Plan to Aid Foreclosed Homeowners

Plan to Aid Foreclosed Homeowners CHICAGO, IL - A handful of legislators in the Illinois General Assembly are looking to include money for affordable housing in the upcoming capital infrastructure plan. If successful, they could relieve the pressure on some former homeowners who've fallen victim to the foreclosure crisis. State Rep. Harry Osterman (D-Chicago) said the housing crisis has made the creation of affordable housing a key item on his agenda.

Osterman explained: "Illinoisans deserve an affordable place to live, and they shouldn't be on the street, they shouldn't be in the park, they shouldn't be forced to live in squalor. Every legislator, no matter where you are in the state is hearing from their constituents about the challenges that they're facing as far as the economy goes, and housing is a significant part of that."

According to recent figures from the National Low Income Housing Coalition, Illinois had a shortage of nearly 250,000 affordable units in 2007. Danilo Pelletiere, the research director at the NLIHC, said the recession has only amplified the affordable housing shortages in Illinois, drawing foreclosed homeowners into the mix.

On top of problems caused by sub-prime loans, job losses in this recession are causing significant stumbling blocks, Pelletiere said. "People are going down the income ladder and they are losing the home that they're in," Pelletiere said. "Then what you have is a situation where a lot more people are becoming low-income renters, and you already had an extreme shortage of rental units before. So the pressure on the lower end of the market is just extreme."

This added pressure on the low-income housing market will make it easier for the General Assembly to include funding for affordable housing in the proposed capital plan, Osterman said, a feat never accomplished in Illinois.

State Sen. Heather Steans (D-Chicago) said the impact of the recession will push the capital plan along toward successfully becoming law.

"In a capital plan, one of our goals, in addition to taking care of real infrastructure needs, is job creation," Steans said. Steans also emphasized the impact new affordable housing units could have on job creation, adding, "Affordable housing creates certainly as many jobs, dollar for dollar, if not more, than work on roads."

However, the fate of the capital infrastructure plan is uncertain.

Osterman warned, "Given that we are in a significant financial crisis with our regular state budget, as we look at a capital plan we are kind of sensitive about how do we deal with our existing state budget hole that we have."

State Rep. Greg Harris (D-Chicago) agreed with Osterman, saying the source of funding will be critical to the greater success of the plan. Harris said, "This is one of those issues where my sense is either we will debate it and debate it and debate it, or it will come together so fast people's heads will spin." He added, "If someone comes up with a really great plan (for funding), I think it could move in a matter of weeks, but if we end up debating every detail, it could take months."
Source: Northwestern University

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