Rehabbing Foreclosed Houses

Last updated on: July 1, 2017 at 11:25 am by William Droel

Rehabbing Foreclosed Houses 2017-07-01T11:25:43-06:00 William Droel

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I moved into Chicago’s Marquette Park neighborhood in the late 1970s and within seven years bought the home there in which my family still resides. Neighborhood stability and the quality of housing were of concern in the 1970s and with ebbs-and-flows remain so today.

Prior to the real estate collapse of 2008, we were plagued by sub-prime lenders who deceived immigrant homebuyers. Thus, from the late 1990s and into the early years of this century our community organization, Southwest Organizing Project (www.swopchicago.org), made regular visits to those culpable lenders. I recall one Saturday when we went to a storefront loan office on Cicero Ave. bearing a nationally-known name. The manager who greeted us, I was surprised to see, was a young woman I had known since her grammar school days. She had no prior experience in real estate or in banking and thus, unsurprisingly, had no acceptable answers to our questions. On another day, in the company of our local bishop and many neighbors, SWOP took a walk and put a symbol on each property owned by a specific predatory lender. (No, we did not graffiti the property; it was a warning symbol.)
The international real estate collapse of 2008 hit our neighborhood hard. Late that year SWOP, which has 33 institutional members (several churches, a synagogue, a Muslim network, schools and agencies), produced a neighborhood map with a dot on each foreclosed property. Except for the 320-acre park area and some industrial property, the dots nearly blotted out the entire map. (For those who know Chicago: The map covers east of Midway Airport to Western Ave.; from 55th St. on the north to Marquette Park itself on the south. This map, by the way, proved useful to those attorneys representing our neighbors in eviction court. Despite their disgrace from the 2008 collapse, a handful of nationally-known banks continue to haunt our neighborhood with their zombie-like properties.)

SWOP leaders started to think about getting ahead of the problem. They decided to get into the housing rehab and rental business. As a pilot area, those leaders picked what until recent years was called the Lithuanian Corridor, a few blocks within the southeast corner of our neighborhood.
Back when I came to Chicago (the late 1970s) the Lithuanian Plaza was a fun spot—at least for me. Dinner in one of the small restaurants was hearty and inexpensive. A big wave of Lithuanian-Americans arrived in Chicago early in the 1900s. Many worked in the stockyards and related industries. In fact, the well-known novel about those stockyards, The Jungle by Upton Sinclair (1906), featured a Lithuanian-American protagonist. (For an update, get Slaughterhouse: Chicago’s Union Stockyard by our former neighbor Dominic Pacyga, University of Chicago Press, 2015.) In recent years several absentee landlords owned the houses in the former Lithuanian-American area. Then came the predatory lender invasion; a favorite tasty restaurant gave way to a shuttered storefront, other businesses closed and eventually the foreclosed houses appeared. The only remnants of a once vibrant Lithuanian-American community are a motherhouse for Sisters of St. Casmir, Draugas newspaper office several blocks away, a museum over on Pulaski Rd. and a monument in the park.

To meet its initial goal of reclaiming 100 housing units, SWOP sought help from Brinshore Development (www.brinshore.com), Local Initiatives Support Corp. (www.lisc-chicago.org), Neighborhood Housing Service (www.nhschicago.org) and the local affiliate of Industrial Areas Foundation, United Power (www.united-power.org).
In late May of this year my family, along with about 120 of our neighbors and some visitors from other areas around Chicago, gathered in the well-kept St. Adrian Catholic church in SWOP’s initial target area. The purpose was to launch an expansion of the rehab project to eventually total 70 blocks. SWOP estimates a need for $10million to complete this second phase. There was excitement at the meeting when LISC Chicago immediately pledged $1million.
Eviction has spillover effects, as Matthew Desmond compellingly details in Evicted: Poverty and Profit in the American City (Penguin Random House, 2016). The foreclosure crisis in SWOP’s target section of our neighborhood, for example, was accompanied by private school closings, an uptick in crime statistics and general transience. Thus, SWOP’s challenge of finding $9million is in a sense not the top priority. Hardware alone does not get us ahead; in itself it does not make for neighborly conviviality, for safety, or for educational attainment. SWOP wisely makes a priority of one-by-one relationships and consequently reports some reduction in crime in its original target area and somewhat improved standard test results in nearby public schools. Can the software side of neighborhood rehab continue along with the hardware side? And, is there some way SWOP’s success can be replicated elsewhere in our city? To be continued…

Droel edits a printed newsletter about faith and work, INITIATIVES (PO Box 291102, Chicago, IL 60629). To offset misinterpretation about our neighborhood, allow me to quickly share that over the first 20 years after our purchase, the value of our home increased three-fold. This period included the run up to the recession, after which we took a hit. Now, the property value is back again to in excess of two-times our original purchase.

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