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The city took another small step in its attempt to tackle the ongoing foreclosure crisis today.
The City Council's housing committee signed off on the latest city plan to implement the federal Neighborhood Stabilization Program, but not before aldermen voiced a few frustrations about the dwindling amount of federal funds coming the city's way—less than $16 million this year to deal with thousands of foreclosed properties.
Under NSP, the city receives federal funds to team with local developers to restore and re-sell foreclosed homes. But the program has never had enough money to deal with the volume of foreclosures, locally or nationally.
In 2009 the U.S. Department of Housing and Urban Development sent $55 million to Chicago. The following year, the city received an additional $98 million. Yet this year's allocation, authorized by the Dodd-Frank Act, comes in just shy of $16 million. It's a heftier amount than those going to other major cities, but it's not one that can cope with all of Chicago's growing inventory of foreclosed homes.
Alderman Ray Suarez, the housing committee chair, bemoaned the shrinking program grants. Sixteen million is "still a lot of money," he said, "but it's not enough when it comes to stabilizing neighborhoods."
Katie Ludwig, who runs the city’s program, told the committee that the city has worked with 80 developers to acquire around 650 units thus far. She assured the committee that the city was still on track to hit its goal of rehabbing 2,000 to 2,500 units.
The program has faced criticism for its lack of transparency, an issue that didn't come up in this morning's meeting. And the NSP dollars are focused on a few targeted neighborhoods in the city.
When Mayor Rahm Emanuel unveiled the city's latest NSP initiative two weeks ago, he admitted that it couldn’t span the entire city. According to the Woodstock Institute, there were 23,364 foreclosure filings across Chicago in 2010 alone.
Two years ago, Ellen Sahli, Chicago's housing commissioner at the time, told aldermen a similar story:
But Sahli warned that the money won’t go as far as it might sound—the value of the property foreclosed in Chicago in 2007 alone was $1.2 billion; the entire stabilization program has
just $4 billion to allocate nationwide. “We have to be strategic about how we use our resources," she said, "and magically turn $55 million into a whole lot more.”