City Council hearings to provide progress report on Chicago Neighborhood Stabilization Program

The City of Chicago Department of Community Development will provide an overview and progress report on the work underway through the Neighborhood Stabilization Program (NSP) at a hearing to be held by the City Council Committee on Housing and Real Estate.

The hearing is set for 10 a.m. Thursday March 11, in the City Council Chambers located on the second floor of City Hall, 121 N. LaSalle Street.

At the hearing, city officials will share the latest information about the program and how the work of rebuilding neighborhoods hardest-hit by foreclosures is already having a positive impact on our communities.

“We have made much progress since we announced this effort and already we are seeing some results,” said Ellen Sahli, First Deputy Commissioner of the Department of Community Development. “Chicago has been fortunate to receive two rounds of funding under the Neighborhood Stabilization Program and we are making the most of those resources.”

Chicago was awarded $55 million in February 2009 and another $98 million in late January under the federally-funded program that will allow the City to purchase, rehabilitate and demolish, when needed, vacant and foreclosed lender-owned properties.

“Foreclosures are threatening other federal, state, and local investments in our communities that have been made over the past decade,” Sahli said. “The NSP resources are critical to stabilizing neighborhoods. We have been very strategic in how we have targeted areas so we can make a measurable impact on a community.”

Through NSP the City intends help stabilize the community and protect investments by:

• Building upon recent public and private investments, such as schools, police stations, retail development.

• Building upon other community anchors and job centers, such as proximity to universities, hospitals, and commercial corridors.

• Strategically acquiring a majority of the vacant foreclosed properties on a block to make an impact.

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• Working with community partners to engage them in stabilization activities.

Figures from HUD indicate that Chicago is well ahead of other cities that have received NSP funding – Chicago has committed 48 percent of its funding compared to a national average of 35 percent.

To date the Department of Community Development has:

Acquired 205 units (65 properties)

● Immediately after acquisition, MPS secures all properties and performs any necessary lot maintenance (i.e., trash removal, grass cutting)

●   Average acquisition price per unit is $19,799

Acquisition of approximately 98 additional units is pending; closings anticipated within the next 30-60 days

Nearly $27 million committed for the purchase of properties

● This represents 48% of the total grant

● As of this month, HUD indicated that the national average for funds committed was 35%, showing that Chicago is farther ahead than other cities.

    Identified 1,522 vacant units for potential acquisition

Assessed 1,087 vacant REO (bank-owned) units

● Assessment includes an appraisal, scope of work, and financial analysis

Made offers on 653 units

 The City has until September 2010 to commit the first $55 million – identify and purchase properties -- and has until March 2013 to finish the work and disburse the funds to developers.

In all, the City expects to target about 2,500 properties in the following community areas:

Albany Park, Auburn Gresham, Austin, Burnside, Chatham, Chicago Lawn, East Garfield Park, Englewood, Fuller Park, Grand Boulevard, Greater Grand Crossing, Hermosa, Humboldt Park, Logan Square, New City, North Lawndale, Oakland, Pullman, Riverdale, Roseland, South Chicago, South Deering, South Lawndale, South Shore, Washington Park, West Englewood, West Garfield Park West Pullman and Woodlawn.

A not-for-profit organization, Mercy Portfolio Services, is working at the direction of the City to acquire, redevelop and reposition the properties.