Private investors are exploiting an “arcane” Illinois law to profit from the property tax debt owed on thousands of properties, fueling disinvestment in communities that are home to Black and Latino residents, according to a new study from the Cook County Treasurer’s office.

Thanks to a “little-known loophole,” hedge funds, private equity firms and real estate investors have “siphoned” approximately $280 million from schools, parks, libraries, fire departments and other government agencies between September 2015 and September 2022 in accordance with a law passed in 1872, according to the study, authored by Todd Lighty, deputy director of research affairs for the treasurer’s office and a former Chicago Tribune reporter.

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