Erasing the legacy of redlining will take action by Congress, state legislature

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

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

The analysis by a team at Cook County Treasurer Maria Pappas’ office found that properties redlined by the federal government in the 1940s are more likely to be vacant and abandoned 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, typically African American communities. Without access to those home loans and other services, home owners saw properties in those neighborhoods lose value.

In Chicago, neighborhoods that had many well-kept homes and vibrant commercial areas withered away after redlining was imposed in the 1940s, and many have never recovered. Redlining also forced many African Americans to buy homes on contract, a system rife with abuses, including the loss of their homes and all of their equity if they missed a single payment.

Pappas’ analysis found a little more than half of the 27,000 properties now at risk of being sold for back taxes are within areas the federal government had redlined.

When owners fall far enough behind on property taxes, the properties can be sold at a tax sale to bidders who pay the taxes and get title to the property. But many properties aren’t snapped up at the tax sale and eventually go to the so-called scavenger sale.

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

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

Ripple effect of disinvestment

For years, officials, community groups and others have worked to find new owners for properties that languish at the scavenger sale. If they could be found, new owners would put the properties back on the tax rolls, generating revenue for local governmental units and presumably lead to investment by the new owners, revitalizing neighborhoods.

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

Also, as long ago as 1977, Congress enacted the Community Reinvestment Act, which required banks to lend to property owners in areas from which they accepted deposits. But it took efforts by Chicago reformers to get banks to do so.

Yet it’s clear 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 by one vacant property after another. Parts of the electric, water and gas grids may have fallen into disrepair without anyone realizing it because no buildings are using them. Frequent violence in those areas also discourages investment.

In 2020, an analysis by WBEZ and the nonprofit newsroom City Bureau found majority-white neighborhoods got 68.1% of the money loaned for housing purchases, while majority-Latino neighborhoods got 8.7% and majority-Black neighborhoods got 8.1%.

Pappas is urging 13 reforms that could help move some properties back onto the tax rolls. For example, she would like to make the scavenger sale, which has been around since 1943, optional. But that would have to be approved by the Illinois Legislature.

Her proposal to trim the time it takes for properties to move to the scavenger sale from 2 ½ years to one year would require amending the state Constitution.

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

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