By Micah Maidenberg
September 8, 2010
When a bank forecloses on a home, the impact is felt by more than the borrower.
Foreclosures radiate outward. Lawns don’t get mowed, maintenance is deferred, and empty homes with boarded-up windows are prime targets for vandalism. Property values decline — each home within 250 feet of a foreclosure loses 1 percent of its value due to the dispossess, according to one study, and the worth of the seized home itself sinks by 27 percent. When a few foreclosures cluster on a single block, entire neighborhoods swing into reverse. Gloria Warner, a member of the community group Action Now, described at a press conference yesterday how foreclosures are socking her community in West Englewood:
Foreclosures have hit Warner’s West Englewood neighborhood hard; 243 of them were filed there in the first half of this year, according to the Woodstock Institute. The Neighborhood Stabilization Program (NSP), a federally-funded effort, was designed to help tackle the dramatic rise in foreclosures in distressed neighborhoods here and across the country. NSP granted funds to cities — Chicago got two grants worth $55 million and $98 million — to purchase foreclosed homes and hire developers to remake them for sale or rent.
But NSP hasn’t been able to reach all of the neighborhoods it identified for assistance in Chicago, including West Englewood. Zero properties in the neighborhood had been acquired under NSP, as of July 30, for rehabilitation.
That number comes courtesy of “A Drop in the Bucket: An Analysis of Resources to Address Home Foreclosure in Chicago,” (PDF) a new report the Sweet Home Chicago Coalition released Tuesday. The report argues that NSP’s resources aren’t commensurate with the scale of foreclosures in Chicago. Julie Dworkin, policy director for the Chicago Coalition for the Homeless, made the case at a press conference Tuesday:
The Sweet Home Chicago Coalition will use such findings to argue for the affordable housing ordinance it has been pushing for in City Council. The group plans to connect the Sweet Home legislation — which would require the City of Chicago to designate 20 percent of the tax increment financing dollars generated annually in the city’s 159 TIF districts for affordable housing projects in those districts — to the foreclosure crisis.
“A Drop in the Bucket,” as Dworkin notes above, finds that NSP has purchased and rehabbed just 83 properties in its designated communities, 1 percent of the total number of foreclosures completed in the entirety of the city last year. The maximum number of foreclosed properties within any given NSP community is 11. Ald. Walter Burnett (27th Ward), the Sweet Home bill’s lead sponsor, said only three buildings in his ward have been designated for acquisition under NSP — and none have been redeveloped yet. With unused TIF money sitting in city coffers, “Why do we have to wait on the federal government?” Burnett asked at Tuesday’s press conference.
The report points out that 32 percent of all foreclosures in NSP’s targeted communities last year were located within TIF districts, 1,497 homes in all. The Sweet Home bill would send TIF dollars to purchase and rehab exactly those kinds of properties. And “A Drop in the Bucket” points out that foreclosures are hitting neighborhoods that aren’t eligible for NSP dollars but do have millions in TIF dollars at their disposal as well. (The lack of federal help for neighborhoods hit by foreclosures is an issue the Tribune examined this summer.) The upper-income Near South Side, for example, has seen hundreds of foreclosure filings that fell within the area’s TIF, which contained more than $149 million as of the end of last year.
At a press conference on Tuesday, members of the Sweet Home coalition demanded Ald. Ray Suarez (31st Ward), chair of the city council’s housing committee, and Ald. Ed Burke (14th Ward), the powerful head of the finance committee, convene another hearing on the legislation and called on the Daley Administration to lend its support to the bill. The proposed ordinance is stalled right now, despite the fact that a majority of the city council has signed on as co-sponsors.
The Sweet Home bill’s future is murky, however, given Daley’s surprise announcement yesterday that he won’t seek another term, uncertainty about how TIF dollars may be used in the next city budget, and the possibility that the funds could be sent back to various taxing bodies in Cook County. But Burnett and Dworkin both indicated they are open to compromise on the final contours of the legislation. “A Drop in the Bucket” should help them make their case.