New rounds of federal and philanthropic dollars for Chicago are set to help mop up the aftermath of the foreclosure crisis that has blighted many city neighborhoods and depressed property values.
Around $31 million to $36 million are expected to incentivize redevelopment of foreclosed, vacant homes and, in some cases, to demolish decayed structures.
That amount, to put it in context, is a mere fraction of the mortgage debt the Chicagoans are struggling with. “Negative equity” homes remains a huge problem here; the real estate firm Zillow estimated recently that the mortgage on more than 42 percent of all single-family homes in Chicago is worth more than the property itself.
On the federal side, Chicago has won $15.9 million in Neighborhood Stabilization Fund dollars, but city council still must ratify the plan for it. Congress gave the national Neighborhood Stabilization Fund pot another $1 billion last year when it passed the Dodd-Frank financial reform bill.
The Neighborhood Stabilization Program was first authorized under the 2008 Housing and Economic Recovery Act to find new uses for vacant, foreclosed homes. Under federal rules, everything from demolition to land banking the structure to rehabilitating it for later sale or rental is allowed.
Previously, the City of Chicago secured grants through the program worth $55 million and $98 million, respectively. The city uses the dollars to purchase buildings and then subsidize developers to clean the properties up and ultimately turn them into rental or for-sale properties. Other buildings are demolished.
The third round of Neighborhood Stabilization funding will be applied in sections of Belmont-Cragin, on the Northwest Side, the South Side communities of Chatham and West Pullman, and, on the West Side, North Lawndale and East Garfield Park. Funds will be used to ready buildings for habitation again for people on a range of income levels and to demolish blighted units.
Mayor Rahm Emanuel, meanwhile, said last week the John T. and Catherine D. MacArthur Foundation will pony up $15 million to $20 million in incentives to get vacant, foreclosed homes occupied once again. The dollars from MacArthur will initially be targeted to parts of Humboldt Park, Chatham, Chicago Lawn, West Woodlawn, Auburn Greshman, West Pullman, Belmont Cragin, Englewood and Grand Boulevard, according to a news release.
© Community Renewal Society 2011