When a family loses its home to foreclosure, the entire community feels the ripple effects. A sudden change in address may rip a child from his classroom mid-year. Local employers may be involved, perhaps because a recent layoff caused the family to miss a mortgage payment, or because time off work is needed to arrange a new living situation. If one foreclosure is among many, neighbors will start to fret over their own property values, as local elected officials try to get their arms around this devastating community-wide problem.
This pattern is playing out in towns and cities across metropolitan Chicago and the nation. In the past year alone, more than 30,000 households in northeastern Illinois alone have lost their homes to foreclosure.
In fall 2008, the U.S. Dept. of Housing and Urban Development responded with the Neighborhood Stabilization Program (NSP), nearly $4 billion to assist state and local governments in acquiring and redeveloping foreclosed properties before they become sources of abandonment and blight. Illinois received $172.5 million, including about $55 million for Chicago and about $64 million for surrounding municipalities and Cook, DuPage, Kane, Lake, McHenry and Will counties.
The money will help. However, the designated funding is nowhere near enough to address every foreclosed property in the region – and it comes with many time-consuming and sometimes confusing regulations attached.
Keenly aware that the NSP funding is critical to keep the region an attractive place to live and work, Chicago-area leaders have joined forces to meet the challenge of putting this money to its best use, and fast. They’re bridging political and municipal boundaries, and partnering with local employers such as Charter One and regional organizations such as the Metropolitan Mayors Caucus and Metropolitan Planning Council to pilot an inter-jurisdictional approach that will target a portion of these dollars to mixed-income communities near transit lines and job centers.
This isn’t the only inter-jurisdictional housing effort in Chicagoland; in the past two years, communities across the region have begun to recognize that by working together, and with the private sector, they can get more done to address the area’s shortage of quality, affordable and workforce housing. If there’s a silver lining to the foreclosure crisis, it’s that the urgency around it and NSP funds has accelerated these efforts.
Communities in the South Suburbs and West Suburban Cook County have formed NSP advisory committees, each of which will have a coordinator who will be accountable to all participating towns, and work with local mayors, employers, developers and state, federal and county governments to get the most from this money. Having one point of contact for a group of towns also will streamline ongoing evaluation of these projects, which not only must address foreclosures, but also are supposed to complement local community plans.
It is expected that, as has been the case with economic stimulus funding, a second and perhaps third round of NSP funding will be approved. What is learned through Chicagoland’s cooperative efforts can help shape and improve these additional rounds of funding.
New partnerships and strategies honed through the NSP process also can inform other near-term opportunities. As local communities begin to put their economic stimulus dollars to use - and as Illinois anticipates the passage of its next capital infrastructure bill – communities working together across boundaries to address shared housing concerns can help to push the state to reward smart planning proposals that link housing, transportation and jobs.
The bottom line is that even before the foreclosure crisis, metropolitan Chicago needed more communities where people can afford to live near good jobs, and where they have real options for how they get around. Shared efforts to maximize NSP dollars are helping jump-start this idea that Chicagoland can build upon existing and create new public and private partnerships to thoughtfully address our shared housing challenges.