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May 2009
State must cure
plague of abandoned
homes
May 21, 2009
When a
single home
is
foreclosed,
the pain is
felt largely
within those
four walls.
But when the
number
reaches
115,000, as
it did in
Illinois in
2008, and
foreclosures
in a single
community
reach 1,000,
as they did
in Austin in
2008, we all
feel it.
Foreclosures
hurt a
city's tax
base and
generate new
expenses
when
abandoned
homes must
be cleaned
up. For
neighbors,
abandoned
homes almost
always mean
lower
property
values, as
well as more
crime.
But in
Illinois,
local
governments
have limited
powers to
soften the
foreclosure
blow. They
lack
effective
tools to
deal with
vacant and
abandoned
homes, many
of which
quickly
become
dilapidated
eyesores or,
worse,
havens for
squatters
and targets
for
scavengers.
Two bills
pending in
the state
Legislature
would help
change that,
and we
enthusiastically
endorse
both.
The two
proposals,
House Bill
1195 and
Senate Bill
2101, are
supported by
the City of
Chicago,
other local
governments
and several
municipal
organizations,
including
the
Metropolitan
Mayors
Caucus, the
DuPage
Mayors and
Managers
Conference
and the
South
Suburban
Mayors and
Managers
Association.
Collectively,
the bills
give local
governments
their best
shot at
taking on
blighted,
vacant and
abandoned
homes. The
new powers
for local
governments
would
include:
• • The
ability to
force
lenders to
do more to
maintain
properties:
After a
foreclosure
filing,
mortgage
lenders are
supposed to
inspect a
home and
keep it safe
and secure.
Some lenders
do this
faithfully,
but far too
many do not
-- or do it
only
half-heartedly.
If a lender
fails to do
the job, the
municipality
is left
holding the
bag.
One of the
bills would
allow local
governments
to create
ordinances,
specifically
for vacant
and
abandoned
properties,
that give
explicit
upfront
responsibility
for
maintaining
these
properties
to the
lender, not
the
municipality.
If the bank
doesn't do
it, the
local
government
can do the
work and
recover the
costs from
the lenders.
Now,
municipalities
rarely
recover
their costs.
Generally,
bankers have
opposed
similar
proposals
around the
country.
They worry
about the
costs and
say they
already do
enough to
keep
foreclosed
homes
secure. But
drive down
any hard-hit
Chicago
street and
you'll
likely draw
another
conclusion.
The Illinois
Bankers
Association
told us in a
statement
that it
recognizes
issues exist
with
abandoned
properties
and said it
is "working
tirelessly"
on
legislation
to address
this. We
applaud
their
involvement
and urge
them to
support the
legislation
as written.
• • Establishing
land banks:
This
proposal,
like the
property
maintenance
provision,
is
particularly
controversial.
It would
allow local
governments
to create
land banks,
which can
acquire,
maintain and
sell vacant
properties.
Land banks
have been in
existence in
the United
States since
the 1980s
and, when
well-structured,
have proved
to be an
effective
tool in
reducing the
number of
vacant
properties.
In a perfect
world, we'd
like to
leave this
to the
private
sector, but
the market
has failed
communities
that have a
glut of
vacant
properties.
The Illinois
Association
of Realtors
opposes land
banks, but
could not
explain to
us exactly
why, save
for a
general
philosophical
objection to
government
expansion.
The group's
spokesman
said land
banks could
affect the
real estate
market in
"some
significant
ways," but
did not cite
a single
specific
negative
consequence
resulting
from the
actions of
the many
land banks
already in
existence.
• • Early
notice of
foreclosure
action:
Local
governments
often learn
of a
foreclosure
only after a
property has
already gone
bad. One of
these two
bills
requires
early
notification
to a
municipality
of
foreclosure
or a tax
sale, often
a precursor
to a
foreclosure.
And, most
important,
this would
include
up-to-date,
detailed
information
on how a
municipality
can contact
the lender.
As it is
now, strange
as this may
seem, towns
often can't
figure out
how to
contact the
lender
responsible
for a
mortgage on
a house.
Illinois'
Stalking and
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House Bill 2542 -
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This story can be
found at
eNews Park Forest -
Park Forest, IL, USA
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