Erasing the Legacy of Redlining Will Take Action by Congress, State Legislature

The long-abandoned vacant lots and closed businesses in Chicago are an unwelcome gift from the federal government, which has a duty to help restore them.

A new analysis The lingering and appalling effects of redlining decades ago in Chicago should spur Congress and the Illinois Legislature to find ways to help restore these properties as assets to their neighborhoods.

Analysis by a team from the office of Cook County Treasurer Maria Pappas found that properties federally delineated in the 1940s are more likely to be vacant and derelict today. The study, “Maps of Inequality: From Redlining to Urban Decay and the Black Exodus,” found a similar pattern in Philadelphia and Detroit.

Redlining was a discriminatory system of denying or limiting home loans and other financial services to particular neighborhoods, usually African American communities. Without access to these home loans and other services, homeowners have seen properties in these neighborhoods decline in value.

In Chicago, neighborhoods that had many well-maintained homes and vibrant commercial areas crumbled after the imposition of redlining in the 1940s, and many never recovered. Redlining also forced many African Americans to purchase homes on contract, a system plagued with abuse, including losing their homes and all of their principal if they missed a single payment.

Pappas’ analysis found that just over half of the 27,000 properties now at risk of being sold for back taxes are in areas the federal government had demarcated.

When owners are sufficiently behind on property taxes, properties can be sold in a tax sale to bidders who pay the taxes and obtain title. But many properties are not bought at the tax sale and end up being sold at the so-called treasure sale.

A study last year by the University of Chicago’s Harris School of Public Policy found that since 2007, only 7% of all properties involved in the county treasure sale have successfully returned to the private market. .

It’s bad for the city and certainly for the struggling neighborhoods dotted with abandoned properties.

Ripple effect of divestment

For years, officials, community groups and others have worked to find new owners for properties languishing in the treasure sale. If they could be found, the new owners would put the properties back on the tax rolls, generating revenue for local government units and presumably leading to investments by the new owners, revitalizing neighborhoods.

In 2013, Cook County established the Cook County Land Bank Authority to buy up vacant residential, commercial, and industrial properties, eliminate back taxes, eventually demolish decaying buildings, and put properties back on tax rolls.

In addition, as early as 1977, Congress enacted the Community Reinvestment Act, which required banks to lend to homeowners in areas from which they accepted deposits. But it took effort on the part of Chicago reformers to get the banks to do it.

Still, it’s clear that Congress and the Illinois General Assembly must do more if neighborhoods suffering from a legacy of redlining are to recover. In some areas, streets are lined with one vacant property after another. Some parts of the electricity, water and gas networks may have fallen into disrepair without anyone noticing because no building uses them. The frequent violence in these areas also discourages investment.

In 2020, analysis by WBEZ and the nonprofit City Bureau newsroom found that majority-white neighborhoods got 68.1% of the money loaned for home purchases, while neighborhoods with majority Latinos got 8.7% and majority black neighborhoods 8.1%.

Pappas calls for 13 reforms that could help put some properties back on the tax rolls. For example, she would like to make the treasure sale, which has been around since 1943, optional. But that would have to be approved by the Illinois legislature.

His proposal to cut the time it takes for properties to go to treasure sale from 2½ years to one year would require changing the state constitution.

But because the federal government created redlining, Congress, in particular, has an obligation to find a way to bring substantial investment to communities suffering the long-lasting harmful effects of redlining.

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