The term "painted lady" usually refers to a Victorian or Edwardian house painted in a way that highlights its architectural details. The painted lady in question here lacks the details characteristic of a Victorian or Edwardian home.
AOL Patch relates the back-story of this Evanston house in the 1400 block of Emerson, quoting developer Michael Lee:
[T]here is talk that Lee painted the house as a way to retaliate against the city for prior housing-related disputes, something Lee denies.
"The city asked me if I would paint it and I obliged. I'm surprised that it's so popular It's just a house."
He argues that it's no different from the city-sponsored graffiti underneath the Emerson Street Bridge, not far from the home and added, "It's probably nicer than that."
As the house's owner, Lee is proud of his work.
"A lot of people like it," he said. "They think it's fun and artistic and it's sort of a landmark. There's a few detractors — but that's always the case."
The Emerson mural is pictured above. If you're interested in what the detractors have to say, read the Patch article.
The house reminds me of the late, great Edward Ben Elson, the self-styled "looney lawyer" who painted his McFarland home a screaming purple to needle his neighbors.