The City Council Buildings Committee today unanimously passed an ordinance that would make banks hire security guards at buildings seized during foreclosure proceedings.
The vote came after veteran Aldermen Richard Mell and Bernard Stone ripped the banks who take over the city’s increasing number of foreclosed buildings.
“Banks are not reporting all their vacant buildings,” said Stone. “Gangs are taking over the buildings and they’re shooting up the buildings – banks are part of the problem.”
The ordinance would require any corporation or institution with an interest in a vacant, abandoned building to make sure there’s a guard at the property between 4 p.m. and 8 a.m.
And in any building within 2,000 feet of a school, a guard must be available 24 hours a day.
Banks who don’t employ a watchman would face cash fines after the first two offenses and a misdemeanor violation after the third.
In a wide-ranging speech on the City Council floor, Mell compared the blight of neighborhoods wracked with vacant buildings – and a continually increasing city foreclosure rate -- with the Gulf Coast after the BP Oil Spill.
He also pointed blame at credit ratings agencies and big banks like Goldman Sachs for “this foreclosure phenomenon” that has lead to “324 abandoned or foreclosed properties” in his Northwest Ward.
Several witnesses joined Stone, the building committee chairman, and Mell complaining about the problem of abandoned buildings. The witnesses largely echoed Mell’s complaint that foreclosed buildings are providing a haven for drug dealing and other gang activity.
I've got calls in to the Chicago Association of Realtors and Illinois Bankers Association, and will update if I receive interesting comments from them.
UPDATE, 3:53 p.m.: The Chicago Association of Realtors says it's neutral on the legislation.
The association understands concerns about unsecured properties, says Brian Bernadorni, senior director of government and public policy.
But it also notes that the foreclosure crisis has forced banks to become large-scale property managers -- a role they've never played before.