By John A. Ostenburg
The Outpost Observer
One major aftermath of the economic downturn that began in 2007 has been a devastating number of housing foreclosures. Ironically, many times foreclosures seem to hit those who reside in "affordable housing" even more greatly than they do persons who live in more expensive homes. Nowhere is that more obvious than in the south suburbs of Chicago, where numerous moderately priced homes have been sitting vacant for prolonged periods of time and subsequently have fallen into disrepair.
Admittedly, a large number of foreclosures among purchasers of affordable housing have been the result of unwise lending practices by many financial institutions in how they provided mortgages to first-time homebuyers and to persons with questionable credit background. However, a number of other factors also are at play.
For example, Chicago’s south side and southern suburbs also have experienced a high amount of commercial and industrial property that has been abandoned, much even before the current financial crisis. Once the manufacturing Mecca of the greater Chicago region – with lots of jobs in steel mills, automobile and rail car assembly plants, and various other industries – the area was one of the first to be hit in the early 1980s by the decision of business magnates to take their plants off-shore in order to avoid paying workers good wages and benefits and to dodge property taxes.
So, while housing in the region is "affordable," the opportunity for employment in the region is limited, which means the residents must travel elsewhere in Chicagoland in order to find good-paying jobs. In fact, a study by The Fantus Company for Governors State University in 1986, long before the crisis of 2007, showed that the south suburbs exported a highly-trained workforce to other regions of Chicagoland, primarily because sufficient work opportunities did not exist on the south side or in the south suburbs.
Consequently – and again such was the trend even before the current fiscal crisis – many of the residents of the moderately priced homes available in the south suburbs barely have been able to make ends meet because of high costs relating to their work situation. Transportation costs eat deeply into the earnings of these workers because they need to travel great distances to their workplaces. Likewise, because of the distance that must be traveled, south suburban residents are required to leave for work very early, and then return from work very late. That means a need to pay extra day-care costs, which is especially problematic for single-head-of-household families, in addition to other challenges to family life.
Finally, the greatest negative impact on the ability of south suburban residents to keep their heads above water as regards housing costs is the property tax structure in Cook County. Under that structure, commercial and industrial property-taxpayers are assessed roughly one-third more than are residential property-taxpayers; given that many of the employees of Cook County businesses reside in the collar counties and thus do not pay property taxes in Cook, it makes sense that the businesses themselves should pay more to cover the extra impact on infrastructure and other costs that they generate. But while that structure may be beneficial to the county as a whole, it has a devastating impact on areas where commerce and industry are sparse. Unlike more commerce-rich regions where homeowners are bearing 30 percent of the property tax obligation, many residents of the south suburbs are providing 90 percent. In the south suburbs, for example, residents often are paying as much in property taxes as they do in mortgage payments. That has been a major factor in many of the foreclosures that have occurred.
While no one has come up with a fail-safe solution to the housing and economic development problems facing Chicago’s south side and southern suburbs, a couple of recent actions seem to be good steps in the right direction: (1) a coalition of three south suburban communities, with the assistance of the South Suburban Mayors & Managers Association (SSMMA) and the South Suburban Housing & Community Development Collaborative (SSHCDC), has established the South Suburban Land Bank & Development Authority (SSLBDA); and (2) the Cook County Board has created the Cook County Land Bank Authority (CCLBA).
Both bodies have at their mission to foster the return of vacant properties – both residential and commercial/industrial – to the tax rolls and to turn properties that now are blights on their respective neighborhoods into assets instead. A lot of careful study and analysis has gone into the creation of these two entities, with close review of land banks that have been successful – or not – in other areas of the country. What is particularly appealing about the land-bank concept is that it is focused on long-term goals and sustainability rather than on quick-fixes.
But just creating land banks is not the solution to what’s been occurring in Chicago’s southland. In order to accomplish that end, the land banks must formulate careful plans of action. Within specific regions where problems are greatest, the goals must be (1) to turn the vacant commercial/industrial property into job-generators so both current and future local homeowners don’t have to expend so many resources in connection with employment, (2) to assure that those commercial/industrial properties level the playing field as regards the high property taxes now being borne disproportionately by homeowners, and (3) to fill the many residences that currently are empty because of foreclosures. If only the third of these is accomplished, then the homeowners who will be replacing the previous owners face the same consequences as did their predecessors.
No doubt some will raise the point that problems also exist elsewhere in Cook County and not only in the south side of Chicago and the south suburbs, and that other regions also must be addressed. Indeed, they are correct. However, nowhere else in the county does there exist such a large concentration of vacant and abandoned property as exists in the southland. It is naïve for policy-makers to think that the colossal land-use crisis of the southern region will not have dire consequences on all of Chicagoland if something dramatic isn’t done. Left undone, the blight only will spread, only will cost more in county- and state-provided resources to address its natural consequences, and only will further deteriorate the image of the southland and thus make it increasingly less desirable for economic growth.
Over the years, I’ve witnessed lots of bodies be created with good purpose and intent, only subsequently to dance around the problems and not to discover effective solutions. I’m hopeful that won’t be the case with the two recently established land banks. They offer the opportunity for great potential if used properly. Certainly it appears to be the desire of those who created these entities to use them as effective tools for improving the quality of life for many Cook County residents. I’m optimistic they’ll accomplish that end.
John A. Ostenburg is in his fourth four-year term as mayor of Park Forest, Illinois, and formerly served in the Illinois House of Representatives. He retired in July 2010 as the chief of staff for the Chicago Teachers Union after holding various CTU posts over a 15-year period. A former newspaper reporter and editor, he also has been a teacher and/or administrator at elementary, secondary, community college, and university levels. E-mail him at JO[email protected].