Sandra Haswell

News Articles

I've selected the following articles as "recommended reading" to keep Buyers and Sellers informed about current news items and legislation.
Letter: ANDERSONVILLE CHAMBER OF COMMERCE   Back to Top
Dear Andersonville businesses,

As you know, the recent property assessment increases, and the tax based on them that will be coming next year, could have dire consequences for businesses in our community. We were fortunate this week that Crain's Chicago Business published a letter to the editor I wrote to them about this issue. Crain's is a publication that policy makers read, so hopefully it will have an impact.

Our community is going to have to do some advocacy around this issue; if our commercial rents skyrocket, the Chamber's regular efforts in marketing Andersonville, special events, assistance to businesses, etc., may be a moot point. And to help educate everyone about why the burden is so heavy on small business, I offer these points:

  1. The current system works against building strong, local retail districts by punishing commerical landlords for keeping their rents low. If a building's rents are too far below what the County Assessor's office determines are "market rates" for the neighborhood, the building will be assessed at what the Assessor believes the rents should be, forcing landlords to raise rents in order to pay their tax bills. This is terrible for communities.


  2. The property tax burden on commercial properties in Cook County is double that in the rest of the state. That's because Cook County lowered the assessment rate for residential properties some years ago, in an understandable effort to help keep people in their homes. When they did this, the commercial and industrial assessment rates went up to slightly higher than the rest of the state's, in order to compensate. However, the state "equalizes" Cook County's assessment rates by multiplying them by approximately 2, in order to bring the county's residential assessment rates up to the same level as the rest of the state. The same multiplier is applied to commercial and industrial properties, bringing their assessments to about double everywhere else in Illinois.


  3. Property taxes (and other taxes) affect small businesses disproportionately because many large businesses are able to take advantage of a myriad of tax breaks and public subsidies that are offered to them. Countless studies are now showing this to be faulty public policy, as the jobs and revenues promised by big businesses in exchange for the subsidies rarely come close to expectations. Small, local business still remains the largest source of jobs and provider of new jobs. And as we know from the Andersonville Study of Retail Economics, locally owned businesses keep far more money in the local economy.
The boards of both the Chamber and the Andersonville Development Corporation will be exploring these issues and advocating hard with our elected officials in the next few months. Business and property owners would be wise to attend community meetings, write letters, and speak up about this. There are a number of viable tax reform options being floated out there. Any number of them would be an improvement.

One bit of great news. At an Edgewater Community Council meeting last night, the residents expressed their commitment to advocate only for the "7% cap" on residential assessments, but also for solutions that will save our commercial district. They really "get it" that a healthy commercial district is as crucial for a healthy community as affordable housing. One possibility discussed is a 7% cap on ALL properties.

Please feel free to contact me, Ellen Shepard or Mark Walden at the Andersonville Development Corporation with questions. And if you or your landlord have not yet filed an appeal on your building's assessment, please do so. The deadline is June 29.

Ellen Shepard, Executive Director
Andersonville Chamber of Commerce

Link: DOES THE REFUSE REBATE APPLY TO YOUR CONDO DEVELOPMENT?   Back to Top
This link provides information and application forms regarding a refuse rebate, for those who qualify, from the City of Chicago for condominium developments paying for their own scavenger: www.chgofinancecomm.chi.il.us/Condo/
Headline: SINGLE-FAMILY HOME SALES UP 1.7 PERCENT   Back to Top
The Illinois single-family home market in January started the new year in stride, with sales up 1.7 percent. According to the Illinois Association of REALTORS latest report, single-family home sales were up 1.7 percent in January 2005 to 6,247 homes sold, compared to 6,144 sales in January 2004. The median price of a single-family home in January was up 8.7 percent to $179,400. "Winter weather conditions usually influence housing activity but REALTORS report better-than-expected sales for this time of year and continued price gains," said John Veneris, CRB, CRS, president of the Illinois Association of REALTORS. "Long-term mortgage interest rates remain surprisingly low--despite actions taken by the Federal Reserve in the last eight months--and the rates continue to attract first-time buyers to the housing market." In January, 2,920 condominium sales were reported, up 22.7 percent from 2,379 sales in the same month last year.

