Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=190481
Story Retrieval Date: 8/29/2014 3:01:32 AM CST

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Backers of vacant property ordinance say city now letting banks off the hook

by David J. Unger
Oct 18, 2011


When City Council passed an ordinance that holds banks more accountable for maintaining foreclosed properties in July, Ernie Lukasik was overjoyed.


A couple months and one amendment later, Lukasik, a representative of the Northwest Side Housing Center, is not as pleased.

“Our new mayor boasted, and I quote, ‘We have the toughest law on foreclosure of any city in the country,’” an indignant Lukasik said at Monday’s committee on housing and real estate meeting. “It’s amazing to me that 60 days later, we’re looking at an amendment to weaken it.”

 

His testimony didn’t stop the committee from approving the amendment, which spells out in greater detail a bank’s responsibilities at the moment of default, but removes language that treats the banks as the owners of mortgaged properties.



 

“Unfortunately it seems the banks are once again lobbying to weaken regulation,” Lukasik said. “An amendment has been introduced that would gut some of the most important provisions in this ordinance.”


Lukasik and other critics said that the proposed changes do not address the interior maintenance of a building or the presence of squatters. The amendment would also change language to exclude commercial properties from the vacant property ordinance. 



 

City attorneys told a frustrated committee that the changes were necessary legal clarifications that would help protect the city should it face litigation over what Jeffrey Levine of the corporation counsel’s office called a legally aggressive ordinance. A state law prohibiting banks from being forced to take ownership of a home complicates the city’s attempt to hold them responsible for the properties, city attorneys said.

 

Despite unanimously approving the amendment, several aldermen took issue with the revisions, saying that the burden of maintaining vacant properties, which should rest with the banks, too often falls on the communities and the aldermen themselves.


“We’re frustrated in our ward, in our community, because we’re stuck,” said Ald. Walter Burnett (27th). “We’re stuck in the middle of deterioration and it’s killing everyone in the neighborhood.”

The ordinance’s original sponsor, Ald. Pat Dowell (3rd), who is also shepherding the revisions and who is a member of the committee, answered the complaints.

"This ordinance is not perfect, but it is an attempt and a starting point to actually having the banks address the problem buildings in our communities, without them fussing as much as they have been on the legality side of the original amendment."  

 

She added, "I think that this ordinance does go a long way to have the banks be responsive in our neighborhoods especially for things like boarding and closing of doors, cutting of grass."

Audience members were not satisfied with that, booing her comment. At another point, community members applauded when Ald. Carrie M. Austin (34th) said she was disheartened by the lawyers’ testimony, saying it prioritizes the needs of the banks over the needs of the communities afflicted with foreclosures.

 

Addressing the city’s lawyers, she said, “We crafted this ordinance to not allow our communities to continue to deteriorate, but it just seemed that when you were speaking you were defending the banks.”

 

Judith Frydland, an attorney with the city, said that the ordinance would still take a strong stance against the banks, requiring them to inspect and board up vacant buildings more quickly. 


“It puts a burden on them to inspect their properties within 60 days of default,” she said, “which is something they’ve never had to do before.”

Lukasik was unconvinced:

"'The toughest law in the country,' and we’re going to change it."