Jan 27, 2011
After a West Side activist group announced plans to take over and board up a building abandoned following foreclosure, the city moved within hours to have the building demolished, said Elce Redmond of the South Austin Coalition.
“They got wind of what we were going to do and decided to preempt our action,” Redmond said.
SAC still plans to hold an action tomorrow at the site, now a pile of rubble – pointing out that there are eleven more abandoned, bank-owned properties on the same block (Friday, January 28, 11 a.m., 4924 W. Gladys).
“Tearing this building down is not the answer,” Redmond said. “The city should be working with the community and banks to ensure homes are rehabbed and families are moved in.”
The building made TV last week when mayoral candidate Miguel del Valle joined SAC in a press conference there.
The home was fully habitable, Redmond said, and fell into extreme disrepair only after it was foreclosed on – which was nearly three years ago. Progress Illinois recently described it as an “absolute wreck,” with a back door flapping open, broken windows, metal and wiring stripped, and debris including liquor bottles and plastic baggies indicating a haven for drug use (see PI’s photos at Flickr).
PI also traced the tortuous trail of ownership of the building’s mortgage, from First Franklin to Merrill Lynch to Bank of America to an outfit in Florida.
The other abandoned homes on the block are “good solid structures and they can be saved,” Redmond said. “The problem is if they’re just going to tear these buildings down and create empty lots, that’s not beneficial to the community” — especially “large numbers of people who can’t find housing.”
Loan servicers walking away
A recent report by the Woodstock Institute found the foreclosure crisis has left thousands of vacant homes that are poorly maintained, lack clear ownership, and threaten neighborhood stability. Loan servicers “may choose to reduce the costs associated with a long-term vacant home by walking away from the foreclosure process instead of completing it or may avoid maintaining a vacant home,” according to the report.
Examining city data, Woodstock identified thousands of homes where foreclosure has been filed but not concluded – raising concerns that servicers have abandoned the process – or where it’s likely lenders have taken possession but not registered as required.
Woodstock estimated that the abandoned homes could cost the city as much as $36 million for legal, security, police, and demolition expenses.
But a proposal to update the city’s vacant properties ordinance to deal with the crisis has languished in the City Council, said Braden Listmann of Action Now.
The current ordinance requires registration and board-up but applies to the owner of the property, leaving a large gap during a drawn-out foreclosure process, Listmann said. And fines and fees can be difficult to collect, he added.
An ordinance introduced by Ald. Pat Dowell at the request of Action Now and other groups would hold a servicer or lender who files foreclosure responsible for registering, securing the building, and posting a $10,000 bond which could be tapped for fines and fees.
To aid enforcement, it would also provide a 5 percent finders fee on any fines for residents who report an abandoned property and do the research to determine its owner.
The ordinance was introduced in July and remains stalled in the council’s housing committee.
Also stalled is the Sweet Home Chicago ordinance, which would tap TIF funds to rehab foreclosed properties as affordable housing.
“These are two measures that would help the foreclosure crisis, and the City Council needs to move on them,” Listmann said. “They would help the city, the state, our communities, the economy – they would make sure buildings aren’t falling apart and provide money to reoccupy them.”