Local

For the Record – Co-ops a Plus to All of Park Forest


john-ostenburg-05142007.jpgCommentary

By John A. Ostenburg
Mayor, Village of Park Forest

A letter to the editor appearing in the Sunday, October 21, edition of a local newspaper once again misrepresents the relationship of the Park Forest housing cooperatives to the remainder of the Village. Though I and others have made numerous attempts to correct the misrepresentation of facts being generated by some persons, they continue to make inaccurate statements, almost with the attitude of “Don’t confuse me with the facts.”

Let me again acknowledge, as I have in the past, that a major problem did occur in 2005 when co-op property taxes were reduced to levels far below what had been paid in years previous. The problem came about as an “unintended consequence” of legislation that had been passed by the Illinois General Assembly. Neither the Village of Park Forest nor the housing cooperatives had any role whatsoever in that legislative action and both were shocked to learn of the effect it had on Park Forest property taxes.

The Village successfully worked with the co-op boards and with the Cook County Assessor to have that issue resolved. Four of the five co-ops made voluntary payments in lieu of taxes that equaled the amount their taxes had been reduced. The Assessor’s Office corrected its processes so that the error did not occur again. The tax bills of 2006 raised co-op property taxes to a level even higher than they had been before the error of 2005.

In her recent letter, Katherine Armstrong alleges that the method of establishing co-op property taxes is “illegal,” but that is incorrect. State law requires that co-ops be assessed by the same method used for single-family residences, which is value based on selling price. Since the right to live in an individual co-op is based on purchase of a share of stock in the co-op corporation, and since the cost of those shares is lower than the cost of single-family homes, co-op property taxes are less than single-family property taxes. This method is no different than one which sets the taxes for a new home with five bedrooms at a higher level than an older home with two bedrooms. Both are determined based on sale value.

Ms. Armstrong is correct that the Village challenged the legality of the co-op property taxes in protests filed with various tax appeal bodies. However, she fails to point out that those efforts were unsuccessful, based on the appeal boards’ interpretation of the law. In fact, in some cases, the Village’s challenge resulted in the property taxes for co-ops being reduced to levels lower than they had been before.

On the advice of the Village’s attorneys, therefore, the protests were dropped. Legal counsel advised the Village Board that by pursuing these protests, the Village would incur large legal costs with little hope of increasing the property tax levels for the co-ops.

Housing co-ops are not-for-profit corporations, which means that no one makes a profit on their operation. This distinction separates them from private landlords renting the same types of parcels to tenants. Furthermore, co-op owners are required to pay a monthly carrying charge for as long as they reside in the cooperative. As stockholders in the corporation, they have the power only to sell their individual shares of stock. On the other hand, should the shareholders ever collectively decide to sell the entire complex at one time – thereby no doubt seeing much more return on their investment than they would see by selling their individual shares of stock – they would be taxed accordingly.

For the last several years, the housing cooperatives have been a major asset to our Village. They have invested large sums of money into maintenance and upkeep, which means that block-after-block of multi-family residences built in the 1940s have the appearance of attractive and vital communities. Demands for Villages services – including water and sewer line maintenance, building inspections, police response, fire and paramedic services – all are much lower in the co-op areas than in the rest of the Village because of the on-going investment in infrastructure and self-policing that the co-ops perform.

This saves all Village taxpayers because less Village funds must be spent on these services.

The co-ops have no absentee landlords because of their corporate structure. The co-ops have provided an opportunity for many current single-family residents to save money on housing as a means of building the necessary nest-egg for eventual purchase of their single-family homes. The co-ops have given many senior citizens, single heads of households, empty-nesters, and others the opportunity to remain in the community they love, and to do so affordably and in excellent housing. I am appalled that some individuals want to destroy this good relationship that has existed in our Village for more than 40 years, just to achieve their personal political advantage.

At present, co-op sales are lower than they have been in the recent past, and I am fearful that the controversy that has been generated by some individuals’ inaccurate statements about the co-ops may be part of the cause. Should the co-ops ever lose value to the point of no longer being able to operate as they do currently, the loss to the Village would be not only in reduction of property taxes but also in the loss of affordable, quality housing, housing that presently is an enhancement – rather than a detriment – to our Village. I prayerfully hope that never happens.

The writer is Mayor of Park Forest.


ARCHIVES