Chicago property law fails to end impact of redlining, reports say

Nearly 80-year-old law aimed at returning distressed, tax-delinquent Chicago-area properties to productive use has done little to ameliorate or address racial inequities in neighborhoods, study finds blacks and latinos in the city.

A report released Tuesday by the Cook County Treasurer’s Office proposes removing or changing Illinois’ treasure sale law in favor of tax cuts and other programs that could allow homeowners of color to to accumulate generational wealth.

Other recommendations include creating listings of available properties open to the public, promoting legislation lowering the interest rate Cook County charges on overdue property tax payments, and allowing property owners to make payments. partial to satisfy tax liens.

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« The biggest issues are liens on property, » said Hal Dardick, the study’s author. « By the time (the properties) come up for sale, many are overdue, decaying. You have to pay the taxes when you don’t even own the house. »

Treasurer Maria Pappas expects the study to be filed in the coming weeks with the County Board and shared with the State Assembly and Governor JB Pritzker.

The study blames the deterioration of many neighborhoods of color and the exodus of black people from Chicago on federal and banking policies called redlining, the practice of banks discriminating against racial minorities or certain neighborhoods.

Last October, the Department of Justice announced a whole-of-government effort to investigate and prosecute.

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The treasure sale law was meant to be « a solution to redlining, but it didn’t work because it didn’t address redlining and the underlying lack of generational wealth » among black families, Pappas said.

After the spike in foreclosures during the Great Depression, the federal government revamped mortgage laws in an effort to prevent future economic crises.

The now defunct federal Home Owners’ Loan Corp. compiled « safety maps » between 1935 and 1940 that ranked the prospects – from best to worst – for mortgages in 239 cities across the United States. Areas deemed high lending risk were drawn in red and were most often majority black neighborhoods.

« Many of the vacant lots, abandoned homes and closed businesses in minority neighborhoods are in areas where the US government had discouraged mortgages, » the Cook County study said.

Under the Illinois Treasure Sale, which was initiated in 1943 by the Illinois General Assembly, properties with three or more years of unpaid taxes over a 20-year span are listed. auctions.

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Of the 27,358 vacant homes and lots offered at the county’s 2022 Scavenger sale, 14,085 were within the boundaries of a Chicago-area security map. Most of these 14,085 properties have been highlighted, according to the study data.

More than 72% of the 27,358 properties were in predominantly black neighborhoods and suburbs. Only 7,636 received offers.

The Scavenger sale proved insufficient to restore struggling properties in communities that have long suffered from housing discrimination, from redlining to few mortgages and below-value mortgage appraisals in minority communities, according to Pappas, who called it frustrating for residents.

« You end up giving up because there’s no easy path to success, » she said. « You’re exasperated, and for African Americans who are already disheartened by what’s happened in their neighborhood, it’s doubly devastating. It becomes a generational defeat. There’s nothing to pass on to grandchildren. . »

The study also examines similar models in Detroit, Philadelphia and other cities.

In Philadelphia, about 82% of the 6,167 publicly available properties within that city’s Federal Loan Map limits and owned by the Philadelphia Housing Development Corp. have been underlined.

Of the more than 75,500 distressed properties held by the Detroit Land Bank Authority in April, nearly 71,500 were in Home Owners’ Loan Corp. federal mapped areas. The Cook County study found that 23,967 – about 33.5% – of these properties were underlined.

« The impact (of redlining) is what you can still see today, » said Anika Goss, president and CEO of Detroit Future City, a nonprofit organization tasked with implementing a framework of 50 years for the city.

« It’s not just housing and retail redevelopment, it’s also infrastructure redevelopment, » Goss said. “These are places that have been destroyed for many, many years – where the infrastructure is extraordinarily poor. You can see vulnerable lighting, poor streetscapes, poor sidewalks – all the things that make up a valuable neighborhood. «

Detroit has demolished more than 20,000 homes and other structures since 2014 and, along with its Land Bank Authority, has been aggressive in making homes and land available to people wanting to move into the city or already living there.

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According to John Roach, spokesman for Mayor Mike Duggan, about 21,000 side lots were sold to residents, putting the land back on Detroit’s tax rolls.

Nearly 16,000 structures were auctioned or sold through programs. There is also a buy-back program that allows people living in a foreclosed home to receive the deed for $1,000 and stay in the home.