Job #1 for NSP: Fill Empty Houses to Stabilize Neighborhoods
Matt Field
Published: agosto 31, 2009
The crime was shocking even by West Side standards. Several men were standing on a blighted section of Walnut Street in East Garfield Park when a gunman charged from a vacant lot, fired into the group, and fled. Seven people were wounded, one critically.
Though police eventually made an arrest, Mike Tomas, a neighborhood organizer, said the gunman wasn’t the only culprit. Foreclosures, he said, are part of the problem.
“The (Chicago) Tribune article mentions that the suspects ‘ran on foot through the vacant lots,’” said Tomas, New Communities director in East Garfield Park. “We have vacant lots and board ups. It breeds that kind of activity.”
Mike Tomas, director of the New Communities Program in East Garfield Park, at a recent foreclosure counseling meeting.
Alex Fledderjohn
But for East Garfield Park and other neighborhoods hit hard by foreclosure, help may be on the way. Chicago is quietly using a hefty infusion of federal money to combat the board-up problem. City officials hope a $55.2 million Chicago Neighborhood Stabilization Program grant will re-develop hundreds of REOs – as bank-owned properties are called – before neighborhoods slip too far behind.
The money is coming from the Housing & Economic Recovery Act of 2008, passed by Congress in July of that year. It included $3.92 billion for the Neighborhood Stabilization Program; Chicago’s application was approved by HUD in January. The goal of the program is to stabilize neighborhoods by getting vacant foreclosed homes up-to-code and occupied as quickly as possible in targeted areas.
Neighborhood Stabilization 101
Chicago is directing the stabilization money to 25 targeted neighborhoods. To decide which neighborhoods, the city followed federal guidelines, taking into account the severity of the foreclosure problem – how many properties have been foreclosed on, and what is the likelihood that more foreclosures will occur? City officials also looked at economic indicators, such as unemployment.
So what sort of neighborhoods made the cut?
Consider East Garfield Park, which is expected to receive stabilization money. It had fewer than 300 foreclosures in 2008 – about mid-pack among Chicago neighborhoods. But with a new $69 million high school, a well-known conservatory and a coalition of community groups that crafted a long-term plan for neighborhood development, it is just the sort of place the city thinks it can make an impact with its limited resources.
Tomas, who directs the community coalition that crafted the plan, wrote in a letter to the city that foreclosures on Walnut, where the shooting occurred, threaten recent investments in the neighborhood.
“The $69 million new Westinghouse High School, which is opening this fall, is just a few blocks away and students using the CTA Green Line will have to pass this block every day,” he said.
NSP hopes to stabilize key neighborhoods by returning vacant foreclosed properties to productive use.
Alex Fledderjohn
In all, according to the city’s Web site, Chicago hopes to use stabilization money re-develop up to 2,500 units of housing in the next three years. Properties are still being examined and it is still too early to say which will be part of the program. Officials managing the grant hope that by next spring, several re-habbed units will be on the market or rented out.
A stable core
The city’s strategy – focusing only on certain neighborhoods, and only on certain blocks within those communities – is intended to provide more bang for the buck, said Ellen Sahli, first deputy commissioner in the city’s Department of Community Development. She told the Medill News Service last winter that the city needed to concentrate its efforts.
“Let’s say on a given block there are 10 vacant, foreclosed homes. If we can’t control all 10, do all 10, we’re never going to get people to buy one,” she said. “If we just get one of the 10, there’s not going to be sufficient support so that the block knows we can do this.”
Under the law, the money must be used in “areas of greatest need,” defined in part by number of subprime mortgages and the number of completed foreclosures, as well as the likelihood for an increase in completed foreclosures. In Chicago, those areas tend to be on the South and West sides of the city.
A fourth of the money must be targeted to neighborhoods there the annual household income is at or below 50 percent of the median income in the greater Chicago area – that’s $37,700 for a family of four.
Also considered was recent public and private investment in a neighborhood, such as schools, police stations and retail development; such money could be wasted if the foreclosure crisis were allowed to accelerate in the area.
Another factor was whether there were nearby community anchors or major employers, such as universities, hospitals and commercial corridors. The idea was to focus on areas that still have a lot going for them – areas where properly targeted investment could make a real difference. Another key to that strategy was being able to acquire a majority of the vacant, foreclosed properties on a given block to make an impact.
More federal money to come?
If Chicago’s targeted strategy and efficient system pay off, not only will some hard-hit Chicago neighborhoods see some relief from the vacant board-ups dotting their blocks, but the city stands a shot at landing even more federal money.
The recent federal economic stimulus bill contained funds for a second round of neighborhood stabilization grants. It is expected that in this round, the money will be granted more competitively and Chicago will have to show that it used the first round of money effectively. In that second round, the city hopes to net another $98 million. That money will be used to re-develop, demolish or construct about 1,500 units of housing.
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