By Janice Neumann
Special to the Chicago Tribune
September 28, 2008

First there were the vacant homes, one with its utilities cut off, overgrown grass and weeds and garbage piling up outside. Then there was the former car wash that sat vacant for three years, windows boarded up.

Weary of making multiple calls to find owners of the neglected properties, Oak Forest Ald. Diane Wolf researched what other Illinois municipalities were doing to monitor the problem and found vacant building ordinances in Chicago, Evanston and Normal, Ill.

At the urging of Oak Forest Mayor JoAnn Kelly, who was equally upset about the patches of blight, the city council in July passed a vacant building ordinance, joining other communities wrestling with ways to combat a rise in vacancies brought on by foreclosures and a dismal economy.

"We should not have to let it turn into a blighted neighborhood," said Wolf. "It brings down property values, and there are safety concerns."

The Oak Forest ordinance, which was modeled after Evanston’s and Chicago’s, uses a Web-based registry, Publicrecords.com, to list vacant buildings, when they went into foreclosure and the owner’s contact information.

Each vacant building must be inspected by the city’s code enforcement officer for a $500 fee and register annually for another $200 fee. Owners must have insurance ranging from $500,000 to $2 million. Infractions cost owners $100 to $750 daily. Buildings may not be boarded up for more than three months. Each owner must submit a plan for fixing up the building, demolishing it or selling it.

The city also hired a full-time code-enforcement officer and shortened the time owners have to cut grass and weeds from 10 days to five. After five days, the city does the work and bills the owner.

"You may have one vacant home on a street that actually reflects on everyone’s house on a street," said Mayor Kelly. "There are some streets with multiple foreclosures."

Oak Forest, which has a population of about 28,000, had 72 foreclosures in the first half of 2008, including 30 REO (real-estate owned) buildings, according to the Woodstock Institute, a Chicago non-profit that promotes community reinvestment in lower-income and minority areas and tracks foreclosures. REOs, buildings that go to auction but do not sell and revert back to banks or mortgage companies, are the properties most likely to become vacant, according to the Woodstock Institute.

Fears about the ripple effect of vacant buildings, diminished property values and increased crime are echoed by experts.

Julie Tappendorf, an attorney who wrote the vacant building ordinances for Oak Forest and Gilberts, said vacant buildings create a host of problems for communities.

"The ripple effect from the housing crisis has been devastating, as municipalities find that vacant buildings mean less revenue because of lower property values and unpaid taxes and utility bills. Unfortunately, at the same time that municipalities see a decrease in their revenue, they must deal with an increase in costs from enforcing property maintenance codes, securing vacant buildings, and policing neighborhoods that have seen a spike in crime as a result," said Tappendorf.

Municipalities sometimes spend up to $34,000 per foreclosed property on increased policing and fire suppression, inspections, demolition and legal fees, unpaid water and sewer and trash removal, according to the Homeownership Preservation Foundation, which helps those at risk of losing their homes.

Each foreclosure within one-eighth of a mile can reduce a home’s value by 0.9 percent, according to a 2005 study of Chicago homes by the Woodstock Institute.

Though not all vacancies are foreclosures and not all foreclosures neglected, "there’s definitely a strong relationship where areas that have high levels of foreclosures are also going to have high levels of vacant properties," said Geoff Smith, vice president of the Woodstock Institute.

"We know homeowners lose and banks lose, but what is a little less visible is how much cities lose and how much equity disappears in people’s properties," said Colleen Hernandez, executive director and president of the Minneapolis-based Homeownership Preservation Foundation.

Even municipalities such as Aurora, which has a property-maintenance code that clamps down on neglected buildings, are finding they need to step up their enforcement.

Aurora has had a registry for rentals and former rentals since 1982, which allowed officials to keep track of properties when they became vacant. The city now has a database of foreclosures and is starting to inspect the exteriors of the properties on it. Officials are also sending the database to 70 banks and Illinois realty agents, making them aware of the property-maintenance requirements.

"We think providing them with this information will allow them to better maintain these properties on their own without the necessity of the city’s direct involvement," said Mark B. Anderson, assistant director of the city’s Department of Neighborhood Standards.

Aurora has a population of nearly 165,000 and had 805 foreclosures, with 247 of those REOs, in the first half of 2008, according to Woodstock data.

Robert Klein, CEO for Safeguard Properties, which maintains a number of Chicagoland properties, said the company has stepped up its efforts in recent months to talk to cities about the problem.

Northbrook enacted a vacant-building ordinance in 2007 that focuses on board-ups or other unsightly properties.

"I think people really need to be patient," said Carolyn Brzezinski, director of Northbrook’s Department of Building and Development. "It’s very difficult when there are so many people going through this, the banks are inundated and it’s tough for them to keep up with all the demands." Northbrook, with a population of 33,407, had 69 foreclosures in the first half of 2008, including 21 REOs.

Oak Park is planning to vote on a vacant building ordinance to help clean up neglected buildings and prod owners of vacant commercial properties. The city of 52,524 had 91 foreclosures and 48 REOs in the first six months of this year.

"This new ordinance has fairly aggressive inspection and maintenance requirements that will create some appropriate tools and incentives for landlords to actively market and modernize the properties," said Oak Park Village Manager Tom Barwin.

In Oak Forest, Marge Carlson, a resident for 18 years, said she was fed up with abandoned homes in her neighborhood before the ordinance was passed. One home had overstuffed furniture in its front yard and a rotting pool deck in back.

"Basically I think the city should certainly have more control over what goes on within the limits of the city," said Carlson.

 
 
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