January 25, 2010

Mayor Daley, Senator Durbin Say Chicago Will Recieve $98 Million in Federal Funds to Aquire, Rehabilitate Foreclosed Properties

Goal is to Put Vacant Buildings Back in Productive Use
Mayor's Press Office    312.744.3334

Mayor Richard M. Daley and U.S. Senator Dick Durbin said today Chicago will receive $98 million in federal funds under the Department of Housing and Urban Development’s Neighborhood Stabilization Program to help acquire and rehabilitate foreclosed properties.

Chicago received $55 million last year under the same program and its 3-5 year goal for the total $153 million is to put as many as 2,500 properties back in use by helping to transfer ownership from financial institutions to approved redevelopment partners.

“Foreclosures have a devastating impact on homeowners and communities. These properties attract vandalism, arson, and other crime and they discourage people from investing in the neighborhood,” Daley said in a news conference with Durbin held at the Marquette Park Field House, 6734 S. Kedzie Av.

“In these difficult times when the resources of local governments are stretched thin, one of the most important tools we have had to help us address the foreclosure crisis has been the Neighborhood Stabilization Program,” he said.

Chicago’s grant of $98 million is the fifth largest competitive award in the country and second largest among municipalities.

Daley thanked Senator Durbin for his leadership in enacting this critical program and for his constant support for the needs of the people of Chicago and all of Illinois.

“He recognizes the impact foreclosures can have on our neighborhoods and knows – as we all do – that if we don’t continue to address this challenge, we run the risk that entire blocks in many parts of Chicago may be at risk, threatening our City’s economic future,” the Mayor said.

Last year’s NSP grant has allowed the City to begin the process of identifying, acquiring and rehabilitating an expected 1,000 units of housing in a variety of foreclosed properties.

To date, the City has purchased 95 properties and has another 101 properties that will close within 30 days. When that happens, Chicago will have committed nearly half of the $55 million it received in the first round of funding.
With the new funding, the City expects to target an additional 1,500 units of housing in neighborhoods with the greatest concentration of vacant, foreclosed homes.

The following community areas are included in the City’s Neighborhood Stabilization program:

Albany Park, Auburn Gresham, Austin, Burnside, Chatham, Chicago Lawn, East Garfield Park, Englewood, Fuller Park, Grand Boulevard, Greater Grand Crossing, Hermosa, Humboldt Park, Logan Square, New City, North Lawndale, Oakland, Pullman, Riverdale, Roseland, South Chicago, South Deering, South Lawndale, South Shore, Washington Park, West Englewood, West Garfield Park West Pullman and Woodlawn.

A not-for-profit organization, Mercy Portfolio Services, is managing the process of acquiring, redeveloping, and repositioning properties in the target areas.

In addition, the City’s Department of Environment will use $1.5 million to help pay for natural gas efficiency improvements on the homes being rehabilitated under NSP. This lowers utility bills for homeowners and helps the City meet the goals set out in the Chicago Climate Action Plan.

Daley said that although there are some hopeful signs in the national economy, the foreclosure situation remains very troubling and some experts foresee foreclosures continuing at high levels this year.

In Chicago, nearly 15,000 foreclosures were filed in the first three quarters of 2009.

The Mayor said Chicago anticipated the foreclosure problem and began to address it years ago. With the help of many partners, the City has established foreclosure prevention programs that have served as national models, such as:

  • The Homeownership Preservation Initiative (HOPI), which since 2003 has prevented more than 2,800 foreclosures, reclaimed 717 vacant buildings and counseled more than 14,000 at-risk homeowners.
  • The Early Warning Program, which started in 2007 and gives homeowners facing foreclosure more time to get help, work out solutions and keep their homes.
  • Ongoing financial support of HUD-certified credit counseling agencies, and
  • The Borrower Outreach events in Chicago neighborhoods hit hardest by foreclosure, which were launched in 2007 at this very location. To date, the City has helped more than 4,500 homeowners during these events the City’s “Fix Your Mortgage” events have helped another 1200 people. More of these events are planned for 2010.

Daley pointed out that the rehabilitation of foreclosed properties creates much-needed jobs for Chicagoans who work for a variety of industries.

In addition, through Cleanslate Property Services, the City is recruiting and training formerly-incarcerated individuals and those with little or no work history to secure and maintain the outside of vacant properties being acquired through this federal program. So far, 15 people have been hired through that initiative.