Mayor Richard M. Daley said a new housing program he unveiled earlier this month will ultimately help increase property value in Chicago communities hit hard by the foreclosure crisis.
Mayor Richard M. Daley said a new housing program he unveiled earlier this month will ultimately help increase property value in Chicago communities hit hard by the foreclosure crisis.
“Foreclosures have a devastating impact on homeowners and communities,” Daley said. “Our primary goal is to get foreclosed properties up to code and occupied.”
To achieve this goal, the city plans to use $55 million in federal funds it received last year from the Housing and Economic Recovery Act of 2008 to help stabilize neighborhoods most impacted by foreclosures.
Under the program, the city would buy the foreclosed properties, fix them up and sell them to developers participating in the program. The developers would then be responsible for selling the homes on the open market.
City officials said they expect to put 2,000 to 2,500 vacant and foreclosed properties back to use over the next three to five years. To manage this effort, an umbrella organization, Mercy Portfolio Services, will manage the process of acquiring, redeveloping and repositioning properties in the target areas.
Some of the communities that stand to benefit from the program include Roseland and Englewood on the South Side and North Lawndale and Austin on the West Side, all of which had some of the highest foreclosure filings in 2008, according to RealtyTrac Inc., a California-based online real estate marketplace company.
The city’s First Deputy Community Development Commissioner Ellen Sahli said there were over 9,000 foreclosures filed in Chicago alone last year.
The city also received $16 million in private funding to help implement the initiative. The MacArthur Foundation in Chicago is supporting this initiative with a $500,000 grant and a $15 million long-term, low interest loan. Living Cities Inc., a national consortium of foundations and financial institutions, and Bank of America and Citigroup also made financial contributions to the program.
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