Affordable rental housing is a critical, but increasingly limited, resource throughout the Chicago region. As more families lose their homes to foreclosure, more families are in need of rental housing. Additionally, an increasing number of rental buildings are disappearing to foreclosure. According to the DePaul Institute for Housing Studies, 559 multifamily rental buildings in West Cook County had a foreclosure filed on them in 2009, affecting 1,712 units. That’s up 83 percent from 2007, when 296 buildings with 933 units entered foreclosure.
Here’s a sampling of the commentary and proposals generated by the report:
The impact of troubled foreclosed homes
“The city's Roseland neighborhood, on the city's far South Side, is one example. In 2007, some of the pictures of the homes taken by the Cook County assessor's office showed properties that were reasonably well cared for by homeowners.
The foreclosure crisis has exacerbated ongoing concerns about the impacts of vacant homes on communities.
It identifies a group of “red flag” properties which are troubled vacant properties where a foreclosure has been filed, but no outcome has been reached. The report also identifies a group of lender-owned, foreclosed properties that are most likely vacant and not in compliance with the City of Chicago’s vacant building regulations. The report ends with policy recommendations to address problems associated with troubled, vacant foreclosures.
When a loan becomes seriously delinquent, the loan servicer may conduct an analysis to see whether it would be more beneficial to proceed with a foreclosure or not. Why wouldn’t a servicer want to complete a foreclosure? One reason could be that the home has a very low value and the costs associated with pursuing the foreclosure and maintaining the home until it can be sold to a new owner may be more than the proceeds a servicer might get from selling the property.
At the Regional Home Ownership Preservation Initiative (RHOPI) 2010 Annual Plenary on July 15, more than 80 representatives from the public, private, and nonprofit sectors came together to hear leading practitioners explain how they are meeting those challenges—and worked together to come up with proposals to address persistent problems.
Click here to see the agenda.
The letter pointed to the growing number of vacant and foreclosed properties that have been shown to destabilize communities by lowering property values, straining municipal resources, and increasing violent crime. Investment in projects designed to mitigate the effects of the foreclosure crisis is a primary credit need in many hard hit communities, and the consideration of NSP-related investments, loans, and services under CRA will help evaluate how financial institutions are meeting this need.