Like many communities, Chicago came out of the 2008 financial crisis with a zombie problem. So-called “zombie homes”—abandoned properties caught in the midst of the foreclosure process, but which are not yet under the control of the servicer or noteholder—lingered in many neighborhoods, driving down property values and attracting crime and urban blight. Now a new story by U.S. News & World Report has examined how the Windy City has been combating its zombie infestation in recent years.
When it comes to fighting zombies, the best approach is to take things block-by-block—at least, that’s the Chicago way. As reported by U.S. News, Chicago spent nearly $170 million fighting the problem in the aftermath of the financial crisis, courtesy of HUD’s Neighborhood Stabilization Program. In 2011, Chicago city government launched an initiative called the Micro Market Recovery Program (MMRP). The MMRP narrowed its focus to specific blocks that had high concentrations of these abandoned foreclosure properties, then set out trying to figure out ways to rehab them into affordable homes for rental or purchase.
David Reifman, Commissioner of the Chicago Department of Planning and Development, told U.S. News, "We wanted to focus our limited resources on key areas to bring back whole blocks at a time."
The MMRP united the efforts of the Chicago Department of Planning and Development with local community groups such as Local Initiatives Support Corporation Chicago, working together to try and attract the interest of investors and families who could help bring Chicago’s zombie homes back to life.
Between 2011 and December 2018, a combination of city budget, grants from nonprofits, and other sources will have invested nearly $13 million in MMRP. The Illinois Attorney General’s office also chipped in approximately $3 million, courtesy of a settlement with banks accused of unscrupulous lending practices leading up to the financial crisis.
Nor are the results obvious purely from a financial standpoint. U.S. News reports that foreclosure filings in the targeted areas decreased by “double digits” between 2011 and 2016. The northern targeted region saw the strongest results with a 67.6 percent decrease, followed closely by the middle region of the city with a 66.1 percent decrease. Foreclosure filings decreased by 69.4 percent citywide during that same time period, according to U.S. News.
"As long as the demand and the need are there, we will continue," said Reifman. "Right now, our recovery is steady but not complete."