Chicago, known for its trademark deep dish pizzas, is still being served a very deep dish of foreclosure trouble. The Windy City is taking steps to reduce the impact of the housing crisis, and has just passed a new city ordinance called "Keep Chicago Renting" that will protect renters from losing their homes to foreclosure. This ordinance is designed to help decrease the urban blight that follows foreclosure in many parts of the country. If there's any one city that can't afford further urban blight, it's Chicago, which is already being ravaged by a historic crime wave. This follows a statewide effort in Illinois that was intended to help empower homeowners in foreclosure.
How Does "Keep Chicago Renting" Work?
When foreclosure proceedings are completed, banks usually clear everything and everyone from inside buildings. In urban areas like Chicago, oftentimes a building that has been foreclosed upon has several tenants, and these tenants are often literally left homeless, thanks to the short notice provided by their landlord (or the bank). In addition to tenants being left homeless, they lose their security deposits. In 2009 alone, an estimated 8,500 rental units in Chicago were cleared through foreclosure, and renters lost an estimated $7.3 million. One could only imagine how this money could have stimulated the local economy in Chicago.
Foreclosure in urban neighborhoods doesn't just affect landlords and tenants. It also affects the area immediately around foreclosed properties. Oftentimes, vacant properties become miniature crime centers. Drug dealers stash their drugs inside, and thieves steal the copper wiring from inside the building. Other criminals trespass and vandalize these properties without regard for whoever may occupy the building in the future. This doesn't only bring down the value of the foreclosed property, but also the property value of the surrounding properties as well. This can eventually create a domino effect on the property values of an entire neighborhood.
Under "Keep Chicago Renting", renters of foreclosed properties will either be paid $10,600 to help them relocate, or will be given a new rent-controlled lease until the property is finally sold. Although it seems simple enough, this type of legislation should have far-reaching effects on neighborhoods in Chicago, especially when considering the scope of the foreclosure crisis within the city. In urban Chicago alone, it has been estimated that over 4,300 apartments were foreclosed on in 2012, which affected nearly 12,000 rental units, and likely affected thousands of small, neighborhood-owned businesses as well.
Should Other Cities Consider Similar Plans?
If a city realizes that its urban neighborhoods are dying because of foreclosure, and there seems to be little prospect for reinvigoration through gentrification or other means, then it should definitely consider creating its own version of "Keep Chicago Renting". Even if a responsible renter isn't directly responsible for property taxes, he or she positively contributes to the economy of the neighborhood around them, and is a valuable asset to their community at large; cities should do everything they can to keep them around.
If you're facing the Illinois foreclosure process on your home and don't know where to start, don't go at it alone! It is highly recommended that you retain a qualified and experienced foreclosure attorney to help you save your home. Be sure to download our brief guide to hiring a foreclosure attorney below.
pizza photo credit: intellidryad via photopin cc
