Banking on the Future: Restoring Abandoned and Blighted Properties

Hildy Kingma
Park Forest’s Director of Economic Development Hildy Kingma. (Photo: VOPF)

Park Forest, IL-(ENEWSPF)- When a property is abandoned and needs serious repair, the South Suburban Land Bank and Development Authority is a resource used by about thirty local communities to restore the property and provide affordable housing to a resident. 

Founded in 2012 by an intergovernmental agreement among Park Forest, Oak Forest and Blue Island, the Land Bank has become a key redevelopment tool for both commercial and residential properties throughout the south suburbs.  Hildy Kingma, Park Forest Director of Economic Development, is the village’s representative on the board of the Land Bank.  The village has successfully sold 24 houses through the Land Bank since 2013.  And while the village’s focus is primarily on residential properties, one commercial success story is the former oil change business at 381 Blackhawk, which is now open and operating as Abuzir Auto Sales & Repair.

When a property is in significant arrears (over two years) on either property taxes or water bills, and is vacant and blighted, the village will petition the courts to have the property declared legally abandoned.  The process typically takes about six months to ensure all parties receive proper notification of the property seizure. At that point, ownership is transferred to the village, which then transfers the deed to the Land Bank. 

Currently, there are 21 Park Forest properties before the court seeking abandonment status, with another 20-25 in the pipeline.

South Suburban Land Bank

Upon receiving a property from the village, the Land Bank hires a contractor who conducts a thorough inspection of the property, cleans out any trash, and cares for such items as broken windows.  They then work with a local real estate agency to market the home.  A “scope of work” is developed which outlines what additional repairs or modifications will be made by the purchaser to bring the property up to all village code requirements.  The final scope of work, as well as the purchase price, is subject to the approval of the Land Bank, the village representative (Kingma), and the purchaser. 

The Land Bank has the legal authority to forgive all past due taxes associated with the property regardless of whether the taxing body was the village, county, local school districts, or others.  Without this forgiveness, past due taxes could run into the tens of thousands of dollars (or more for commercial properties), making the price unaffordable for many.

The purchaser of the property must provide proof that they have the funds (or approved loans) to pay the purchase price as well as the estimated cost to complete the repairs listed on the scope of work. 

Once agreed to, the property is sold, and the proceeds are shared among the realtor, the village, and the Land Bank.  Per Kingma, the average selling price in Park Forest for Land Bank residential sales has been $28,800, ranging from $14,600 to $57,000.  On average, the Land Bank has received $15,865 per sale with the difference going to property maintenance costs, acquisition fees, realtor fees, and the outstanding water fees which are paid to the village.

The benefits of the program are obvious: the village addresses a vacant property which in many cases is a neighborhood eyesore, the property is returned to the tax rolls to benefit the community, and the new property owner has a home at a price much lower than they could otherwise afford.  The alternative to rehabbing is that many of these properties would ultimately be demolished rather than restored with new owners.  There have been 93 vacant house demolitions since 2011.

Currently, there are two residential properties in the Park Forest listed with the Land Bank: 147 Nashua Street with a listed sales price of $25,000 and 305 Sioux Street for $30,000.  These prices do not include the cost of the repairs which will be identified in the scope of work.

In most cases, the properties are sold directly to the ultimate occupant of the home, while in other cases the purchaser may use the property as an investment vehicle and restore the property to rent it, or to resell it at a higher price.  While the village prefers an owner/occupant scenario, any arrangement in which the property is restored and returned to the tax rolls is a plus for the village and the local neighborhood.

In addition to working with the South Suburban Land Bank, the village also partners with organizations such as Habitat for Humanity which has rehabbed 18 houses with assistance of Cook County Neighborhood Stabilization Program (NSP) grants.  Another 14 homes were redeveloped through the Illinois Building Blocks Program.

For more information on Park Forest homes currently available through the Land Bank, or for more information about the program in general, contact Hildy Kingma via her email address, [email protected], or by phone, 708-283-5622.