Category Archives: Goal I: Stabilization

Create alternative to short sales through Land Bank

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Stabilization efforts in the neighborhood, including NSP but also other DHED programs, lack the necessary tools to deal with the market disruptors that depress local property values. The newly established Cook County Land Bank is a promising opportunity to obtain properties through donations, tax delinquency, intergovernmental transfer and purchase. One important step is to actively seek the elimination of short sales that push down appraised values and make renovation harder. The Land Bank can accept these properties through donations or alternative arrangements to the short sale process.

Exchange sale of property to land trust for stable property taxes

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A final approach follows the approach associated with many land trusts. Homeowners could permanently sell the land associated with their property to a county-controlled land trust (perhaps the County Land Bank) in exchange for a long-term land lease and deed restrictions on the sale of their house. No longer owners of the land, they could continue to pay their property tax with a nominal annual increase. Their house would be subjected to permanent affordability even under resale.

Encourage de-conversion of 2-4 units back to more spacious single-family homes and two-flats

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By encouraging the conversion of two- to four-unit buildings back into fewer units, the neighborhoodÕs housing stock would be Òright-sizedÓ (without demolition) to reflect the significant reduction in density that has resulted from population loss. This action reduces the total stock of housing units, reduces vacancy, all the while providing more spacious homes that are rare commodities in a dense city. As a result, this stabilizes the market through reduction of housing unit supply, but also creates a market-oriented commodity along with the potential of obtaining a next-door lot for long-term management. This action helps restore a sense of flexibility in the housing stock. If the neighborhood experiences significant growth in the future, not unlike it did post-WWII, and vacant land proves insufficient to meet the demand for housing, these homes may be converted back to two- to four-unit buildings.

Enhance outreach for property tax increases

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Because of past speculative increases in property values that led to additional vacancies and tax delinquencies, anticipating the effects of a stronger market and create mechanisms that will work against its harmful consequences is a priority. This transl

One approach would build on existing Homeowner Association efforts to inform seniors of their ability to request both an exemption from increased valuation and a freeze on previous assessed values (Cook County Assessor, 2013). This effort requires more ex

Freeze incremental property taxes for residents who don’t move

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A second more creative approach would convert the incremental property taxes into a lien on the property that would be deferred each year the homeowner continues to occupy the residence, but paid in full upon the sale of the home or discontinued use as a primary residence. The lien would be assessed by Cook County and found in a basic title search. This would enable occupancy of an owner-occupied two- to four-unit home by the same owner-occupants and tenants despite increases in neighborhoodÕs property values. The deferred lien, by design, also serves as a hedge against purely speculative rises in property values. If a household benefits from the inflated prices in selling their home, they pay the associated property taxes. If the values are not sustainable, as they were prior to the housing bubble, a household that does not move will face a predictable amount of property taxes that will prevent speculation from fueling vacancy.

Develop "lot next door" program

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Because the presence of vacant land has harmful effects, the Land Bank should develop a next-door lot program that builds on the existing efforts of Block Clubs and the Homeowner Association. Building owners would be given long-term leases for property if they maintain them as yards or develop them into parking lots. This might even include an option to buy the lot at an agreed upon price after market conditions have improved significantly.

Perform traditional long-term land banking

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Another step, which is an explicit goal of the Land Bank, is to procure and hold land in Woodlawn and set clear signals to the market that the land will not be developed anytime soon. This prevents the threat of new construction from intimidating housing renovators. The Land Bank would serve as a much better manager of the land and buildings for the Building Department than when it undergoes demolition and city ownership, given that the Land Bank actively plans for how each vacant building or newly leveled lot will be used.