WBEZ | Fighting foreclosures in Chicago http://www.wbez.org/tags/fighting-foreclosures-chicago Latest from WBEZ Chicago Public Radio en Tackling Chicago's foreclosure crisis, block by block http://www.wbez.org/news/tackling-chicagos-foreclosure-crisis-block-block-98073 <p><p>The City of Chicago got $169 million from the federal government to tackle blocks blighted by foreclosure. That might sound like a lot, but not when you think about all the homes that have gone into foreclosure – they total about 100,000 since 2006.<br><br>City officials say you can’t help all neighborhoods at once or you’ll have no impact at all.<br><br>So their new approach is to zero in on nine small areas, dubbed "micro-markets," and do everything possible to bring them back from the brink.</p><p>That includes knocking on doors on a very warm St. Patrick's Day, trying to help homeowners prevent foreclosure.</p><p>That's exactly what John Groene and Nita Hailey-Gamble of the non-profit Neighborhood Housing Services of Chicago did recently. They're trying to help people work out loan modifications with their banks.</p><p>"Our goal is not one more owner-occupied home lost to foreclosure," Groene said.</p><div class="image-insert-image ">&nbsp;</div><p>Groene and Hailey-Gamble know just about every house in the 32-block micro-market in Chicago’s West Humboldt Park neighborhood.</p><p>They’ve walked up and down the streets lined with brick two and three flats and small bungalows, counting all vacant properties: 123.<br><br>They know how many foreclosures were filed here last year: 37.<br><br>And they’re pretty sure they know how many of those are occupied by owners: 8.<br><br>So today, they’re visiting those homeowners.</p><p>They find Cesar Maldonaldo sitting on his front porch, shaded from the warm sunshine. He had promised Hailey-Gamble months ago that he would drop by the NHS office to get some assistance modifying his mortgage, but he never came.</p><p>So Groene and Hailey-Gamble appeal to him and his partner, Maria Perez, once more.</p><p>"All our assistance is free. What we do is help you apply to your lender to see if they’re willing to lower your payment to a point where you can afford it and escape foreclosure," Groene said.</p><p>Perez twice asks how much it costs. Groene and Hailey-Gamble keep telling her it's free. They say that's one of their big challenges - convincing homeowners they're not scam artists out to swindle them.<br><br>Neighborhood Housing Services of Chicago has teamed up with the city to resuscitate a few select neighborhoods coping with derelict, boarded up buildings.</p><p>But what the city has learned is that you can’t just focus on vacant buildings.<br><br>You have to prevent other ones from becoming vacant in the first place.<br><br>You need to keep people like Cesar Maldonado and Maria Perez from moving out the minute a default notice arrives.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/john%20and%20rafael%20smaller.jpg" style="float: right; width: 325px; height: 195px;" title="John Groene, right, pays a visit to a homeowner facing foreclosure (WBEZ/Ashley Gross)"></p><p>So the city is trying to blanket nine micro-markets, mostly on the south and west sides, with help to reverse the wreckage of the housing crisis.</p><p>They’re trying to keep people in their homes, rehab and sell empty ones, crack down on building code violations and make the neighborhoods safer.<br><br>Lawrence Grisham is overseeing the city’s effort. He says this approach is a recognition the city has a big problem and not enough money.<br><br>"We can’t do everything everywhere," Grisham said.&nbsp; "Let’s focus our resources, let’s focus our activities and try and make this spot better."<br><br>The city’s experimenting with lots of ideas – including using money from special taxing districts known as tax-increment financing areas to subsidize the rehab cost of homes when banks won’t lend.<br><br>And the MacArthur Foundation has pledged as much as $20 million.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/michele%20at%202414%20smaller.jpg" style="float: left; width: 325px; height: 183px;" title="Michele Rodriguez Taylor of the Northwest Side Housing Center, in front of a home that later burned, killing two people (WBEZ/Ashley Gross)"></p><p>The city is trying to incorporate what it's learned from past efforts to stabilize neighborhoods. <a href="http://www.wbez.org/news/economy/why-has-stabilizing-chicagos-neighborhoods-been-so-tough-97980">In a previous story</a>, we explained how the city's initial approach of fixing and selling single-family homes and two-flats hasn't really worked. <a href="http://www.wbez.org/news/economy/chicagos-new-foreclosure-strategy-more-rentals-98065">So the city has instead been buying big, multi-family buildings out of foreclosure to turn into affordable rentals</a>.