation project’s budget must exceed 25 percent of the home’s fair market value as determined by the county assessor. The rehab also must meet standards laid out by the U.S. Secretary of the Interior.
If a home is accepted for the freeze, the property’s assessment is frozen at the pre-rehabilitation level for eight years and then stepped up evenly over the next four years.
Part of Riverside officials’ reluctance to opt in to the program in the past 25 years has been that while the assessments are frozen on the rehabbed historic properties, the overall tax levy remains the same, so all other Riverside property essentially subsidize the freeze.
Another part is that all of Riverside is a historic district and about 80 percent – as many as 2,900 — of its homes are considered contributing to the village’s historic landmark designation.
However, the experiences of other towns with numerous historic buildings and/or historic districts indicate that just a fraction of homeowners who might qualify for the assessment freeze follow through with it.
In Oak Park, about 4 percent of homes located in historic districts (157 of 3,638) have earned the assessment freeze. The same percentage was recorded in far west suburban Geneva.
If those kinds of percentages hold true for Riverside, about 115 homes might receive the assessment freeze.
Before considering opting into the program in 2018, Riverside trustees have directed staff to determine just what the tax burden would be to the rest of the community’s property owners if that many homes qualified for an assessment freeze.
Harder to quantify would be the resulting benefit of having that many historic or contributing homes sensitively rehabilitated.
“There’s no question that the rest of the taxpayers will subsidize that difference,” said Trustee Doug Pollock, who said he was inclined to vote to opt in to the freeze program. “There’s no question, too, that the other taxpayers will benefit from that investment.
“Is the subsidy offset by the improvement to the community?”
Either way, trustees must vote either way before the end of January 2018.