During a town called the “State of Housing in Black America,” held last month at Malcolm X College and hosted by state Rep. La Shawn K. Ford (8th), real estate professionals proposed solutions to the many woes facing African American homeowners and community members — from foreclosed homes to unpaid property taxes.
“Homeownership is one of our main ways to build wealth and create stability in our community,” said Sanina Ellison, a co-owner of Chicago Homes Realty Group. “It goes beyond financial value. Being able to go home to mama’s house keeps families together.”
Ellison addressed the issue of neighborhood gentrification, particularly in parts of the South Side, where home prices are rising even as incomes among blacks remain stuck at poverty level. She offered one solution for individual homebuyers.
“Buy the worst house on the best block,” she said. “I’m in Bronzeville, where our median income is $32,000 but the best houses are selling for $600,000. You can buy for about $150,000 and spend another $100,000 fixing it up. We need to reinvest back in our own community.”
Ellison added that real estate agents can help buyers decide which lender and program best fit their finances and plans.
Judge Leonard Murray, who supervises the Housing Court, said owners who get behind on mortgages, taxes or condo association payments can lose their buildings to either foreclosure or forfeiture.
Leaky roofs quickly lead to a deteriorating building that becomes a target for demolition, but citizens can get access to the demolition list through the Cook County Land Bank and go to court to get a stay on the demolition, allowing them to obtain financing and buy the property.
Rob Rose, the Cook County Land Bank Authority’s executive director, invited prospective buyers to check the Authority’s website for available properties.
“People from all over the country and the world are trying to buy property in Black communities in Chicago,” said Rose. “Why would they, if our neighborhoods have no value? But these outsiders don’t care about the community. They’re likely to put a minimum of work into their rehab and charge a lot of rent.”
Rose added that rehabbers should have a plan ready for the Land Bank to vet in order to make sure that rehabbers have the resources to carry out the rehabilitation work.
Rose said that the Land Bank looks at the salvage value of the building’s “bricks and sticks” — the cost of renovation and how much of the back taxes are being wiped out in the transaction.
“We’re not trying to maximize sale values here, but we warn that you can possibly be outbid by other prospective owners,” he said.
The experts said that if anyone planning on purchasing a fixer-upper or looking to make improvements to an existing home might benefit from an FHA 203(K) loan. By combining the construction funds with your home mortgage, an FHA 203(K) loan limits your loan closing costs because it’s just one loan that provides you the necessary funds to buy a home and make the desired repairs or improvements. But it’s not for those who want to move in tomorrow, experts said. The negotiations take time.
In addition, they explained, African American-based real estate associations, brokers, lenders and nonprofits can help people navigate around the obstacles to homeownership.
Wendell Harris of the nonprofit Chicago Community Loan Fund — an organization that provides financing and technical assistance to develop low- and moderate-income neighborhoods in Chicago — said that he is contacted daily by investors from as far as New York, Los Angeles, Atlanta and China about assistance.
“I refuse to fund these people because they don’t talk about using local folks to help solve problems,” he said. “Help me find local people.”