I visited WBEZ's Afternoon Shift today with Rami Nashashibi, executive director of the Inner-city Muslim Action Network, to talk about The Reporter's investigation into Chicago’s vacant property epidemic. If epidemic seems too strong a word, look at this map, which shows the sheer glut — we’re talking more than 18,000 — of abandoned houses and apartment buildings scattered across the city. Nearly 1 out of 5 properties has likely been vacant since the early days of the foreclosure crisis in 2008 and 2009. Click through the years and watch how the number of tiny dots — each one a vacant home — pile up.
Roughly half of these properties are linked to six banks — Bank of New York, US Bank, Bank of America, Wells Fargo, JPMorgan Chase and Deutsche Bank — that do big business with City Hall. According to city payment records, those institutions have managed $1.4 billion worth of taxpayer money as depositories or provided credit or debt services since the housing market collapsed in 2008.
Some housing activists have put city officials on the spot, asking why these banks keep getting business while they allow their blighted buildings to fester, breeding crime and depressing surrounding property values. The message from City Hall: The public needs the banks more than the banks need the public. The rationale is that each bank has special bonding capacity, and city officials need to protect relationships for future borrowing.
Ironically, while one arm of City Hall is doing business with these banks, another is taking their properties to court. In just the last two years, city attorneys have filed lawsuits against properties linked to financial institutions that own or manage them because they fail to keep up with simple maintenance like boarding over the windows and doors.
The big question is what’s next for all of these abandoned buildings? Federal regulations require banks to dump properties within five years of vacancy. By our count, there are 3,094 properties that have hit that five year mark, but nothing has been done. Turns out the rules only apply to properties that are owned outright by banks, which isn’t the case for most of Chicago’s vacant properties where ownership is tangled between banks, investors and their former owners.
Bryan Hubbard, a spokesman for the U.S. Department of the Treasury’s Office of the Comptroller of the Currency says once a bank takes title to a property that “starts the clock running on the legal requirement to dispose.” The problem is a title transfer doesn’t always happen. Take the building we wrote about at 6210 S. Fairfield Ave. for example. Four years after the former owner walked away and the mortgage had been sold twice, the title was still in her name.
Neighbors of that building decided that housing court seemed like the best way to “smoke out” the true owners’ identity. It took two years, but they were able to prove the building was abandoned. They reclaimed it, IMAN rehabbed it and turned a crime-infested building into a home again.
Rob Grossinger, a vice president of the nonprofit Enterprise Community Partners Inc. who oversees neighborhood stabilization programs in Chicago and across the country, tells us that what’s happening on this small stretch of South Fairfield is often a neighborhood’s best hope for recovery.
“What a community has to do is zero in on a block or two blocks,” he says. “You might have six financial institutions to deal with, but at the neighborhood level, these are people who are willing to do it.” It isn’t exactly a systemic solution, but amid lax federal regulators and a limp crackdown by city officials, it’s the most practical one.