The recession and accompanying housing crisis have impacted different parts of the nation in varying ways, with places like New York City looking downright hearty compared to foundering markets like Florida and California. The Chicago area real estate market is recouping losses at a pace somewhere between those two extremes but foreclosures in the Windy City are up, and both unit owners and lenders are feeling pinched. The situation has led political leaders and housing special interest groups to work on legislation to deal with the particular problems wrought by the crisis.
A slower economy has resulted in excess inventory of unsold condos in and around Chicago. Many residential developments in the area have gone into default, leading investors to snap up unsold units. Another offshoot of the economy’s impact on the housing market has been the number of condo units being rented out, which sometimes can begin to slowly change the character of a community.
Because of these changes, many condo buildings are considering restrictions to renting units, and some associations want to put a ceiling on the number of rentals allowed in the community. Consequently, the question of whether an association can or should limit the number of rental units in a building has become quite controversial.
The number of units owned by banks also is becoming problematic. To put the issue into perspective, in April of this year there were 40,000 foreclosures in Cook County. As a result, the upcoming state legislative session will likely see proposals for banks to pay assessments on properties in foreclosure, as well as proposals for requiring scheduling of foreclosure sales, which often can take more than a year to happen.
Equitable Rulings Sought
Foreclosures and the sometimes vacant buildings resulting from them have become eyesores for Chicagoans, prompting city officials to act to clean up the mess. With foreclosures on condominium properties often taking 16 months or more and foreclosing lenders not paying assessments during the period of foreclosure, other residents in multi-family buildings have had to pick up heavier tabs due to this loophole allowed to banks during foreclosure. But legislators at the state level are working to close the loophole.