Chicago

The City of Chicago Battles Blight—By Paying for Granite Counter Tops in a Gentrifying Neighborhood

How not to deal with abandoned foreclosed homes.

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Since 2009, the city of Chicago has received $169 million from the Neighborhood Stabilization Program, a federal effort to help state and local governments ease urban blight by redeveloping foreclosed properties. Chicago has spent $140 million of that money demolishing and rehabbing homes—but not the homes you might expect.

Writing in the Chicago Reporter, Angela Caputo notes that

…or rebuilding homes, anyway.
Neighborhood Stabilization Program

in the city's poorest neighborhoods, where vacant homes can be bought for the price of a car, the hope was that [the funds] would go a long way.

But records obtained through the Freedom of Information Act show the city spent money on buildings with luxury finishes in gentrifying areas while distressed properties in some of the city's hardest hit neighborhoods were left to languish. In their grant proposal to the U.S. Department of Housing and Urban Development, city officials pledged to rehab 2,800 units, a combination of apartments, condos and single-family homes. Less than one-third were completed.

Among other details, Caputo reports that the rehabilitation of a single house in gentrifying Albany Park—complete with federally funded granite counter tops and stainless steel appliances—received more money than all of Roseland, a low-income neighborhood hit especially hard by the foreclosure crisis. (The home sold for $187,000. Rehabbing it cost $594,359.) Noting that the program funneled funds through the state government as well, she observes that it "cost an average of $65,000 more to rehab a single-family home or two-flat when it was done through the city."

So Chicago officials spent more money than was necessary to rehab fewer properties than they promised, with much of the benefit going to communities that needed help the least. Ladies and gentlemen, your government in action.

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  1. Wow! This is unbelievable! You’d think if people knew this was happening, they’d want less government, and more private-sector involvement in fixing “problems”.

    AAAHHHHHHHHHHHHHHHHHHHHahahahahahahahahahahahaha! Me so FUNNY!

  2. I take it the Chicago a-hole in charge of distributing the Neighborhood Stabilization Program funds owns a granite countertop business.

  3. in the city’s poorest neighborhoods, where vacant homes can be bought for the price of a car, the hope was that [the funds] would go a long way.

    Hope in one one hand…

  4. OT: Medicare will now pay for sex change operations.

    On Friday, “in a groundbreaking decision,” the HHS Departmental Appeals Board reversed a “three-decade-old” rule that excluded sex reassignment surgeries from procedures covered by Medicare, the AP (5/31) reports. The ruling, which “recognizes the procedures are medically necessary for people who don’t identify with their biological sex,” held in favor of Denee Mallon, 74, a transgender Army veteran whose genital reconstruction request “was denied two years ago.” Jennifer Levi, director of the Transgender Rights Project of Gay and Lesbian Advocates and Defenders, “said the ruling does not mean Medicare recipients are necessarily entitled to have sex reassignment surgery paid for by the government.”

    In its ruling, the Federal appeals board “said the current exclusion was’ no longer reasonable’ because the surgery is safe and effective and can no longer be considered experimental,” the New York Times (5/31, Rabin, Subscription Publication) reports.

    The Washington Post (5/31, Cha) reports that the ruling is “a major victory for transgender rights and a decision that is likely to put pressure on more insurers to provide coverage for such services.”

    Yeah, that’s really gonna bend the ol’ cost curve.

    1. Redefining “medically necessary” downward.

    2. Don’t worry, they’ll just put off some expensive organ transplants for a few years until those problems take care of themselves.

  5. The house at 4419 N. Kimball Ave. was rehabbed under the federally-funded Neighborhood Stabilization Program. After costing $594,359 to fix up, it sold for $187,000.

    That’s some brazen, outrageous, arrogant theft.

    1. Brazen and arrogant maybe, but outrageous? Not so much these days.

    2. I hope the city/county still assesses the value at $600k. Can you imagine oweing, say $10,000 property tax on a house worth under $200k?

      1. That’s been happening to people whose houses were rehabbed on the “Extreme Makeover” show.

  6. If nobody wants a developed property at the low price of $15K, what is the point of spending taxpayer money on rehabbing it? In neighborhoods like that the money should be spent on demolition. The city is going to funnel the rehab money where it can reap the greatest property tax revenue.

    There is no doubt that the rehab money is being wasted. But the real scam is the selling price of the house in the article. Should have gone for about 300K at worst. Somebody connected got this house for a song.

  7. Darlene Dugo, a regional vice president for Mercy Housing Portfolio Services, the nonprofit hired by the city to manage the program

    …were finished off with “condominium-grade finishes” like stainless steel appliances and granite counter tops…

    “We want to make sure we’re putting out a product that has sustainability,”Dugo added. “We want to give them the finishes they deserve.”

    I would think misallocation of this magnitude would cost Mercey Housing their contract.

    1. What the fuck does “condominium-grade finishes” mean?

      1. Typo for “codominion”.

    2. *”We want to give them the finishes they deserve.”*

      Yup, poor people “deserve” granite countertops.

      Working slobs like me, we get stuck with corian that we had to pay for ourselves.

  8. (The home sold for $187,000. Rehabbing it cost $594,359.)

    Nobody said the MULTIPLIER had to be a whole number.

    1. Or even a positive number.

      1. The multiplier in this case is a positive number: roughly 0.3

  9. “We want to give them the finishes they deserve.”

    I’d like to give you the “finish” you deserve, you parasite.

  10. There is a link in the article that is even better (although it reeks of double-think in that the question posed in one paragraph is actually answered paragraphs later without the writer noticing). Example:

    Austin said the money spent dealing with the vacant housing stock in her ward, which includes Roseland and a thin stretch of Washington Heights, has been well-spent. “What do you want me to do, leave them for a safety hazard for more rapes, more drug dealing, more crime?” she said. “There’s nobody stepping up in my ward to rehab these properties.” Not everyone agrees. Chris Smith, the director of the Roseland office of the nonprofit Neighborhood Housing Services of Chicago, said there are a number of properties that could be turned around, particularly since some of the homes are priced so low?many are worth about as much as a Honda Civic?that they could be snapped up in cash transactions.

    Followed by:

    In July, the Chicago City Council tightened the rules around maintaining vacant properties. Now, any party with an ownership stake is accountable for paying the cost of securing and maintaining vacant homes and buildings?including lenders and management companies named on their mortgage notes. In making it more expensive to hold onto a vacant home, aldermen hope that lenders and investors will sell the properties quicker.

    You can’t give property away if you wind up attaching greater liability to it.

    1. *”What do you want me to do, leave them for a safety hazard for more rapes, more drug dealing, more crime?” *

      Granite is so much better for doing rails, and it’s cool in the summertime when your getting raped on it.

  11. In making it more expensive to hold onto a vacant home, aldermen hope that lenders and investors will sell the properties quicker.

    Ooh, maybe they should raise property taxes to 100% of estimated market value. That should get things moving.

    1. As I’ve said before, Detroit is the model.

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