</p><p>Katie Ludwig works on foreclosure mitigation for the city. She says they want to kickstart the real estate market.&nbsp;&nbsp;</p><p><br>"What we’re trying to do is try to make the area more attractive for private investment," Ludwig said. "The market isn’t functioning quite as well as we want in all these areas. So what do we need to do to address that and get that private market functioning again?"<br><br>But housing activists are frustrated by the slow pace of help coming to these chosen areas and other places with problem houses.</p><p>On a quiet block on the city's northwest side, in the Belmont-Cragin neighborhood, Vanessa Valentin walked to the back of a vacant house and showed how the basement door was wide open.</p><p>"That's what causes problems in the neighborhood and why people don't feel safe," Valentin said.<br><br>The basement is strewn with trash. Drywall has been yanked off and litters the floor.<br><br>Valentin works for the non-profit Northwest Side Housing Center that serves the neighborhood of Belmont-Cragin – which includes one of the micro-markets.<br><br>Michele Rodriguez Taylor heads the housing center. When she heard last summer that her area had been included, she was thrilled.<br><br>"When Belmont-Cragin was listed, we were all in the office just like, `Yes, yes, we’re on the list, we’re going to get some help,'" Taylor said. "But that hasn’t happened yet."</p><div class="image-insert-image ">&nbsp;</div><p>Grisham of the City of Chicago acknowledges the pace has been slow. He says it takes time to do this right.<img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/2414%20after%20fire%20smaller_1.jpg" style="float: right; width: 325px; height: 434px;" title="Fire destroyed this house at 2414 N. Marmora, killing two people inside (photo/Northwest Side Housing Center)"><br>"Part of doing it right is making sure that we’re setting up the community structures to really make this ongoing," Grisham said.</p><p>He said the city wants to make sure it has the right strategy so that it can replicate it across the city later on. And housing experts applaud the city for being deliberate.<br><br>But activists like Valentin and Taylor want things to move faster. They took me to one home littered with garbage and reeking of urine. The windows were broken, the boards had been pulled off the door. A filthy pink couch sagged in the backyard.<br><br>We could see a pair of jeans hanging upstairs - indicating that people were living there. And then, indeed, two people walked out of the home while I stood there recording.<br><br>Four days later, the home went up in flames, and two people inside died.</p><p>The house was not in a micro-market area.<br><br>It just shows how desperate the situation is in many neighborhoods – and how big a task the city is facing.</p><div class="image-insert-image ">&nbsp;</div></p> Wed, 11 Apr 2012 06:00:00 -0500 http://www.wbez.org/news/tackling-chicagos-foreclosure-crisis-block-block-98073 Why has stabilizing Chicago's neighborhoods been so tough? http://www.wbez.org/news/economy/why-has-stabilizing-chicagos-neighborhoods-been-so-tough-97980 <p><p>Banks filed foreclosure on fewer homes in Chicago last year, so it’s easy to think the problem is fading. But five years into the crisis, a lot of neighborhoods are still coping with abandoned buildings that are dragging down prices and posing a danger.</p><p>One vacant house on the city’s Northwest Side recently went up in flames, killing two people thought to have been squatting there.</p><p>The federal government has poured $7 billion nationally into stabilizing neighborhoods hard hit by foreclosures. But that’s proven a lot tougher than expected.</p><p>Most people say the city’s initial approach has not worked.</p><p>On one of those really warm days in March, people are wandering into this newly renovated home in North Pullman for an open house. Realtor Brian Caron points out all the fine touches – bamboo floors, stainless steel appliances, and a really spacious bathroom. &nbsp;</p><p>All the people visiting this house say it looks amazing. And here’s what’s even more amazing: The city spent $350,000 to rehab it and is now selling the place for $105,000.</p><p>A house for less than a third of the cost? And the city is still having trouble selling this one and places like it.</p><p>That reality has forced the city to have to overhaul how it spends the $169 million it got from the federal government for the neighborhood stabilization program.</p><p>The original plan was to mostly buy foreclosed single family homes and two-flats, fix them up and sell them. With the rest of the money, the city planned to do rentals.</p><p>But observers like Kevin Jackson of the Chicago Rehab Network, an affordable housing non-profit group, say that initial approach hasn't worked.