Small steps forward. A couple of efforts we reported on this week at The Chicago Reporter’s Muckraker’s blog seem to belong in this camp.
The first was legislative: A bill sponsored by 3rd Ward Alderman Pat Dowell and based in part on a story put together by the Reporter’s Angela Caputo sailed through the Chicago City Council on Thursday with a 49-to-0 vote. The legislation means city code will now define mortgage holders as property owners; the tweak is meant to spur banks and mortgage lenders to maintain the homes they have foreclosed upon. Blight stemming out of vacant foreclosures is a serious problem for many neighborhoods across the city, and some of the worst spots are on the South and West sides.
The second concerns loan modifications. How can borrowers who are struggling with mortgage debt, have lost their jobs or are paying on note now worth more than their property be kept in their home? Efforts to date–notably the Obama administration’s Home Affordable Modification Program–have not stopped the tide of foreclosures. Gov. Pat Quinn announced recently creation of a new public-private partnership that will take a “neighborhood stabilization approach” to stopping foreclosures before they start. The partnership will use $100 million in federal dollars to target specific areas in the Chicago region bleeding from foreclosures; they’ll try to buy loans from lenders and revamp them, making them affordable. Principal write-downs are on the table.
Much of the country, however, was focused on the debt ceiling brinkmanship going on Washington, D.C. The Reporter’s Megan Cottrell pointed in a post called “Chopping the deficit by eliminating ‘public housing’ for the rich” that the mortgage interest deduction provides a huge subsidy to home purchasers. Of the $131 billion that the federal government loses in this deduction, Cottrell wrote “most of it goes to people making the most–the 80th income percentile and above.”
The widening wealth gap was a topic we took on this week at Muckrakers as well. A new Pew survey shed light on some disturbing trends. “Every group has taken a hit since 2005 because of the recession,” Megan Cottrell wrote on Wednesday. “But the net worth of Hispanic and black households has been more than cut in half – from $18,359 to $6,325 for Hispanics and from $12,124 to $5,677 for black families. Meanwhile, the incomes of white people have dropped about 16 percent.”
These numbers weren’t, however, surprising to the Reporter staff. Here’s slice of the reporting Cottrell referred back to in the wealth gap post:
- The average black person in Chicago makes 45 cents for every dollar a white person makes.
- Chicago has the third-highest poverty rate of the 10 largest cities in America, and the highest black poverty rate, with one of three black citizens living in poverty. We also have the highest racial disparity when we compare poverty between white and black people.
- In Chicago, more white people have graduate degrees than the number of African Americans who have associates degrees. Chicago is the only one of the 10 largest cities where this is true. The percentage of Latinos who have a high school diploma is just slightly higher than the percentage of white people with a bachelor’s degree.
- Out of the largest U.S. cities, Chicago is number one when it comes to the unemployment rate for African Americans. That’s more than two-and-a- half times the average for white people living in the same 10 cities. Chicago came in third highest for Latino poverty, with Phoenix beating us by only one-tenth of one percent.
- Among African Americans in Chicago, 56 percent of the population is out of the labor force. That means that one in two people do not go to work. Among Latinos, the number is two in five.
You could hear echoes of those gaps at a special state House of Representatives legislative hearing held Tuesday in Chicago, an event I attended. Check out the full story here.
Cottrell, meanwhile, laid down a charge to anyone living in the City of Chicago: see the new documentary film, “The Interrupters.” The documentary follows three of CeaseFire’s violence interrupters as they try to quell conflicts in Chicago.
In other Chicago news, organized labor, the aldermen and the Emanuel administration are circling each other, readying for budget battles to come. The Chicago Federation of Labor, WBEZ reported, released a report that identified $242 million in cost savings in the city’s budget. The federation’s report criticized top-heavy management, among other suggestions. Labor leaders are pitching their ideas to members of the city council.
Emanuel said this morning, the Chicago Tribune reported, that the estimated 2012 city budget deficit is more than $635 million. And the deficit could grow to more than $790 million by 2014. Over at Cook County, meanwhile, county board President Toni Preckwinkle is ordering 5 percent cuts in the fact of a budget gap seen as totaling $315 million next year.
© Community Renewal Society 2011