Tackling the Legacy of Foreclosure

Excerpts from article in the September/October Issue of Urban Land Magazine | Written by Elizabeth Razzi
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A new land bank in Cook County, IL plans to bring vacant foreclosed homes back to productive life.

The home foreclosure crisis hit Chicago and surrounding Cook County particularly hard.  As of summer 2012, nearly 10% of the county’s housing units were vacant, and more than 85,000 foreclosure cases were pending.  That is when Cook County officials and community leaders kicked off a push to establish a land bank that would be empowered to cut through legal and financial red tape to help get vacant properties ready for productive use again.

“There is a market failure right now.  We have unprecedented vacancies, and there are developers willing to develop who can’t get title for two years, and when they do, the city is unwilling to release liens for unpaid water taxes,” County Commissioner Bridget Gainer, CCLB, chairman explained.

FACTS:

  •  The Cook County Land Bank (CCLB) is the largest in the nation measured by territory covered.
  • It is designed to selectively acquire vacant properties, maintain and improve them, resolve title and unpaid tax issues, and make the properties available for the private sector to purchase and redevelop.
  • A start-up grant of $149,000 was provided by the Center for Community Progress, the nationwide authority on establishing land banks.
  • CCLB was later awarded an additional $6 million in July 2013 from Illinois’s portion of the national foreclosure settlement.
  • A technical assistance panel (TAP) convened by ULI Chicago in October 2012 provided advice on forming a land bank.

Scott Goldstein, principal with Teska Associates, an urban planning firm in Chicago, was chairman of the TAP.  “They really relied on ULI TAP to fashion the ordinance,” he says.  In particular, the organizers sought advice on how a land bank would be viewed by the private sector and on how best to structure its governance, he notes.

“We found that the private sector would benefit greatly,” Goldstein says.  He notes that the state of the housing market in Cook County is very mixed. with some areas experiencing a strong market but others remaining very weak.

“There are areas in Cook County that really need a shot in the arm,” he says.  The county ordinance establishing the land bank closely followed the TAP’s recommendations that it be an independent, nonprofit, and quasi-government agency – the latter being a key factor enabling the CCLB to resolve tax and lien issues.

“Cautious but Smart” – TAP advice to the land bank.

The CCLB has partnered with the Institute for Housing Studies at DePaul University to develop an open-source analytics tool to help the land bank make informed decisions about acquisition and development.