The Price of Foreclosure: The Impact

The Price of Foreclosure:  The Impact

A few individuals owning multiple units within the 4725 South Michigan Condo Association ultimately led to its demise.

When an individual owns multiple units in an association and their financial picture sours, the association's finances come tumbling down as well.

If the association isn't getting paid by one unit that's challenging; not getting paid by four is devastating.

As I noted in my last post, John Welch had a federal judgment of several thousand dollars against him well before he applied for and received a mortgage for unit 3C in the 4725 association.

Yet somehow, he not only managed to obtain a mortgage for that unit but three others.

He wasn't the only one who had multiple units and multiple foreclosures in the association.

My point is that when this too common occurrence happens on the south side, it devastates the economic landscape of the neighborhood.

Housing values nose dive, an abandon building becomes a potential haven for criminal activity, potential middle or upper middle class home buyers don't want to live near an abandoned building.  The perception of the neighborhood will be one of urban blight and lawlessness.

To further the cycle, what viable retail presence wants to be located in an economically unstable neighborhood with a perception of nearby crime?

Perhaps it's easier to purchase multiple units on the south side because the housing stock is less expensive than other parts of the city. 

Historically, with the changes in housing laws and the migration of newcomers, the south side has been a haven for investors looking for a steady stream of rental income. 

Maybe all of this is floating somewhere in the minds of investors as they purchase into neighborhoods that are desperately trying to reshape their future.

Probably not---the numbers look good on paper---that's all that matters.

Yet when everything goes wrong, it's the communities and ultimately the tax payers of the City of Chicago that have to pick up the tab.

Foreclosures have a ripple effect no matter where they occur.

The waves just hit so much harder down here.

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  • Great post! Thanks for writing. I have always wished the best for the Bronzeville area. It is still a great place for retailers to go, but they won't, as you have stated here. What's the solution?

  • In reply to mbacox:

    Thatguy---bringing back the middle class and viable retail. But that is another challenge for another post.

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