</p><p>The city has sold 27 homes so far, which he says is a disappointment.</p><p>"That’s not a real strong track record for several years now and $169 million to work with," Jackson said.  </p><p>But this isn’t so much a story about government dropping the ball. It’s a story about how the housing crash totally upended the world of real estate – and made everyone’s previous assumptions invalid.</p><p>Rewind the clock to 2009 – you’ve got boardups everywhere, and the federal government with cash in hand.</p><p>Katie Ludwig is in charge of spending the city's money to revive hard-hit blocks. She says everyone thought it would be simple and straightforward.</p><p>"We’re shooting fish in a barrel. This is going to be easy," she said. "You go out and you buy them, and you fix them up."</p><p>But nothing has been easy – starting with buying vacant properties.</p><p>"Everyone always assumes a vacant building must be bank-owned. `Oh, you got to go after the banks." And we’re finding that’s simply not the case," Ludwig said. "There’s a number of properties that are bank-owned and then an even larger percentage of buildings that are either investor-owned or just stuck somewhere in the foreclosure process."</p><p>So even though the city wanted to concentrate dollars on certain blocks to have maximum impact, it proved tough.</p><p>The federal government put tight deadlines on using up the money, so the city couldn’t dilly dally six months trying to track down an owner.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/nsp%20home%20inside%20smaller_0.jpg" style="float: right; width: 325px; height: 183px; " title="One of the city's newly renovated homes in North Pullman (WBEZ/Ashley Gross)"></p><p>Even if the city wanted to buy all the board-ups on a block, they couldn’t – and that’s made it harder to sell the ones they did rehab.</p><p>Lots of people have been checking these houses out. Monique Talison and her cousins drop in on the open house in North Pullman after church one Sunday.</p><p>She says she’s looking for a home for herself, her mom and her grandmother. She likes this place, but wonders about other boarded up houses nearby.</p><p>"That’s why I asked him the cost of the house because I’m sure that probably brought the value down," Talison said.</p><p>People with the money to buy these days can just go to better neighborhoods and avoid the ones with run-down, empty houses. And lots of other people who want to buy can’t get mortgages.</p><p>Caron says he had a buyer for this place but the bank rejected the mortgage at the last minute.</p><div class="image-insert-image ">&nbsp;</div><p><br>Pat Bolton lives on Champlain, one street over, and says she’s trying to get people she knows to buy these NSP homes, including her younger son. But she says even though her son wants to buy one, he hasn't been able to.<br><br>"He just couldn’t qualify because of the credit," she said. "He just didn’t make enough money."<br><br>So the city's had to adapt to this new world order.<br><br>"We’re very much about evaluating what we’re doing as we’re going along and if we need to make corrections and adjustments, we do that," Ludwig said.<br><br>Chicago has made a major correction in how it tackles troubled blocks - focusing now on turning foreclosures into affordable rentals.<br><br>Many people say that's a good strategy because the city for years has lacked enough affordable rental housing.</p></p> Mon, 09 Apr 2012 22:20:52 -0500 http://www.wbez.org/news/economy/why-has-stabilizing-chicagos-neighborhoods-been-so-tough-97980 Chicago's new foreclosure strategy? More rentals http://www.wbez.org/news/economy/chicagos-new-foreclosure-strategy-more-rentals-98065 <p><p>This week, we’re examining how a city turns around neighborhoods that have been walloped by the foreclosure crisis.&nbsp;</p><p>The housing research organization Woodstock Institute reports that, since 2006, about 100,000 homes have gone into foreclosure in Chicago. But they’re not spread evenly. Some areas are barely hit; others are devastated.</p><p>Chicago has gotten millions of dollars from the federal government under something called the Neighborhood Stabilization Program designed to help neighborhoods recover. But finding the most effective way to spend that money has been a matter of trial and error. After initial stumbles, the city has now come up with an unusual strategy.</p><p>To see that new strategy in practice, we took a trip to Chicago's Washington Park neighborhood.</p><p>There, we met Carl Moseley, who's lived in the neighborhood for decades. He knows which are the good buildings and which are the not-so-good buildings.</p><p>For years, 6015 S. Indiana was one of the not-so-good ones. Moseley said it was a drug lair. It had tons of building code violations.