Vincent Kolber, Republican candidate for the 5th District U.S. House seat, said several factors can explain Chicago's drastic decline in housing sales recently, one of which is high property taxes.
Kolber is facing incumbent U.S. Rep. Mike Quigley (D-IL) who has represented the 5th District since 2009.
“There is no question that the increases in property taxes have hurt the real estate market here,” Kolber told North Cook News. “Anybody looking at a new home in Chicago is going to say ‘well, you’re asking too much’ or ‘I’m just not going to buy’ because the tax rates go up.”
Kolber said that while high property taxes are probably the most significant factor in explaining why the housing market went down in Illinois, there are other causes that also have contributed to the decline.
“I think there are several things going on,” Kolber said. “Number one, with respect to Illinois itself, we know that – or we have some information – the population here is shrinking. More people are moving out of Illinois at the moment than moving in. That is affecting overall demand.”
Another reason why people are buying fewer houses in Chicago is the lack of confidence in the markets, Kolber said.
“There is so much uncertainty about the economy and what is going to happen down the road," Kolber said. "I think that the presidential election itself has created a lot of uncertainty.”
Third, Kolber said the economy itself being at a near standstill has affected the market.
“We had a second quarter report just last week that our economic growth is about 1 percent,” Kolber said. “It was way less than that in the first quarter. So on average, we are under 1 percent right now, and that is across the whole country.”
Kolber also said that if the overall economy of the nation is growing that slowly, then the economy in Illinois is likely growing at zero percent or less.
Kolber also noted an indicator of an economic slump: railcar loads. A businessman who is involved in transportation and rail, Kolber has noticed a reduction in rail freight-car loads.
“Rail freight-car loadings across the country are down 7.3 percent year on year,” Kolber said. “So that’s an indicator that the industrial, the manufacturing, the commodities, the food industry, the chemicals…all those industries that rely on rail transportation are in a decline right now.”
Kolber said these indicators all lead to one thing: recession.
“I think that we’re borderline heading into a recession,” Kolber said. “We’re -- more likely than that -- already beginning a recession in Illinois, and that is why the housing demand is suffering here.”
Kolber said the state already has entered or is stepping into another recession because of the way Illinois is behaving relative to the rest of the country in areas such as population growth, employment rates and taxes.
The state, in its current direction, cannot avoid a recession, Kolber said.
“The state, as far as Illinois in a recession-type situation…there is almost nothing the state can do to prevent it because we are in a complete impasse in Springfield with respect to resolving the fiscal crisis here,” Kolber said. “Without a change in the tax situation here, both property and income tax, there is really little Springfield can do."
Kolber said that while he would like to see changes to the state, he said it is impossible because of the politics in the state.
“You would try and do things like get your sales tax rate (reduced) – all these things that you would normally do,” Kolber said. “(But it is) just politically out of the question here because Springfield is owned by a party who believes they can tax and spend their way out of economic issues.”
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