Mayor Hails First Fruit of Foreclosure Fight
Alicia Ivy is fed up with the foreclosure blight dragging down her block in West Humboldt Park and was only too happy, on the sunny first Friday of 2012, to give Mayor Rahm Emanuel a walking tour of the lowlights.
Activist Alicia Ivy is proud of her nicely maintained graystone but tired of the blight brought on by nearby foreclosures and was happy to give the mayor a tour of her neighborhood.
“This is what we’re up against,” Ivy said, waving at a boarded-up, graffiti-pocked two-flat across the street from her nicely maintained graystone on the 700 block of North Christiana Avenue.
“This was my parent’s house,” she said of her place. “This is where I grew up. We can’t let this foreclosure stuff bring us all down.”
Mayor Emanuel was in West Humboldt on Jan. 6 to see the problem first-hand and announce expansion of the city’s core effort to acquire, rehab and re-populate foreclosed properties, called the Micro-Market Recovery Program (MMRP).
First announced by the mayor last August, the idea is to better focus and coordinate a multi-partner effort to acquire and rehab foreclosed buildings—especially multi-unit buildings—beginning in nine target communities.
It’s an extension of a strategy recommended early on by LISC/Chicago and its partners—a strategy that helped the city win more than $150 million from a competitive federal program to fund purchase-and-rehab of lender-owned housing.
“Nobody’s going to spike the ball on the 30-yard-line,” Mayor Rahm Emanuel said of the city's efforts to date. “We’re not in the end zone. But these are the right type of strategies … to get smart and to solve the problem.”
MMRP services will include targeted code enforcement efforts; foreclosure prevention outreach; and resources and incentives to induce developers and owners to purchase, rent or sell foreclosed or vacant properties. Also, the city will use its power to assume title to or control certain distressed properties, holding them for future development or alternative uses.
“When a home gets foreclosed on a block,” Emanuel said, seconding Ms. Ivy’s fears, “research shows every other house loses about $10,000 automatically in value. It has an immediate impact.”
The mayor ended his walk-around with an outdoor press conference at the corner of West Huron Street and North Spaulding Avenue. There, on the northwest corner, is an eight-unit red brick walk-up being rehabbed by Hispanic Housing.
“We’ve ‘smartened up’ to the problem,” Emanuel said, conceding that, even with the federal millions, there’s no way City Hall can make a noticeable impact unless it targets specific neighborhoods.
“We were spreading the peanut butter way too thin,” he said. “Then Andy came to me, and we decided this had to be dealt with from a neighborhood perspective.”
The city's Micro-Market Recovery Program will provide targeted code enforcement; foreclosure prevention outreach; and resources and incentives to induce developers and owners to purchase, rent or sell foreclosed or vacant properties.
“Andy” is Andrew Mooney, who left his position as executive director of LISC/Chicago in the fall of 2010 to help reorganize the city’s Department of Housing and Economic Development (HED). He was asked last year by newly elected Mayor Emanuel to stay on as commissioner.
Asked at the press conference why the red brick walk-up at 3304-08 W. Huron St. will be just the first MMRP-assisted property to be reoccupied when it opens this spring, Mooney explained why foreclosure turnarounds are such a tough slog.
“This is a lengthy process,” Mooney said. “It’s finding out who owns the buildings, getting title through the court system, figuring out how to get the rehab work financed and done. And once they’ve been vacant for a period of time they need a lot of rehab.”
The Huron building made a good example, having lapsed into the foreclosure process after a developer tried to convert it to condominiums. Mercy Portfolio Services, which manages the funds won through the federal Neighborhood Stabilization Program (NSP), purchased the empty building at a deep discount last year. With financing provided by Community Investment Corporation (CIC), the finished property will be transferred to Hispanic Housing, which will act as landlord.
The city won a $150 million federal grant to purchase and rehab lender-owned housing thanks to a targeted, multi-partner effort of the sort recommended by LISC/Chicago and its NCP partners.
In addition to LISC, other MMRP partners include Neighborhood Housing Services of Chicago, which counsels troubled borrowers and often identifies buildings ripe for purchase; and the MacArthur Foundation, which is making nearly $20 million available through loan programs that will leverage another $50 million in private capital.
LISC/Chicago provides financing to Mercy Portfolio Services through a $4 million line of credit to cover due diligence and acquisition costs, said Susana Vasquez, who succeeded Mooney last year as executive director. To date that revolving line has fronted over $19 million to get the paperwork moving on dozens of buildings.
LISC/Chicago and NCP provide a lot more than money to help advance the MMRP strategy. Early NCP organizing efforts will help the city hit the ground running in five of the nine neighborhoods targeted by the city that are part of New Communities: Chicago Lawn, Woodlawn, Auburn Gresham, Englewood and Humboldt Park, which includes West Humboldt.
There the NCP effort is led by Bickerdike Redevelopment Corp., which, like several other NCP communities, already had organized a foreclosure prevention program and, with partners like Neighborhood Housing Services, was in a good position to identify blocks—and clusters of blocks—where the city and Mercy could focus their efforts for maximum effect.
One stop on the mayor's tour was this building on Huron Street, rehabbed through the federal Neighborhood Stabilization Program that's managed locally by Mercy Portfolio Services.
Joy Aruguete, Bickerdike’s executive director, attended the mayor’s press conference and said her group, which operates several affordable-rent buildings nearby and even oversees its own construction subsidiary, hopes to take possession of other buildings via MMRP.
What LISC and NCP contribute most to the foreclosure fight, though, might just be engaged people like Alicia Ivy. She’s been active with Bickerdike, with the West Humboldt Park Development Council, with Ald. William Burnett’s 27th Ward office, and with the West Humboldt Park Farmers’ Market and Bazaar.
Emanuel thanked Ivy for leading the tour of her block, but then cautioned the press that Chicago, with nearly 10,000 bank-owned residential properties, is only beginning to turn the corner.
“Nobody’s going to spike the ball on the 30-yard-line,” the mayor said. “We’re not in the end zone. But these are the right type of strategies … to get smart and to solve the problem.”
Posted in Housing, Humboldt Park