In early July, Chicago police officers arrested four men for taking over 14 vacant foreclosed homes — living in some and renting out the rest — mostly in prosperous neighborhoods. Seven years after the housing market crashed, there are still enough vacant homes to provide opportunities for this kind of creativity.
Eight of the houses were in Beverly Hills and Morgan Park— South Side Chicago neighborhoods that look like suburbs, complete with big brick houses, winding streets and a vigilant neighborhood group, the Beverly Area Planning Association.
One of the homes sits a block and a half from the group’s office, on a street the association’s executive director, Margot Holland, describes as “beautiful,” lined with trees and spacious houses.
The taken-over house fits right in. The white-brick split-level is obviously well cared for, with tidy landscaping and a sign in front indicating that a security system is in place. “Yeah, it definitely doesn’t look suspicious,” Holland says.
So, how does a tidy home on a beautiful block end up ripe for the picking?
For help in understanding the context and in sorting through the public records, I turned to Rob Rose, director of the Cook County Land Bank Authority. Created in 2013 to help clear a backlog of vacant foreclosed properties, the land bank focuses on a collection of 23,000 tax-delinquent parcels.
Asked how long it might take him to dispose of all 23,000, Rose has a ready answer: “The rest of my life.”
His answer is based on a simple calculation. Rose thinks that clearing 500 properties a year — by finding new buyers or recommending targeted demolition — would be a pretty good pace for his small office. At age 44, that would keep him in the job until he’s 90.
However, as a public records search on the taken-over homes shows, there are far more than 23,000 vacant properties.
None of the eight properties in Beverly and Morgan Park are on Rose’s lists, because the property taxes are still being paid, presumably by the lender, as a hedge against forfeiting the parcel in a tax auction.
“This is the most difficult type of property to get to, because there’s no immediate red flags,” Rose says.
For the split-level, records show foreclosure started three years ago, but the lender hasn’t taken title. That’s about average in Illinois, which has more protections for homeowners than many states.
According to Daren Blomquist, vice president of the real-estate analytics company RealtyTrac, that delay means a foreclosed home in Illinois is more likely to be abandoned. “The longer it’s in that process, the better the chance that the homeowner is just leaving the property.”
Nationally, RealtyTrac counts about 127 thousand of these “zombie properties” stuck in foreclosure indefinitely. “When you consider that at any given time, there’s probably a couple million homes for sale, this isn’t an overwhelming number of properties,” Blomquist says. “Compared to overall inventory nationally, it really is a drop in the bucket. I think this really is a neighborhood issue.”
But even in a nice neighborhood, a few zombies here and there can provide an opening for creative operators.