Show Navigation

Maintaining Vacant Properties


BPI has worked at the state and local level to help address the enormous challenges associated with foreclosure and vacant properties.

State Legislation

In 2012, the Illinois legislature passed a powerful new foreclosure law that works in a variety of ways to help local governments maintain and secure vacant properties. BPI was primarily responsible for drafting the law and led the charge to pass it.

The law, which BPI developed in collaboration with a broad coalition of community groups, local governments, and banks, requires banks to pay a new foreclosure filing fee. Banks that file large numbers of foreclosures pay a higher fee, and banks that file many fewer foreclosures pay a much lower fee. It’s estimated that the new law will generate approximately $25-30 million per year. Most will go to local governments to maintain and restore abandoned properties. Some will fund housing counseling that will allow thousands of families facing foreclosure to get help. Thus, the new fee will result in fewer and better-maintained vacant properties. Banks will be more likely to lend, and families more likely to buy on blocks with well-maintained homes, rather than ones with a host of unsecured buildings that are havens for drug dealers, scavengers and squatters. Where homes are clean and safe, properties will hold or increase their value, and fewer homeowners will fall into foreclosure.

The law also creates a “fast track” foreclosure path, which will reduce the length of the foreclosure process for abandoned properties from more than two years to about 90 days. If a property is clearly abandoned, a lengthy foreclosure process helps no one and hurts neighbors, local governments, and banks. The fast-track path makes it possible for lenders to maintain and secure these properties more quickly, which helps neighbors, neighborhoods, and local governments alike. Importantly, too, there will be a substantial cost savings for banks, which will get title to properties that have suffered much less damage and deterioration and thus can be sold for more. In addition, banks will save almost two years of other costs such as property taxes, insurance, and loan servicing fees. This new Illinois law has garnered national attention and has been described as the best of its type in the country.

Local Ordinances

BPI has helped municipalities throughout the region to establish local laws that work to ensure that vacant properties are well-maintained and secured. These programs serve various purposes, most notably bringing greater stability to neighborhoods ravaged by foreclosure and abandonment.

For example, in 2011, BPI led a successful effort to pass a groundbreaking vacant property ordinance in Chicago. The ordinance extends the City’s Vacant Property Code to require that banks and mortgage servicers secure and maintain properties in which they have a legal interest. Previously, the City’s Vacant Property Ordinance applied only to owners of vacant property. It did not cover any of the thousands of properties where the owners have left and aren’t coming back, and where a bank had either not begun or not finished foreclosure. These properties could spend years in legal limbo, deteriorating. During that time, City taxpayers pay to maintain or demolish these properties, or they don’t get cleaned up and secured, and become nightmares for neighbors.

Under the amended ordinance, those with the biggest legal and financial interest in a vacant property, such as mortgage lenders and servicers, are now required to maintain and secure them. The ordinance could save millions of dollars a year in government expenditures, make neighborhoods cleaner and safer, and bring more stability to property values and the tax base.

Recipient of the MacArthur Award for Creative and Effective Institutions

Linkedin Twitter Facebook Youtube