Jul
25

Another Casualty to Foreclosures: Chicago Renters

July 25, 2012

The foreclosure crisis has hit the Chicago real estate market hard, and it’s not just property owners that have been affected.

A new report released this week by the Lawyers’ Committee for Better Housing (LCBH) focuses on how Chicago renters have been impacted by foreclosures and how to better protect them.

When an apartment building goes into foreclosure, those living in the rental units face uncertainty over how long they will be able to stay in their homes. They’re sometimes forced to double-up or lease unsuitable units.

The loss of housing units also puts a strain on an already struggling housing market, decreases the rental market’s affordability, increases the rate of homelessness, lowers property values and depresses the tax base in surrounding areas, which leads to more foreclosures, and costs Chicago catastrophic expenditures dealing with vacant buildings.

Here are some stats from the LCBH report:

  • From 2009 to 2011, 16,941 apartment building foreclosures were filed in Chicago. In those, 51,972 rental units were affected. That accounts for 9 percent of Chicago’s entire rental housing stock.
  • Nearly one out of every 10 rental units in Chicago has been impacted by foreclosure over the last three years.
  • On average, more than 100 apartment buildings in Chicago went into foreclosure each week from 2009-2011.
  • Over the last three years in Chicago, more rental units in apartment buildings were impacted by foreclosure filings than single-family and condo units, which means that more renter households were affected by foreclosures than owner households.
  • Of the completed sales in 2011 that matched with newly filed apartment building foreclosures in LCBH’s database, 84 percent resulted in bank ownership.

Despite the trouble property owners are facing in this economy, renters have rights. Tenants are protected until a lease ends or a 90-day notice has been served, but LCBH, in conjunction with many other policy, advocacy and community groups, has drafted a proposed ordinance called the Keep Chicago Renting Ordinance (KCRO), which would further protect tenant’s rights under foreclosure situations.

Under the KCRO:

  • Rent-paying tenants in a foreclosed building, even those without a written lease, would get to stay in their units until the building is sold to a third party.
  • Rents will not be able to be raised unless the matter is taken to court.
  • Renters will receive more notices alerting them to their rights under the law.
  • Penalties would be designed to deter tenants’ rights violations.

If successful, the ordinance would keep Chicago buildings occupied and cut down on the number of vacant properties around the city. The ordinance is set to be introduced this week. Stay tuned.

About The Author

Tracey

Read All Stories By Tracey

Leave a Comment

Copyright © 2008-2017 mRELEVANCE, LLC | Chicago Real Estate News | Chicagoland Real Estate Forum. All rights reserved. Thank you for visiting Chicago Real Estate News Chicagoland Real Estate Forum, Real Estate Listings and Information Provided by MLC Realty, Inc.
Internet Marketing by Marketing RELEVANCE

Equal Housing Opportunity

1819 W Grand Ave | Chicago, IL 60622