Foreclosures decline, same areas still struggling
Since the economic downturn, the number of abandoned homes in Chicago has been on the rise. But, a recent RealtyTrac report indicates this trend may be tapering off.
The Sept. 10 report showed Chicago foreclosure filings decreased by almost 60 percent from August 2012 to August 2013. The statistics demonstrate what many experts see as a sign of positive change as the housing market slowly bounces back to its pre-recession state, according to Spencer Cowan, a foreclosure expert at the Woodstock Institute, a group that promotes economic security for low-income groups in the city.
“It’s good to see the numbers going into foreclosure are declining. It means that maybe we’re getting back on track to a more normal housing market,” Cowan said.
The decrease in foreclosure filings can be attributed to the improving job market and the impact of so many past foreclosures being processed already, Cowan said.
Despite overall city foreclosures decreasing, many neighborhoods are still plagued by a high percentage of foreclosure filings and abandoned homes, particularly in less affluent areas, Cowan said.
“The vacancies have increased in lower-income communities more than in most of the other higher-income communities,” Cowan said. “Along the north part of Chicago, those areas are improving. [In] those areas, the market has really picked up and there is a lot more demand. Other areas, and I think particularly the South and West sides, less so.”
Low-paying jobs and their instability led many victims of foreclosure to homelessness, said Julie Dworkin, policy director at the Chicago Coalition for the Homeless.
“The lower your income, the more likely it is you’re going to become homeless because you’re going to have less of a safety net,” Dworkin said. “If you’re using a lot of your income for rent and something goes wrong, you’re more likely to become homeless.”
Dworkin said renters affected by foreclosure are more likely to face homelessness than homeowners. Renters make up a significant percentage of the Chicago housing market, and as a result are the more frequent victims of foreclosure, according to John Bartlett, executive director of the Metropolitan Tenants Organization, a Chicago group that assists renters whose landlords fall victim to foreclosure.
Bartlett said handling foreclosure is more difficult for renters than homeowners.
“Sometimes [renters] don’t even know what’s happening,” Bartlett said. “There’s either a new owner coming or just the repairs aren’t getting done … landlords quit maintenance and there’s no one there that wants to pick up the ball … and the tenants are left living in ever-deteriorating conditions.”
The poor conditions of these buildings often affect the community in a negative way because they are frequently not maintained by the foreclosing banks, Bartlett said. When vacant homes and apartment buildings are left to fall apart, the beauty of a neighborhood is diminished, Bartlett added.
“In many ways it would be to the community and everybody’s advantage to keep people in the buildings, even if they’re not paying any rent, because at least they’re in there keeping things maintained,” Bartlett said.
Cowan said a way to prevent foreclosures is having homeowners and tenants negotiate with their banks or landlords to decrease mortgage payments when they find themselves struggling to make ends meet, such as when they lose a job or receive a pay cut, which can occur in this economy.
Cowan said vacant buildings have always been a problem in Chicago, but their prevalence has increased significantly since the foreclosure crisis, reducing the value of the homes around them.
“If you drove into a neighborhood looking to buy a house and you saw two boarded-up buildings on the block … that’s less attractive than if all the houses are occupied. That’s not a good thing to have on your block,” Cowan said.
The foreclosure crisis is not entirely to blame for the vacancies because people have been moving out of Chicago, particularly South and West sides neighborhoods, for decades, leaving homes empty and deteriorating, Cowan said.
Cowan said the housing market’s recovery has a long way to go in neighborhoods on the South and West sides, but overall the city is on the way to recovery.
“The fact that auctions remain high isn’t great but at least it’s a sign that properties are working through the system,” Cowan said. “They’re being sold to people who have resources to keep them up and hopefully they’re being sold to people who keep them up. But the recovery isn’t even.”