A Roundtable on the State of Housing in Chicago and Cook County

by Jason Keller

The term “community development” is narrowly defined in the Community Reinvestment Act (CRA). However, one of the more prominent components is lending and investment in affordable housing (including multi-family and rental units) for low- and moderate-income residents.[i] The Fed’s Community Development and Policy Studies (CDPS) division works to foster the active engagement of depository institutions in providing financing for affordable housing (as well other banking activities) to communities, particularly underserved and economically struggling ones. CDPS partnered with HOPE NOW and Neighborhood Housing Services of Chicago (NHS) to host a roundtable at the Federal Reserve Bank of Chicago on May 11, 2015, to discuss the current landscape of affordable housing in the greater Chicagoland area. Approximately 65 bankers, practitioners, researchers, and housing advocates attended the event.  

HOPE NOW is a Washington, DC, based national alliance between counselors, mortgage companies, investors, and other mortgage market participants. The organization works to bring together homeowners, communities, and government partners to address challenges in the mortgage market. HOPE NOW servicers reported almost two million “solutions” for homeowner in default or facing foreclosure (modification, deed-in-lieu of foreclosure, short sale, or other means) in 2014.[ii] NHS is Chicago’s largest nonprofit neighborhood revitalization organization and works in partnership with businesses, government, and neighborhood residents to revitalize low- and moderate-income neighborhoods throughout northeastern Illinois, specifically Chicago, south suburban Cook County, Elgin, and the Fox Valley.[iii]

The roundtable opened with a state of the housing market report by Geoff Smith, the executive director from the DePaul University Institute for Housing Studies (IHS). IHS’s mission is to provide reliable, impartial, and timely data and research to inform housing policy decisions and discussions in the Chicago region, as well as nationally.[iv] Using data from IHS’s housing data clearinghouse, Smith noted that Cook County’s housing prices continue to rebound after the recession, but market conditions overall remain varied across neighborhoods. Prices in the county’s strongest real estate markets are nearing previous peak levels, while prices in more distressed areas are below 2000 levels. Smith described how vacancies and foreclosures continue to be concentrated in the south and western parts of the city of Chicago and suburban Cook County, although foreclosure filing activity had continued to decline countywide. Smith explained that the foreclosure filings in the most distressed neighborhoods of Cook County had returned to pre-2005 levels. The number of properties completing the foreclosure process and becoming bank owned real estate is also decreasing across all communities. Generally speaking, the flow of mortgage credit into Cook County neighborhoods slowed in 2014 due to declining levels of refinancing, but Smith contended that access to mainstream financial markets and mortgage loans is lacking in moderate- and highly-distressed neighborhoods. In these areas, cash buyers continue to make up a substantial portion of sales activity. In sum, while Cook County’s housing market is recovering, home values in many of the areas that were most heavily impacted by the foreclosure crisis have yet to return to pre-recessionary levels. 

The roundtable then focused on three panel discussions: one on Local Outreach Partnerships; one on Real Estate Owned (REO) Strategies; and one on The New Buyer Pipeline. These sessions highlighted progressive strategies to address blight, urban decay, and improved access to quality affordable housing throughout Chicagoland. Attendees learned more about the Chicago Micro Market Recovery Program (MMRP).[v] The Program’s goal is to improve conditions, strengthen property values, and create environments supportive of private investment in targeted markets throughout the city by strategically deploying public and private capital and other tools and resources in well-defined markets. There are currently 13 targeted communities in the Program, including (but not limited to) Austin, Chicago Lawn, Englewood, North Pullman, and Woodlawn. Qualified homeowners can benefit from counseling from an accredited agency, receiving repair grants or other credits designed to stabilize communities. Individuals interested in purchasing or rehabilitating a home in an MMRP area may also be eligible to receive subsidies through the Neighborhood Stabilization Program (NSP) or the City of Chicago’s Tax Increment Finance – Purchase Rehab initiative.     

The roundtable closed with a description and a call to action to promote a homeowner outreach event at Olive Harvey College – one of the City Colleges of Chicago, on May 27, 2015. At this event, over 300 at-risk homeowners got the opportunity to meet with mortgage servicers, lenders, housing counselors, and investors in a safe and secure environment to discuss their particular situations. Events like these are often held across the United States to help struggling homeowners learn more about loan modifications, short sales, forbearance, and other non-foreclosure options.

To learn more about specific services offered by HOPE NOW, visit www.hopenow.com. For more information on what the Federal Reserve System is working on to support affordable housing initiatives across the country, visit Fed Communities.



[i] See A Bankers’ Quick Reference Guide to CRA, available at https://www.dallasfed.org/assets/documents/cd/pubs/quickref.pdf.

[ii] See HOPE NOW, available at http://www.hopenow.com/about-us.php.

[iii] See Neighborhood Housing Services of Chicago, available at http://www.nhschicago.org.

[iv] See Institute for Housing Studies at DePaul University, available at http://www.housingstudies.org.

[v] See City of Chicago Micro Market Recovery Program, available at http://www.cityofchicago.org/city/en/depts/dcd/supp_info/micro_market_recoveryprogram.html.

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