Lisa Simpson
May 12,2010
In: Foreclosures

Suburban Cities Club Together for Housing Aid in Vain

Foreclosure in the suburban cities of Chicago.

Many suburban cities in the Chicago region clubbed together to avail of a housing aid as per the advice of a government housing agency but it was all in vain. They had hoped to dip into a $2 billion fund earmarked for renovating foreclosed houses. On 14th January HUD did not include the names of these cities in their announcement. But Chicago whose foreclosure numbers had declined in 2009 was given $98 million.

This unfairness has frustrated the mayors, realtors and residents of these suburban towns whose resources are limited and insufficient to address the problem of increasing empty foreclosed houses. The failure of these cities to avail of federal funds poses questions about the impact of the plans of the Obama administration. The insane crisscrossing of rivaling jurisdiction is coming in the way of development of the regions.

David Pope of Oak Park speaking on foreclosures said it was “a regional issue, where groups of communities can be negatively impacted by what’s going on in one or more of those communities or in the broader region as a whole. The federal response and state response have been inadequate to the task up to this point.”

The officials of the suburban cities were critical of the Federal plan Neighborhood Stabilization Program. It gives encouragement to the cities to get together to tackle the local problems but despite this talk, the dollars were given to Chicago. Foreclosures in the suburbs counted together are more than those in Chicago. In many communities the concentration ratio is the same as that of Chicago. It is the number for foreclosures per one thousand residential houses.

Compared to Las Vegas, Phoenix and many cities of Florida, Chicago metro region is better off. Nevertheless in foreclosure concentrated regions the problem is taxing because these empty homes attract criminal gangs and bring down the property value of adjacent units. It increases the cost of maintaining these houses and policing the area.

To tackle this, the governments of the cities and counties of the suburbs united in 2009 to apply for this rehabilitation funds that were part of the stabilization program with a budget of $2 billion. Behind this request for $7.87 million, the administrators had jumbo plans. They targeted rehabilitation of 408 houses, raze to the ground 121 units and develop 97 empty plots.