Mayor Lori Lightfoot said Wednesday she’s “very worried about a new wave of mortgage foreclosures” stemming from the economic pain caused by the coronavirus and the next federal stimulus program must prevent it.
The last wave of mortgage foreclosures hit Chicago in 2008. It was yet another blow to South and West Side neighborhoods already suffering from decades of disinvestment and struggling to control gang violence.
This time, the culprit could be the statewide stay-at-home order forcing all but the most essential businesses to close their doors and lay off workers.
“The affordability of housing, paying rent, making mortgages … I’m very worried about a new wave of mortgage foreclosures that might be at our doorstep as a result of this issue,” the mayor said.
More than 86,000 people applied for 2,000 city rental assistance grants, quickly gobbling up the $2 million Lightfoot had set aside.
That prompted black community leaders, led by Ald. Jeanette Taylor (20th) to demand that the mayor “do right by the homeless” by opening up 2,000 vacant units the Chicago Housing Authority has been “sitting on.”
Taylor has dismissed said the mayor’s plan to open up hotels and YMCA’s as “putting a Band-Aid on a bullet wound.”
Housing assistance is not the only item on the mayor’s wish-list for a follow-up to the Coronavirus Aid, Relief and Economic Security Act (CARES).
“We’re very focused on making sure that municipalities ... get reimbursed for their COVID-related expenditures ... looking at the impact that this pandemic has had on revenue streams in places like Chicago of course, but really all across our state,” the mayor said.
“I’m hearing that from mayors in our region with whom I’m in regular conversation. This is a scary time for them because a lot of economically sensitive revenues are really being impacted. And depending on what your mix is of revenue streams, this could be a very dire circumstance. ... That’s something that has to be taken into consideration.”
Last week, top mayoral aides said Chicago expects to receive at least $572 million from the federal stimulus plan, but the massive infusion won’t cover declining revenues and rising costs tied to the coronavirus — in part, because the city has already spent $100 million.
In addition to the city money, the CTA is expected to receive $800 million to cover operating costs during the pandemic; ridership has plunged by at least 80 percent on rail and 70 percent on buses.
The Chicago Public Schools will receive $205 million from the $2 trillion federal stimulus bill.
The mayor acknowledged Wednesday her wish list for the next round of federal stimulus money is long.
It includes the extraordinary needs of small businesses forced to close during the statewide stay-at-home order. “What I know small businesses want is more grants than loans. … infusing a lot more cash into the hands of small businesses so they can survive this and come out on the other side is gonna be critically important,” the mayor said.
Early on, Lightfoot created a $100 million small business resiliency fund. She argued Wednesday that city help is particularly important, considering the many small businesses owned by undocumented immigrants who “won’t get access to federal resources.” It’s also important to cash businesses without “an ongoing banking relationship,” she said.
Last week, Lightfoot vowed to be “straightforward and very transparent” with Chicagoans if and when she concludes tax increases are needed to cover declining revenues and rising costs tied to the coronavirus.
She cracked the door open to the mid-year corrections which most aldermen and municipal finance experts have been expecting after once again ruling out layoffs, furloughs and program cuts in this extraordinary time of need.
“What we need to be doing at this time is not shrinking government. ... We need to be using government resources as a stimulus, if anything. That’s why we’ve seen the stimulus bills at the federal level. The same applies here at the local level,” the mayor said then.
“The worst thing we can do when we’re going through this kind of struggle is slash city services, slash city workforce and put people on the street.”