Feds sue Chicago over vacant building ordinance

December 13, 2011

(AP/file)

The federal agency overseeing mortage giants Fannie Mae and Freddie Mac is suing the city of Chicago over a new ordinance aimed at cracking down on owners of vacant and abandoned buildings.

The Federal Housing Finance Agency argues in a lawsuit filed Monday that the city can't impose fines and regulations on the federal government. The ordinance passed last month requires lenders to register and maintain vacant buildings, or face fines of up to $1,000 a day.

The agency also says Fannie Mae and Freddie Mac are being unfairly saddled with all responsibilities of property ownership - mowing lawns, shoveling snow and boarding up windows - even on homes that are still going through the foreclosure process.

But that's exactly the point, according to the city.

The ordinance passed in November was designed to identify someone who is responsible for maintaining vacant property, even while a home works its way through lengthy foreclosure court proceedings, said a spokesman for the city buildings department, which enforces the law.

The lawsuit could have big implications. The city has identified about 18,000 vacant buildings, which are a drag on property values and are often havens for crime.

Mayor Rahm Emanuel on Tuesday said the federal government doesn't have a case.

"We did exactly what we were supposed to do, rightfully, for our neighborhood, our community, and our residents of our city," Emanuel said.