Rebuilding Chicago’s Neighborhoods: On the Agenda at Impact Chicago

Trust grants help homeowners avoid foreclosure, renovate vacant homes and develop more affordable housing. Tweet This

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Economic indicators show the nation’s gradual recovery from the depth of the Great Recession. But metropolitan Chicago is still contending with the lingering effects of a foreclosure crisis of unprecedented size and complexity. A candid look at the fallout—and the most effective solutions—was on the agenda at Impact Chicago: Rebuilding Our Communities.

Impact Chicago is a series of briefings designed to help donors amplify their philanthropy. The Trust introduces the leading nonprofits and approaches that are moving the needle on the critical issues, or invites experts to lead a deep dive into best practices in charitable giving.

The spring 2015 event in the series centered on an exploration of strategies for bolstering homeownership and affordable housing as crucial pillars of stable, thriving communities. Panelists Terry Mazany (link to bio page) and Brandon Thorne  were joined by Adam Gross, director of affordable housing for BPI; Calvin L. Holmes, president of the Chicago Community Loan Fund; and Geoff Smith, executive director of the Institute for Housing Studies at DePaul University.

Initially triggered by the subprime mortgage collapse, the nationwide foreclosure crisis hit the Chicago region in late 2007. A deep economic recession and pervasive unemployment soon followed. By 2008, the crisis had reached unprecedented levels. According to the Woodstock Institute think tank, 377,910 foreclosures were filed between 2007 and 2013 in the six-county area.

The hardest and earliest hit areas were neighborhoods and suburbs with primarily African-American and Latino residents, who were targets of subprime lending and mortgage fraud. The crisis spread rapidly throughout the region, leaving a track of vacant homes, failed condominium buildings and declining home values.

Smith used the Institute’s research data to demonstrate how foreclosures are concentrated in Chicago’s South and West side neighborhoods—and to show how the distribution has had the effect of heightening inequity between communities.

Housing prices across all neighborhoods rose equally until the economic collapse and corresponding foreclosure crisis period of 2007-2008. At that point, home prices dropped—but prices in neighborhoods with high rates of foreclosures plummeted far more steeply than those in moderate and low-foreclosure areas. As the crisis eased in 2012 and housing markets began to recover, this disparity persisted; home prices remained closely proportionate to their neighborhoods’ foreclosure density, leaving communities sharply stratified.

Because The Chicago Community Trust believes homeownership and affordable housing are crucial to stable and thriving communities, the Trust supports agencies that help struggling homeowners stave off foreclosure, promote homeownership and put vacant homes back into productive use by providing housing counseling that covers the purchasing process, foreclosure prevention and financial literacy. The Trust awarded grants in 2014 that will help prevent nearly 4,000 foreclosures and create more than 200 new homeowners.

In addition to stabilizing communities by keeping residents in their homes and establishing new homeowners, the Trust has provided funds to develop new units of affordable rental housing. Trust funding in 2014 will aid in the development and preservation of 2,162 affordable housing units.

The Trust also supports policy and advocacy work that promotes affordable rental housing. That support has led to an increase in the number of public housing units and to the passage of the Keep Chicago Renting Ordinance. The law requires banks that take over foreclosed rental buildings to act as landlords and let tenants stay in their homes, or pay a relocation fee of $10,600 to each family they displace.

For a closer look at the progress Chicago is making towards stable and thriving neighborhoods, the Rebuilding Our Communities fact sheet identifies exemplary programs funded by the Trust that help prevent and tackle foreclosures, as well as preserve and create affordable housing.