</p><p>"It was a terrible building," Moseley said. "People in our neighborhood – we would stay away from it. I have religious convictions where I talk to individuals in door-to-door work, and we didn’t really want to come near here. That’s how bad it was."</p><p>Now he lives in that building.</p><p>"I happened to drive by, and I wanted to get a better place to live and I saw it and I couldn’t believe it," Moseley said. "I saw the ceiling lights, the deck lights, that’s what attracted me to it, and I said I want to live in there."</p><p>What had happened is that the city bought the building out of foreclosure and rehabbed it. So now this 46-unit building sports hardwood floors, newly remodeled kitchens, bathrooms, everything.</p><p>Moseley works for United Airlines and pays $725 for his two-bedroom apartment.</p><div class="image-insert-image "><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/carl%20josephine%20smaller_0.jpg" style="float: right; width: 325px; height: 183px; " title="Carl and Josephine Moseley in their new apartment (WBEZ/Ashley Gross)"></div><p><br>Turning around buildings like this one and creating apartments for low- and moderate-income people is the city’s new focus.<br><br>Since 2009, the city’s gotten $169 million dollars from the federal government to buy and rehab foreclosures in hard-hit neighborhoods. But buying such large buildings wasn’t top priority at first.<br><br>The city initially planned to spend 75 percent of its money on one- and two-unit buildings to fix up and sell, and spend the rest on multi-family rentals.<br><br>But as we explained in <a href="http://www.wbez.org/news/economy/why-has-stabilizing-chicagos-neighborhoods-been-so-tough-97980">a previous story</a>, the for-sale part of the program has been tough going.<br><br>So the city did a 180. It’s now spending 75 percent of its money on rental buildings like this one.<br><br>Katie Ludwig manages the program for the city.<br><br>"We always knew multi-family was going to be part of our strategy, we just didn’t realize how big a part of the strategy it was going to be," she said.<br><br>The shift to rentals is welcome news to affordable housing advocates like Kevin Jackson of the Chicago Rehab Network.<br><br>He says he’s glad to see the city focus more on rental apartments that average people can afford – as a way to rebalance the housing stock that got out of whack in the boom years.</p><p>He says income numbers for households in Chicago average about $45,000 for a family of four.</p><p>"What we saw is incomes peaked in Chicago as in the rest of the country in the year 2000, so what we saw was a decreasing level of income to support what people wanted to do in terms of their commerce in the community, including housing," Jackson said.</p><p>So even as home values were skyrocketing during the boom, people's incomes were going down.</p><p>"That was part of the problem," Jackson said. "We did not have a match with the supply of housing being created and the incomes that actually existed in Chicago."</p><p>And while people may think of foreclosure as a scourge on single-family homeowners, lots of multi-family building owners have defaulted as well. In the past four years, foreclosures have affected almost 81,000 apartment units in Chicago, according to the Institute for Housing Studies at DePaul.<br><br>The 46-unit building on South Indiana was one of them. Since the rehab, Carl Moseley convinced his mom, his niece and a cousin to get apartments in the building.<br><br>His mom, Nellie Moseley, says there’s no comparison between her old place and her new one.<br><br>"One hundred percent better," Moseley said. One reason why she decided to move to this building? Thieves ransacked her last apartment, a few blocks away, last year. She says she feels safer in her new home.<br><br>Rehabbing a big rental building like this one can go a long way toward helping an entire block recover, but it's not enough. Just across the street from where the Moseleys now live is a boarded up building, and there are several more on the next block.<br><br>The housing crisis isn’t static – new places continue to fall into foreclosure. For the people managing the city's foreclosure mitigation efforts, it can feel like Sisyphus pushing a boulder uphill endlessly.<br><br>Will Towns works for Mercy Portfolio Services, which runs the Neighborhood Stabilization Program for Chicago.<br><br>"Perfection is but a moment in time," Towns said. "So we have a block where we’ve got all the assets done, that day everything’s great. The next day, who knows?"<br><br>Helping make a lasting change on a block requires all hands on deck, from police and the buildings department, to non-profits, to block clubs. That’s the approach Mayor Rahm Emanuel says he’s taking. We’ll hear more about how well that’s going tomorrow.<br>&nbsp;</p></p> Mon, 09 Apr 2012 12:48:41 -0500 http://www.wbez.org/news/economy/chicagos-new-foreclosure-strategy-more-rentals-98065