A Galewood alderman recently critiqued members of the Northwest Side Home Equity Assurance Program's governing commission after they rejected two attempts by homeowners to get money for homes that decreased in value.
The Northwest Home Equity Assurance Program is one of the three programs that were implemented in the late 1980s throughout then-majority-white Chicago neighborhoods, including Galewood. The idea was to stop white flight by addressing one of its root causes — the fear that increased minority population would bring down property values.
The program uses a special tax levy to create a fund so that homeowners can cover their losses if they want to sell their homes and the property values have dropped. But anyone who wants to file the claim has to follow state law and commission rules, and the commission has the ultimate say over whether the home owners get the money.
During their Aug. 30 meeting, commission members rejected one claim outright and tabled the other. In the former case, the commission determined that the homeowners didn't follow the law, while in the latter case, they wanted more time to figure out whether the proper steps were followed. The commissioners agreed that, while they would have liked to help the claimants, they were going to take the laws and regulations as they're written seriously.
Like other home equity assurance programs, Northwest adds an extra charge to the property tax bills of all property owners within its home equity district, which spans much of the Northwest Side and the Galewood portion of the bungalow belt. Those funds are then used to pay the property owners the difference between how much the property was initially appraised for and how much it was sold for.
The program, however, doesn't apply to every property owner. To qualify, a property owner must live on the home for at least five years and they must pay a $150 fee to cover the appraisal.
Prior to its July 16 meeting, the Northwest's governing commission was in limbo as commissioners resigned last year and it took months to appoint replacements. In the meantime, two claims came before the board. During the July 16 meeting, the commission decided to table both until the Aug. 30 meeting.
As part of the claims approval process, the homeowners need to first try to sell their homes for the value approved by an appraiser contracted by program. They can't reduce the price for 90 days, and the reduction must be cleared by the commission. The idea was to ensure that the homeowners don't abuse the process by deliberately selling at the lowest price possible.
With the first claim, the commission didn't have any paperwork on file to show that the claimant followed all of the steps. Bruce Washington, the program's acting director, blamed it on the chaos of the recent months. Considering the circumstances, he urged the board to approve the claim in this particular case, since he felt that it was only fair.
"I would recommend that we waive whatever requirement you're speaking to, so these people not be punished and lose money," Washington said.
After a prolonged discussion, the commissioners decided to ask the claimant if they had any e-mails or any other paperwork on file that might help clear up the issue.
Commissioner Michael Saladino, who noted during the meeting that he himself once tried to file the claims and was told in no uncertain terms that he had to follow the steps, argued that if the claimant didn't have any paperwork, the commission would have no choice but to reject it. Otherwise, it would open the door for other people to try to game the system.
"If it's something that [the commission] screwed up before, I'm just following letter of law," Saladino said.
The second case was less ambiguous. Evidence showed that the claimant reduced the price from the appraised value of $357,000 to $299,000 within a few days without bothering to check with the commission. The commissioners voted unanimously to reject the claim.
The commissioners readily agreed that, while every claimant was given a copy of the relevant state law and board policies, the legal language it was written in wasn't exactly clear-cut. Having something explaining the requirements in layman's terms would be fairer, commissioner members said, and they agreed to put something together for any homeowners who may want to file claims in the future.
Ald. Nicholas Sposato (38th) told the commissioners that while he supported their push to follow the rules and bring order to the process, he was also concerned that they were trying to change too much at once.
"I've been in the program from the beginning," Sposato said. "I was one of guys going out and getting the signatures [to establish the program]. I appreciate you guys' energy, but you want to reinvent the wheel, you want to change the whole program. Maybe you guys should cool down a bit, get to know each other."
Pat Vader, of Montclare, urged the commission to consider everything carefully, and said that she appreciates what they've been doing.
"I'm proud of everything that's been said here," she said. "It's obvious that you guys are reading statute and it's great."
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