Skip to main content

Hearing from the ’hoods

John McCarron
Published: marzo 16, 2010

Chicago is off to a fast and effective start with its novel program to stabilize neighborhoods hit hardest by mortgage foreclosures. Yet the spread of board-up blight continues to inflict pain – and fray tempers – in the neighborhoods.

This contrast between the program’s solid performance and mounting local frustration with vacant buildings was much in evidence at a public hearing held March 11, 2010 before the City Council’s Committee on Housing and Real Estate.

Ellen Sahli, center, and Ald. Ray Suarez at the City Council hearing regarding the Neighborhood Stabilization Program.

Photos by Gordon Walek

To start, city officials running the Neighborhood Stabilization Program (NSP) listed several major achievements since the program launched in February 2009 with an initial federal grant of $55 million:

  • Nearly half of these initial funds had been committed, with 205 dwelling units acquired from foreclosing lenders and another 98 due to close in 30 to 60 days.
  • A stable of more than 40 developer/contractors – many owned by minorities and virtually all employing substantial number of minorities – has been assembled and several already have begun work on the first batch of acquisitions.
  • Some 1,522 vacant units have been identified for future acquisition across the city’s hardest-hit neighborhoods, meaning they’ve been worked up with a price appraisal, an estimation of rehab work required, and a financing plan for eventual resale at affordable prices to qualifying buyers.  
  • Most important, the city’s methodical approach recently helped it win an additional $98 million from a second, more competitive, round in which only 56 of 480 applying locals received grants from the U.S. Dept. of Housing and Urban Development.

Inventing a workable process
This early progress was achieved, officials said, even though nothing close to NSP had ever been attempted. There is no off-the-shelf organizational model for buying, rehabbing and reselling some 2,500 bank-foreclosed dwelling units, many of them stripped by thieves of all piping, wiring and fixtures.

“This program is the first of its kind in the country,” said Ellen Sahli, first deputy commissioner for housing with the city’s Department of Community Development. “There was no infrastructure, no way to do this at scale quickly. An essential amount of work had to be done to lay the infrastructure and to comply with federal regulations. We needed appraisers, spec writers, board-up and clean-up services, property managers. We are now in a very good position to move forward.”

More than 100 members of the public attended the hearing in Council Chambers. So did a dozen aldermen whose wards contain census tracts deemed eligible for the program; or in their view, should have been eligible.

“I have over 1,200 foreclosed properties in my ward,” testified Ald. Sharon Denise Dixon (24th), whose North Lawndale neighborhood had yet to see its first purchase-and-rehab. “I have open buildings. I have dingy dirty empty lots. I don’t understand. My numbers hit … I have five or six foreclosed properties on my own block. So you cannot tell me these other communities are more needy than Lawndale.”

Aldermen Pat Dowell (center) and Ariel Reboyras at hearing in City Council council chambers.

Where’s ours?

Dixon acknowledged North Lawndale was included in the first round of NSP funding and that soon “four properties are to be purchased, maybe five.” Her main complaint was that North Lawndale – one of the most disinvested neighborhoods of the city – fell off the list in the city’s successful bid in the highly competitive second round, or NSP2.

Part of the reason, say those familiar with the process, is that North Lawndale was awash in abandoned buildings before the foreclosure tsunami hit.  Federal program guidelines favor communities that can be stabilized by restoring newly foreclosed dwellings to an otherwise healthy housing stock.

“Not all vacant and boarded-up properties are eligible under this program,” Sahli said when challenged on the point.

Ald. Fredrenna Lyle (6th) complained her South Side ward had been overlooked. “There’s not one property on this list in the 6th ward. I am absolutely devastated. I can’t tell you how angry I am.

“I see a pattern that is very distasteful to me,” Lyle continued, asserting the city favored neighborhoods where private charitable foundations have made investments in community development. 

Sahli promised “to work with you” and admitted Lyle’s Greater Grand Crossing neighborhood, while eligible, may not have gotten much early attention because “we started where we could get some traction.”

Regardless, the 2,000-2,500 vacant, foreclosed units that NSP expects to return to productive use in the next three to five years are a drop in the bucket of the larger foreclosure problem. In 2009 alone, foreclosure actions were filed against more than 22,000 city dwellings including hundreds of apartment buildings. 

Others who testified complained some of the program’s chosen developers have not performed well in the past, or haven’t hired enough African-Americans, especially from neighborhoods where the work is being done.

Mike Tomas, of theGarfield Park Conservatory Alliance, testified that the NSP program will benefit his neighborhood.

Kudos, too

But developers like Karry Young, whose award-winning KLY Development is rehabbing NSP houses in Chicago Lawn, presented a different picture.

“We’re creating jobs for the community,” testified Young, whose 50 employees – all earning union-scale wages – are almost all African-American and almost all from Chicago or close-in suburbs. 

Leaders of community development organizations also had good things to say about NSP’s fast start in their neighborhoods.

Mike Tomas, of the Garfield Park Conservatory Alliance, said his group, like several others in LISC/Chicago’s New Communities Program, has been working with the city to identify clusters of  foreclosed properties, especially those  near schools, whose rehab and resale would do the most good. 

He said the city NSP staff, and that of its hired program administrator, Mercy Portfolio Services, “have been responsive, engaging and supportive.” 

“To date the city has acquired seven units in East Garfield Park,” Tomas said, “and together we hope to continue to improve the quality of life, not just in East Garfield, but across the West Side.”

Several aldermen also expressed support of the program.

“Thank you for the team you’ve put together and for all your hard work, coming down to the community, explaining the program, surveying the neighborhood,” said Ald. John Pope (10th), whose ward includes the hard-hit South Chicago neighborhood. “This is a great opportunity not just to create housing but to get rid of nuisance buildings, to get people working and to learn a trade.”  

Ald. Ray Suarez (31st), chairman of the housing committee, said his panel would continue to monitor NSP and include its progress in the city’s quarterly affordable housing reports.

 

 

« Return to News