The City of Chicago has received strong support of a proposed new ordinance, which would further impact banks losses on foreclosed properties.
Two council members, Deborah Graham of the 29th ward and Robert Fioretti of the 2nd ward are leading the charge. The council believes the vacancies attract criminal activity and put children’s lives in danger.
The new ordinance would require banks and owners of 5 or more properties, to hire guards to watch abandoned properties within 1000 yards of schools in the daytime. It also would mandate all vacant properties have full-time guards at night. If ignored, it could get costly with fines of $1,000 for each violation.
In 2010 over 10,000 foreclosures occurred leaving a high number of abandoned buildings scattered throughout the city. It was recently reported that thousands more foreclosed properties are set to be released within the next 60-days.
While banks continue to lose billions on foreclosed properties, this additional cost could make them rethink short sales. In recent weeks many large banks have tried to put the brakes on short sales, by creating tougher appraisal policies. But in most cases of a short sale, owners still live in the home, so banks may find the cost of adding security is not worth letting them go into foreclosure and hopefully rethink short sales.
If you drive through south and west side neighborhoods, the amount of vacant abandoned buildings is astounding. These properties are magnets for drug dealers, crack houses and assaults, so it definitely needs to be addressed. If not, Chicago could soon look like some areas of Detroit, where nearly every block is saturated with abandoned buildings.
What do you think? Is this a good idea?
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