The 30-year fixed-rate mortgage averaged 5.71 and 0.5 points (for the North Central Region) for the week ending Feb. 25; it averaged 5.64 percent and 0.5 points the previous week, according to the Federal Home Loan Mortgage Corporation. Last year at this time it was 5.65, 0.5 points. "Mortgage rates moved up for the second week in a row on concerns about a pick up in inflation showing up in raw materials," said Frank Nothaft, Freddie Mac chief economist. "Sales of existing homes in January are expected to be a little lower than they were in the previous months, but continuing low interest rates will keep the housing sector active for some time to come." Credits: © Illinois Association of REALTORS March 1, 2005

Headline: ILLINOIS REALTORS HALF WAY TO $1 MILLION FUNDRAISING GOAL FOR RPAC   Back to Top
The Illinois' REALTORS Political Action Committee is among the strongest in the nation thanks to the combined efforts of REALTORS at the grassroots level and IAR's highly skilled lobbyists. Speaking last week before a crowd of RPAC Major Donors ($1,000 and up), IAR President John Veneris said: "The power and influence of our REALTOR organization is strengthened by the contributions of our members to RPAC. Our goal this year is to surpass the $1,000,000 fundraising plateau. We can reach this goal with the continued support of our Major Donors as well as from the contributions of all of our members." Madelyn Staack, chair of IAR's Political Fundraising Working Group added: "There are several levels of contribution, from the $50 Silver Inner Circle all the way up to a Major Donor. Every dollar is important. Please spread the word about RPAC and make a donation not until it hurts, but 'til it feels good!" Credits: © Illinois Association of REALTORS March 1, 2005
Legislation: LEASEHOLD IMPROVEMENT DEPRECIATION   Back to Top
(excerpt from the National Association of REALTORS newsletter: RCA Report (REALTORS Commercial Alliance, Fall 2004 issue)

Summary of Content Last Action Status
Seeks to lower the depreciable life of tenant leasehold improvements in nonresidential buildings from the current 39 years.

NAR position: The depreciation period should be reduced to more accurately reflect the true useful life of tenant improvements in the marketplace.

 The House/Senate conference version of H.R. 4520 includes a provision that shortens the recovery period for leasehold improvements on nonresidential property from 39 years to 15 years. The provision applies only to assets placed in service from enactment through Dec. 31, 2005. It's uncertain whether this compromise bill will be voted on before or after the election. Even though the provision on leasehold recovery is temporary, its inclusion in H.R. 4520 in an important benchmark toward permanent leasehold-improvement reform.

Research: DATAPoints   Back to Top
(excerpt from the National Association of REALTORS newsletter: RCA Report (REALTORS Commercial Alliance, Fall 2004 issue)

16.9 million
square feet
Office space
absorbed in second
quarter 2004, the best
performance since
December 2000.		 Over $210
billion
Invested into U.S.
and European
commercial real
estate last year.		 15.1%
versus 9%
15.1% was the highest
rate of return in 2003
posted by South Africa
compared to 9% in
the U.S.		 $12.2
billion
Commercial
real estate sold
by auction in
2003.		 43%
increase
In the sale of multifamily
investment property
in the first half of 2004,
despite expectations for
rising vacancies.
Credits: (from left) NAR Research Dept. Office Market Forecast (available free to NAR members at Realtor.org under Research), ResearchWorldwide.com, Investment Property Database, National Auctioneers Association, NAR Ressearch Dept. Multifamily Market Forecast (available free to NAR members at Realtor.org under Research)

Headline: IS YOUR TENANT A TERRORIST?   Back to Top
(excerpt from the National Association of REALTORS newsletter: RCA Report (REALTORS Commercial Alliance, Fall 2004 issue)
SECURITY WATCH
Tenant screening and evaluation have been long-established practices in both multifamily and commercial properties. But in the wake of Sept. 11, the goal of screening is distinctly different.

