Cook County Treasurer Maria Pappas has released the findings of a landmark study that show that the practice of “redlining,” which was used to deny loans to minority homebuyers during and after the Great Depression, is still having negative consequences for numerous portions of the county.
Pappas took the step of commissioning a study to find out why the decades-old practice of “scavenger sales” weren’t helping to reverse urban decay, and weren’t helping to get properties back on the tax rolls.
“It was supposed to be a way of getting rid of, and selling, these properties and getting them back on the tax rolls,” she said. “Well, 80 years later, it’s not working.”
A “scavenger sale” is an auction that allows people to buy properties that have at least three years of unpaid taxes attached to them.
Pappas says that her study found that the sales practice bears a striking resemblance to the practice of “redlining,” a tactic used by the government in the 1940’s to deny loans to homebuyers in minority areas by deeming them a “financial risk.”
Areas of the map would literally be shaded red to dissuade lenders from giving out loans, and Pappas’ study found that the scavenger property map, which includes abandoned and vacant properties, matches up with red-lined maps from that time period.
“Because the government had sanctioned this race-based judgment of whether someone should get the mortgage or not, those practices became endemic in the financial community, and they came built into peoples’ way of thinking,” Hal Dardick, who helped conduct the study, said.
In a statement, Pappas said that the problem of abandoned properties and buildings is a “blister that has been festering for 80 years,” and says that her office is preparing to tackle the problem head-on.
Lizette Carretero, who works with The Resurrection Project, has made it her life’s work to help minority families navigate the home-buying process, and to maintain that home.
She says that the study’s findings are not surprising, and stresses that educating her community is the key to keeping struggling neighborhoods alive.
“There are a lot of homeowners that should have been able to own these homes, and to build the equity,” she said. “But these are also the families that we’re seeing targeted from investors.”
Pappas says that her office is committed to addressing inequities within the system.
“I think we’re at the solution stage,” she said. “That’s not quite what the government always does, but that’s what this office is doing, and we’re studying all the inequities in the property tax system.”