For really strong appreciation you need some type of major transportation hub or booming employment, neither of those are present in that area. It’s flawed thinking to assume that, because it’s close to a city and it’s low, it’ll go up (at least not in any term that will benefit you).
To your tax point, these are owners not renters, renters don’t pay taxes. I think people who are leaving Illinois are moving because yes, it is crowded and there’s always some instability (politically, violence, corruption, etc), yet those leaving are moving to booming cities like Nashville, Charolette & Raleigh, Atlanta and states like Oregon and Colorado as well as the coasts.
There’s plenty of places closer to the city that cost less than city prices to rent, why would a tenant want to make your commute? Not to mention the tenant quality you’ll be attracting who commute from Hammond to Chicago just to save an extra hundred or two in rent over Berwyn/Cicero/ Rogers Park/ Bridgeport, Schaumburg, Evanston, etc.
With that said, Indiana has some of the most landlord friendly laws in the US. If you’re buying a house for yourself because you want the space for less then by all means. I’m not saying don’t buy real estate in IN, just don’t buy in Hammond thinking it’ll appreciate because of proximity to Chicago.
