Combating Problems of Vacant and Abandoned Properties
Mayor Richard M. Daley
Comprehensive Attack on Troubled and Vacant Buildings

From “Combating Problems of Vacant and Abandoned Properties Best Practices in 27 Cities”, presented at the United States Conference of Mayors June 2006 meeting.

The City of Chicago, in combating problem properties that reduce the quality of life in neighborhoods, has recognized that troubled and vacant buildings pose public safety problems, lower property values and contribute to neighborhood blight. Despite aggressive prosecution and fines against owners of troubled multifamily buildings many owners continually failed to make court-ordered repairs. Properties sometimes languished in Housing Court, frustrating tenants, neighbors, community leaders and City Staff.

In an effort to comprehensively address the causes and effects of troubled buildings, the City has implemented a Troubled Buildings Initiative, enhanced its existing Vacant Buildings Program and promoted its Homeownership Preservation Initiative.

The Troubled Buildings Initiative

Three years ago, the City developed an interdepartmental initiative to preserve its existing multifamily housing stock and to ensure that owners and managers were qualified. This initiative included the Departments of Housing, Law, Buildings, Police, Water, Planning, Streets and Sanitation and Human Services and a nonprofit partner, the Community Investment Corporation.

The City developed a new, streamlined procedure so that departments could more efficiently coordinate efforts to address troubled buildings. The procedure ensured that code violations could be identified and resolved in a timelier manner, decreasing the negative impact of troubled buildings on their surrounding neighborhoods.

This initiative requires significant investments of staff time and resources, to handle ongoing tracking of properties, coordination of departmental efforts, and strategic interventions.

Vacant Buildings Program

Building on the success of these initial efforts, in 2006 the City expanded the program to include vacant buildings. The City is now proactively averting the creation of troubled buildings through preventative measures and reacting to troubled buildings that have become catalysts for criminal activity.

In April 2006 there were 5,100 vacant buildings in Chicago, of which 475 were open. While all vacant buildings pose problems to a neighborhood, open buildings are particularly troublesome because of the public safety issues they create.

The goal for the expanded initiative is to reduce the existing list of 475 vacant and open buildings by at least 75 percent in one year. This will be achieved by securing the buildings according to Municipal Code, making them inaccessible to the public and off-limits to criminal activity and rehabilitating, demolishing, forfeiting or selling at least half of the buildings.

The Vacant Building Initiative is a multi-departmental effort involving the Department of Police, Buildings, Law and Housing. Departmental roles include:

• Police: Issuing citations to building owners for failure to secure the vacant building and failure to post a watchman at the building. Each building will be cited on multiple dates to increase potential penalties for non-compliance. Fines of $1,000 per day can be assessed with a cap at $50,000.
• Buildings: Inspecting vacant buildings that remain open following the issuance of citations by police. For roughly half of the buildings that will remain open post-citation, each must have complete interior and exterior inspections. For all 475 vacant buildings, the Department of Buildings will create and maintain a Web site, including a photo, ownership information, and information on the status of City enforcement action.
• Law: Prosecuting all vacant and open buildings that are sent to the Department of Administrative Hearings and the Circuit Court of Cook County. For police citations, the City will seek fines and orders to secure the buildings at the Department of Administrative Hearings. For non-compliant buildings, inspections will occur and the Law Department will prosecute those violations at the Circuit Court of Cook County. For prosecuted violations, the Law Department will seek four basic remedies: demolition, forfeiture, forced rehabilitation, or forced sale.
• Housing; Working with the Law Department on non-compliance cases. Housing will identify buildings that are salvageable and work with the Law Department to force the owner to rehabilitate or sell or transfer the title to an owner who is willing to perform the rehabilitation

In addition to departmental coordination, the City will also be working very closely with two outside agencies, the Community Investment Corporation and Neighborhood Housing Services. These organizations will be relied upon for identifying viable owners to take over buildings or will be called upon to take ownership of these properties themselves.

Homeownership Preservation Initiative

A complement to the City’s programs to address buildings that are already in distress, the Homeownership Prevention Initiative proactively prevents buildings in neighborhoods from becoming vacant. Tackling foreclosure is part of this larger strategy to address the root causes of vacant buildings.

The number of foreclosures initiated in the City of Chicago increased by 91 percent between 1993 and 2002. A recent study of foreclosure costs by Neighborworks America estimated that a single foreclosed vacant property can cost municipalities up to $30,000: costs are associated with police and fire protection, clean-up of debris, court costs, unpaid water bills and possibly demolition. It is much more cost-effective for municipalities to prevent foreclosure by funding homeowner counseling and assistance.

Responding to the alarming increase in foreclosures, the Departments of Housing, Neighborhood Housing Services of Chicago and more than 20 financial institutions launched the Homeownership Preservation Initiative (HOPI). The goals of HOPI are to help families avoid foreclosure whenever possible and, when foreclosure is inevitable, to reclaim vacant properties for affordable housing. As part of this effort, to reach homeowners at risk of foreclosure, the City launched an Every Minute Counts Campaign that encourages homeowners to call 311 (the City’s non-emergency hotline) at the first sign of mortgage delinquency. Callers are immediately connected to a credit counseling agency for a free telephone counseling session. The counseling agency;

• Provides an in-depth assessment of the homeowner’s financial situation and an individual action plan:
• Serves as a liaison between the homeowner and the mortgage company, where appropriate, to advocate for a repayment plan, loan modification or other loss mitigation strategy that will help the homeowner avoid foreclosure; and
• Provides referrals to local resources, where appropriate, for job training, tax assistance, emergency grants and foreclosure prevention classes.

Counseling is much more likely to result in a positive outcome if the homeowner seeks help early in the process. Unfortunately, many homeowners wait until it is too late to resolve the delinquency through loss mitigation or workout. In addition, many homeowners seek help from “rescue” firms that only worsen the homeowner’s financial plight. The City’s challenge has been to encourage homeowners to seek timely assistance from legitimate credit counseling agencies funded by the City.

To accomplish this, the City has expanded its partnership with faith-based organizations and nonprofits and increased its marketing in high foreclosure zip codes. In February 2006 approximately 20 pastors participated in an outreach Sunday and included the City’s Homeownership Preservation message in their sermons. In addition, the City expanded its marketing on cable television and radio and conducted target mailings. These efforts resulted in more than 300 families calling 311 for assistance in the first quarter of 2006.

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