City throws foreclosure relief to least-hit communities, Walmart block

A year and a half after snagging
$55 million in federal money to help prop up neighborhoods hit hardest by
foreclosures, Chicago
appears to be spending much of the money in neighborhoods least hit by the crisis.

Since winning the grant back in December 2008 as part of the federal Neighborhood Stabilization Program, the city has been tasked with matching the money with vacant properties in 25 target neighborhoods. At a housing committee hearing last week,
commissioner Ellen Sahli reported that 70 percent of the money has been
committed to date. But a new analysis
by The Chicago Reporter has found that the Pullman neighborhood, which is in line for the largest
number of rehabs, isn’t exactly reeling from the foreclosure crisis.

The Reporter analyzed data compiled by the Woodstock Institute and found that Pullman is in the bottom rung of communities hit by foreclosures. In fact, Pullman ranks 67 out of the city’s 77 community areas for foreclosure filings. The Reporter analyzed data for 2009 and 2008, the years in which the stabilization program began. In all, 161 filings were recorded in Pullman during that time period, accounting for just 5.6 percent of all properties that could be mortgaged. Compare that to, say, Washington Park, which has just four properties–albeit, large-scale multi-unit apartment buildings– acquired as part of the stabilization program, and which has more than a third of its properties in foreclosure, the highest percentage in the city (see chart below).

Of Pullman’s 11 properties acquired under the stabilization program thus far, all are boarded up row houses that sit in
the footprint of the future Pullman Walmart. U.S. Bank
has pledged to drive the financing
of the retail development with federal tax credits.
The bank is the parent company of the community development group, Chicago
Neighborhood Initiatives
, which owns the former Ryerson Steel factory, which is soon to be home to a new Walmart store. Chicago Neighborhood Initiatives has been selected
to rehab and sell the Pullman properties acquired under the stabilization program so far. Another nine Pullman properties are also in the works, David Doig, director of Chicago Neighborhood Initiatives, tells us.

Of the 25 communities targeted for the first round of spending under the stabilization program, Pullman had the third lowest rate of foreclosures though. Click through our analysis to see how Pullman stacks up against every other Chicago communities hungry for re-investment:

In addition, as of mid-June the city had acquired 39 properties in
the targeted neighborhood stabilization communities with the lowest foreclosure rates — at 10.8 percent or
less — compared with 47 properties in the hardest hit communities. Here’s how the U.S. Department of Housing and Urban Development envisioned that the money would be used:

HUD’s new Neighborhood Stabilization Program (
provides emergency assistance to state and local governments to acquire
and redevelop foreclosed properties that might otherwise become sources
of abandonment and blight within their communities … in order to
stabilize neighborhoods and stem the decline of house values of
neighboring homes.

The city’s strategy for dolling out
the money, however, hasn’t always coincided with the greatest need, Sahli told us in a recent interview. Rather, the city is
focused on funding projects that piggyback on recent public and private
financial investment. We obtained from the city a listing of those investments — which include shopping centers, new schools and even the House of Hope church in Pullman — that officials are hoping to prop up with the program and mapped them out below in blue. The green dots represent  bank-owned foreclosed properties from 2008 and 2009. (Click on the map to enlarge the image.)

Notice Pullman is home to very few of the sort of public/private investments that city officials have disclosed as helping to set the NSP agenda. And the Pullman Park retail center is no where to be found. It has, however, been a key motivator for taking on foreclosed properties in the neighborhood, Doig tells us. “It also plays into what’s happening on the Ryerson site,” he said. “This is all part of a neighborhood revitalization program.”

Sure makes you wonder if other hidden development agendas may be lurking below the surface.

Chicago's NSP strategy.jpg

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