"It used to be that the ability to pay was the only major criterion for a tenant. Now commercial owners have to take a harder look at what companies do and any limitations or risks that may pose," says Sal Lifrieri, president and CEO of Protective Countermeasures and Consulting Inc., and former director of security and intelligence operations for New York City's Mayor Rudolph Giuliani.

Unlike financial institutions, commercial real estate owners and managers are not responsible for implementing a Customer Identification Program or for meeting other anti-money laundering provisions of the USA Patriot Act. However, real estate professionals are covered by Executive Order 13224, which prohibits any business from entering into business relationships with SDN entities listed on the Specially Designated Nationals and Blocked Persons list at The Deparment of the Treasury.

An SDN check is often included as part of a personal credit check, but larger commercial companies may find it desirable to purchase special interdiction software for this type of screening.

Another critical piece of identification that commercial owners and managers should require of every prospective residential tenant is a Social Security or Individual Tax Identification number, which are available to both U.S. citizens and resident aliens legally entitled to work in the United States. ITIN numbers, which are issued by the Internal Revenue Service, are available to non-citizens who need to report income for tax purposes, but are not eligble for SS numbers. Social Security numbers - but not yet ITINs - can be verified electronically through such major credit reporting agencies as Equifax and Experian.

"By requiring that all prospective residential tenants have either an SSN or ITIN and a driver's license or passport, you're able to do what I call 'verification by proxy'," says Robyn Guidara, director of training and corporate development for RegistrySafeRent in Rockville, Md. "Because - at least in principle - state and federal issuing agencies will have verified immigration status before granting these documents, you have some assurance that a tenant's citizenship records and identity are correct," she says.

In the case of residential tenants, it's also important to ensure that a company's identification verification policies don't violate Fair Housing regulations, warns Guidara. Apply the same procedures to every applicant as a protection against charges of discrimination. Also review Department of Housing and Urban Development regulations that define what types of documents are acceptable.

Christopher Falkenberg, president of Insite Security in New York City, suggests looking at a new company's articles of incorporation and other corporate documents and confirming them with the state of incorporation.

Many of the same practices you'd use in hiring an employee, such as checking references and recent or pending lawsuits, can also provide valuable information on commercial tenants, suggests Lifrieri. When doing this type of screening, also consider whether a company might be a likely target for terrorism or violent demonstrations. A good overall manual is Preparing for Terrorism published by IREM ($40 plus tax & shipping at 800/837-0706).

Any odd behavior should also trigger concerns. "If you're leasing to a company that would normally operate 9 to 5, and they're asking you questions about access at 2:00 am, it should raise a red flag," says Lifrieri. Ultimately, the most important element in successful tenant screening is to be concerned. "The rule is, 'Don't heistate to make the call'," says David Cid, president of Salus International. "It may be nothing, but in the post-9/11 era, the government will take you seriously."

Six Screening Tips
No one factor is a sure-fire indication of trouble, but several combined should raise your suspicions, says David Cid.
  1. BE SURE ID IS CURRENT. Look at expiration dates, and add a note to your tenant tickler file to recheck near the time a document expires.
  2. LOOK FOR MISALIGNMENTS, raised letters, misspelled words, or fading that might indicate a forgery.
  3. GET A COPY of the passport or driver's license and keep it on file.
  4. LET YOUR MIND BE COGNIZANT of anything that seems inconsistent. Don't just ignore your instincts.
  5. BE SUSPICIOUS OF CASH. There may be a good reason, but most people conduct major business transactions such as rent payments in other ways.
  6. WATCH FOR TENANTS who seem to avoid contact with you or other tenants.
For a copy of the complete article email me at SandHaswell@clear.net