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Ordinance Holds Banks Responsible For Maintaining Vacant Buildings

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Banks and other lenders would be forced to maintain vacant foreclosed buildings like these under a proposed ordinance backed by Mayor Rahm Emanuel. (Credit: CBS)

Banks and other lenders would be forced to maintain vacant foreclosed buildings like these under a proposed ordinance backed by Mayor Rahm Emanuel. (Credit: CBS)

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CHICAGO (CBS) — The City Council on Thursday passed an ordinance that holds banks responsible for maintaining properties once they have foreclosed upon them and left them vacant.

The ordinance sponsored by Ald. Pat Dowell (3rd) came in response to a growing problem with vacant buildings in the city. The Mayor’s Office says the city spent more than $15 million to deal with vacant buildings last year.

Through the course of last year, the Department of Buildings had to tear down or board up more than 500 buildings, which accounted for $13.7 million in expenses. The Department of Streets and Sanitation also had to perform upkeep on 1,963 vacant buildings and tear down 345 empty garages, at a cost of $1.8 million.

Under the ordinance, the bank will be responsible for such operations. The ordinance introduces a legal definition of a “mortgagee” – a bank or other entity that holds a mortgage on a property – as a property owner that is required to handle routine maintenance.

The banks will now be responsible for such actions as boarding up entrances, responding to complaints about a building, and keeping the lawn mowed and the snow shoveled.

“With this ordinance, Chicago is leading the way in protecting residents, neighborhoods, and communities from the devastating impact of foreclosures,” Mayor Rahm Emanuel said in a news release. “I am proud of this strong piece of legislation requiring banks to be good neighbors and maintain the foreclosed-upon properties.”

Dowell said earlier this month that foreclosed eyesores benefit no one – either lenders or those who live around them. Despite that, she said, she has had trouble getting any traction behind her proposed ordinance until now.

She first proposed the measure 18 months ago.

A map shows the largest concentrations of vacant buildings are in struggling communities – including the West Side neighborhoods of South Austin, East and West Garfield Park and North Lawndale; and the South Side neighborhoods of Englewood, West Englewood, South Shore and Roseland.

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