Quigley, Schakowsky, Gutiérrez Send Letter to Director Mel Watt about Affordable Housing in Chicago

CHICAGO – Today, Representatives Mike Quigley (IL-05), Luis Gutiérrez (IL-04) and Jan Schakowsky (IL-09) sent Federal Housing Finance Agency (FHFA) Director Mel Watt a letter asking that Fannie Mae and Freddie Mac not sell foreclosed properties in specific Chicago neighborhoods until a meeting is held to ensure continued access to affordable housing in those neighborhoods. The Representatives issued the following statement regarding their request:

“As Chicago-area families continue to recover from the foreclosure crisis, it is crucial that we make sure our residents have every opportunity to secure quality affordable housing. The FHFA’s Neighborhood Stabilization Initiative (NSI) can be of great benefit to our communities, but we first must make sure residents of our cities are not displaced due to the unintended consequences of NSI.”

“Studies show that affordable, safe and stable housing is important to the overall well-being and health of families,” said Rep. Quigley. “As my constituents continue to recover from the foreclosure crisis, it is my duty to ensure that FHFA Director Mel Watt takes every step to ensure that low-income individuals and families have access to affordable housing in their current neighborhoods. I will continue to work with my colleagues to make sure residents of our cities avoid unintended consequences or displacement due to NSI.”

“Our communities are stronger if long term residents can stay in their homes and neighborhoods can thrive,” said Rep. Gutiérrez. “The need for affordable housing continues to be an important issue for Chicago residents and we have an opportunity to work together to ensure that we are meeting that need as our housing market recovers.” 

“I am always hearing from residents in my community about the need for affordable housing. I believe we must do everything we can to ensure that low-income people aren’t forced from their homes and neighborhoods – in many cases the only neighborhoods they’ve ever known,” said Rep. Schakowsky. “We must ensure that as Fannie and Freddie work to sell foreclosed properties, policies are in place to maintain the supply of affordable housing in our communities. Director Watt has always been a champion of affordable housing, and we have asked to meet with him regarding how the NSI can help promote affordable housing.” 

Text of today’s letter is below.

Mel Watt
Director
Federal Housing Finance Agency
Constitution Center
400 7th Street, SW
Washington, D.C. 20024

November 14, 2014

Dear Director Watt:

We are writing in regards to the Federal Housing Finance Agency’s (FHFA) Neighborhood Stabilization Initiative (NSI), which we understand will soon be implemented in Chicago. The after-effects of the foreclosure crisis continue to have a negative impact on all regions of the city, ranging from distressed areas hit hardest by the foreclosure crisis to changing areas experiencing rapid rates of gentrification. In order for the NSI to truly help stabilize the city of Chicago, strategies need to be developed for both weak and strong markets, and should take into account local, common sense policies that keep families in their homes. 

In opportunity areas like Albany Park, North Park, Irving Park and West Ridge, the foreclosure crisis has decimated the affordable housing stock, as cash investors flip foreclosed properties into luxury rentals or pricey single family homes. This means many low-income residents who have lived for a long time in these traditionally socioeconomic and cultural diverse communities are at risk of being displaced from their homes, schools and communities. FHFA has a chance to make a significant impact in these areas, especially considering that Albany Park Neighborhood Council (APNC) leaders found that Fannie Mae and Freddie Mac (the GSEs) owned nearly 44% of foreclosed properties in the Albany Park area from 2012-2013. 

To help mitigate the negative effects of the foreclosure crisis, the city of Chicago passed the Keep Chicago Renting Ordinance, which provides incentives for owners of foreclosed properties to keep rental units occupied post-foreclosure. APNC has been in communication with the NSI implementation team to advocate for a pilot project with 20 Fannie Mae and Freddie Mac owned properties that have already been identified by APNC. This project would keep renting families in their homes when a third party buys the property and preserve affordability in these Fannie Mae and Freddie Mac owned 2-4 unit properties located in stronger markets. APNC has secured the financing to make the project successful, enlisted the services of a mission-minded developer who will preserve the properties as affordable, and gained the support of local Aldermen and City of Chicago leaders. What is needed is for Fannie Mae and Freddie Mac is to sell these properties to this developer at a price that will ensure that the properties remain affordable.

The foreclosure crisis provides us with a unique opportunity to make an immediate and positive impact on Chicago’s neighborhoods. Under your leadership, we are hoping that post-foreclosure strategies for both strong and weak markets in Chicago can be developed, including in changing markets like Albany Park, North Park, Irving Park and West Ridge. APNC’s pilot project provides a clear opportunity to help stabilize a changing community and preserve its affordable housing stock, which is what NSI is supposed to be about. 

We would like to set up a meeting with you, APNC’s team and your NSI team to discuss these important issues. Additionally, considering some of these properties are already listed for sale and at risk of being sold to investors, we ask that you issue a moratorium on selling Fannie Mae and Freddie Mac properties in the 60618, 60625, 60630, 60645 and 60659 zip codes until we discuss the parameters of APNC’s pilot project.

Sincerely,

U.S. Representative Luis Gutiérrez (IL-04)
U.S. Representative Mike Quigley (IL-05)
U.S. Representative Jan Schakowsky (IL-09)

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