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ZOMBIE ONE

Christina Avalos/MEDILL

Vacant property on North Sheridan Road


'Zombie' properties haunt Chicago area housing recovery

by Christina Avalos
Jan 30, 2014


Thousands of Cook County residents are being haunted by their former homes. A recent study from the Woodstock Institute shows there are more than 11,700 “zombie properties,” or unresolved foreclosures, in the area, including 5,800 in Chicago.

According to the study, a property becomes a “zombie” when a bank files for foreclosure but does not actually take ownership for more than three years. Many homeowners are either left unaware that they still hold title to the property or have moved out of the area, under the impression that they can no longer legally live there.

The study examines the extent of the foreclosure crisis that hit Chicago from 2008 to 2012, which resulted in more than 217,035 foreclosures.

Researchers found 60 percent of foreclosures filed from 2008 to 2009 remained unsold by 2012. Eighteen percent of them are now considered “zombie properties.”

While properties sit in foreclosure limbo, it is unclear who actually owns them and is responsible for maintaining them. As a result, zombie properties often remain vacant and neglected for years.

This causes a major problem for realtors like Earnell Hooper, who represents properties in the Englewood area for Coldwell Banker.

“They’re dragging the entire neighborhood down,” Hooper said. “A first time home buyer does not want to live on a block with two or three vacant lots on it, no matter how low the price is."

According to the study’s findings, zombie properties are largely concentrated in low-income, non-white communities, like Englewood, Woodlawn and Washington Park. In addition, researchers found these properties are more harmful in less affluent areas, where there is less pressure to maintain the property.

Some housing experts say the prevalence of zombie properties could explain why these particular neighborhoods have not been able to bounce back from the housing crisis of 2008.

“There is a lot of talk about the housing market coming back, but the truth is it’s not coming back everywhere,” said Katie Buitrago, senior policy associate at the Woodstock Institute. “This pattern inevitably affects the affordable housing stock and makes neighborhoods less desirable, and it sometimes even encourages people to leave the neighborhood.”

One of the issues causing delay and confusion in these foreclosures is the process; it’s inefficient and time-consuming.

“The issue is the way the process is laid out, it’s a big spiral of back and forth,” said Jarome Baker, foreclosure counselor with Neighborhood Housing Services Inc. “The banks and [Cook County Circuit] court simply do not have the capacity to deal with all of these cases.”

Researchers suggest more communication among banks, residents and courts, requiring banks to notify involved parties when they decide to stop pursuing a foreclosure.

In addition, researchers call for vacant building city ordinances that hold servicers and mortgagees accountable for maintaining homes. That is even before taking a title to a home, as a way of finding a responsible party to maintain vacant and abandoned homes when the property owner cannot be found.

However, others call for changes on a community level, by first educating the public about financial budgeting and home ownership in areas with the highest rates of foreclosures.

The study's author, Spencer Cowan, said if the trend of unresolved foreclosures continues, there will be over 7,200 additional zombie properties in Cook County, including nearly 3,200 additional zombie properties in the city by the end of 2015.