Chicago suburbs without property taxes – but perhaps not for much longer

In a region known for high property taxes, at least a few suburbs outside Chicago have no property taxes:

A town of about 40,000, Carol Stream managed to avoid a property tax even when another outlier, Schaumburg — a village with a much larger retail base — took the leap during the Great Recession.

But officials say Carol Stream is facing significant budget pressures from rising pension costs. If it maintains the status quo, projections also show the village would exhaust capital reserves during the third year of a five-year plan for roadwork and infrastructure projects…

In Oak Brook, another town that doesn’t charge a property tax, candidates in the last mayoral race took stock of the financial challenges from flat sales tax revenues. Carol Stream also saw a 2.4% drop in sales tax dollars — the village’s largest revenue source — from calendar years 2017 to 2018.

Suburbs have multiple ways to reduce or eliminate residential property taxes. Sales tax revenue can come from shopping malls, big box stores, and other retail options. Schaumburg and Oak Brook have sizable shopping malls surrounded by many more retailers. Communities can also seek out industry; Carol Stream founder Jay Stream intentionally set aside much land for industrial parks (which are still there). Some suburbs would not like this as industry could conflict with an ideal of quiet neighborhoods of single-family homes.

The article suggests these suburbs with no property taxes will have to reconsider because of declining sales tax revenues and rising pension costs. Given the fate of shopping malls and the problems facing retailers, even in successful malls in wealthy areas like in Oak Brook and Schaumburg, communities need additional revenue.

Suburbs typically do not have the ability to quickly counter declining sales tax revenues. In order to not have property taxes in the first place, certain decisions had to be made long ago. Then, later decisions build within a framework of no property taxes. Making changes to land use takes time for study, approval, development, and then reaping benefits. A suburb cannot say it wants to bring in more sales tax revenue and line up a set of retailers operating within a year.

The fate of these suburbs will be worth checking in five years to see whether they can hold on against levying property taxes.

(Reminder: this does not mean residents in these communities do not pay any property taxes. Rather, their suburbs do not collect property taxes even as school districts and other taxing bodies do.)

Building a suburban truck stop in Carol Stream

Many truck stops line American highways yet few are located several miles away from the highway in a suburban community on the former site of a bowling alley:

Though it looks like a heavy construction zone, it could take weeks before developers begin building what some neighbors worry will be a noisy truck strop on Gary and North avenues in Carol Stream…

“It’s kind of a redevelopment of Carol Stream going on here,” Assistant Village Engineer Bill Cleveland said…

In July, the village board approved Pilot plans over the complaints of retirees in the upscale Windsor Park community. The $9 million project will build a sprawling gas station for semitrailer trucks and passenger cars, as well as a 9,000-square-foot building that will house a convenience store and three “fast casual” restaurants — all open round-the-clock.

After the village gives the go-ahead, developers hope to break ground in “days or weeks,” a Pilot representative said Tuesday. Construction could take three months.

North Avenue is a busy road yet the location is at least four miles from the nearest highway – I-355 – which doesn’t handle the same level of truck traffic as other major Chicago highways. On the other hand, Carol Stream has a number of industrial parks and warehouses. This was intentional on the part of founder Jay Stream who had his start building houses in Wheaton and later turned to grander plans for a new suburban community. Stream wanted to have a broader tax base so he left plenty of land for industrial parks. The zoning map of Carol Stream shows a broad stretch of industrial uses – marked in purple – as well as commercial properties along major roads and a range of housing options including apartments and cul-de-sac single-family home neighborhoods.

Thus, there may just be a business opportunity for a suburban truck stop in this particular location. Two remaining thoughts:

  1. I have a hard time imagining such plans could be made in wealthier suburbs. Could Pilot find support in a community like Elmhurst or Naperville which could provide a location much closer to a highway?
  2. I wonder if there will be any particular requests from Carol Stream regarding the design of the facility. Seeing a truck stop in this location could be jarring, even with North Avenue lined with numerous commercial uses in both directions. I wouldn’t be surprised if the owners were asked to limit signs and lights as well as provide some barriers between this location and nearby uses.