Cook County Land Bank To Sell Homes Directly To Homebuyers
By Corilyn Shropshire, Chicago Tribune | September 29th, 2017
A vacant brick bungalow on South Luella Avenue in Chicago’s South Shore neighborhood requires some work — in fact, quite a bit of work.
The orange kitchen, despite having a coveted island, needs updated appliances, new cabinetry and flooring. The toilet in the main floor bathroom is broken and the peach carpet smells of cats.
But for a prospective homebuyer looking for a house with good bones, the home has potential.
It’s just one of the 30 to 40 homes the Cook County Land Bank Authority is putting up for sale as part of a new program designed to promote homeownership by selling vacant, dilapidated, tax-delinquent homes directly to homeowners.
Until August, the land bank sold the properties it acquired only to developers that would rehab them and sell them at market rates.
But several of the land bank’s properties were more in need of cosmetic changes than complete rehabs. Rehabbers weren’t as interested in less-blighted properties because the projects would not produce the desired returns.
Enter the land bank’s new program designed to attract prospective owner-occupants with fixer-upper dreams.
“Most of the properties (offered to homebuyers) need cosmetic work, not a full gutting,” said Rob Rose, the land bank’s executive director. “These houses are great for a homeowner to come in, make that investment and build equity … because we’re selling to you below market.”
The homes range from $50,000 to $170,000. The South Luella Avenue bungalow is listed for $103,000. Six of the homes have sold since late September.
“What we love is getting the folks in the community to be the homeowners in those neighborhoods,” said Courtney Jones, president of the Dearborn Realtist Board, a trade association for black real estate professionals that supports the initiative to bring people back in to the neighborhood. “That allows the equity to stay with these people of color who’ve grown up in those areas.”
The land bank aims to make a long-term impact on neighborhoods hit hard by the housing crisis by filling abandoned homes with homeowners, not just renters, said Cook County Commissioner Bridget Gainer, D-Chicago, chairwoman of the land bank.
The initiative is also meant to boost homeownership among African-Americans, who are lagging behind whites in owning homes.
Only 38.9 percent of African-Americans owned home in the Chicago area in 2015, compared with 74 percent of whites, according to a report from Harvard University’s Joint Center for Housing Studies. Before the housing crash, almost half of African-Americans in the Chicago area owned homes.
Most of the homes in the land bank’s program are in Avalon Park, Roseland and South Shore. Some suburban properties are also available.
The land bank brought in corporate lenders offering purchase rehabilitation loans and is building a list of contractors to share with homebuyers.
“The main problem with these (vacant) buildings was man-made,” Gainer said. “Either it’s stuck in court, or the buyer couldn’t get credit. The houses are still desirable, people wanted to live there … so there needed to be a solution to unstick it.”
Since its founding in 2013, the land bank has identified 13 city neighborhoods and 13 west and south suburbs where it sees potential, and has been acquiring vacant homes to sell. The Chicago neighborhoods are Auburn Gresham, Austin, Chatham, Chicago Lawn, East Garfield Park, Gage Park, Grand Boulevard, Great Grand Crossing, Humboldt Park, South Shore, Washington Heights, Washington Park and Woodlawn. It is working to expand to more neighborhoods.
As of the end of August, the land bank had acquired 538 properties. Of those, 346 homes have been sold to developers and 167 have been rehabbed.