The Crusader Newspaper Group

Pappas seeks to scrap broken tax scavenger sale

Cook County Treasurer Maria Pappas

Cook County Treasurer Maria Pappas wants to revamp the property tax delinquency system that has failed to restore vacant and abandoned properties to productive use.

Her plan is to start unwinding the harm caused to minority communities, particularly on the South and West sides, caused by redlining and other forms of housing discrimination like scant mortgage lending and below-value mortgage appraisals. She wants to change state law to eliminate the Scavenger Sale – a semi-annual auction designed to unload chronically tax delinquent properties for basement-bottom prices – that has proven inadequate in restoring distressed properties.

Pappas made her remarks a few weeks ago, on WVON’s “On The Case” talk show.

Scavenger sales are held every two years and include properties with three or more years of delinquent taxes.

“It’s not working,” she said, “It was designed to put vacant and abandoned properties back on the tax rolls and into the hands of productive owners who can put them into good use, but it’s cumbersome, complicated, and it’s not getting the job done.”

Pappas wants to replace the Scavenger Sale with a county trustee program.

“It’s used in suburban and downstate counties. Under the trustee program, vacant and abandoned properties would not wither and deteriorate as long because the redemption period would start two years earlier. But it would still give homeowners more than 3 ½ years to pay their tax debt,” she explained.

“If you can get a hundred thousand properties back on the property tax rolls, that means that everyone who pays taxes in that area will pay less in taxes. We need the General Assembly and the Cook County Board to get on board with the trustee program to replace the Scavenger Sale.”

Pappas said she plans to meet with Cook County Board President Toni Preckwinkle to join her in this fight for change. Some of these changes were listed in a recently released 43-page study entitled, “Maps of Inequality: From Redlining to Urban Decay and the Black Exodus,” which revealed how the federal government sanctioned housing discrimination as far back as the 1940s and blamed it for the urban decay that fueled the exodus of Blacks from Chicago and other urban cities.

At that time, Pappas told the Chicago Crusader, “Redlining, the loss of generational wealth, crime areas and population are all interrelated.” She said the study lays out potential solutions for abolishing the scavenger sale. It also calls for the reduction of the initial interest penalty on late tax payments from 18 percent per year to 9 percent a year.

But to be successful, Pappas said, “It will require a collaborative effort on the part of all elected officials to move the needle forward.”

As proof of government-sanctioned housing discrimination in Black areas, Pappas pointed out a number of vacant lots and abandoned homes, including boarded up businesses in minority communities, located in areas where the U.S. government had discouraged mortgages.

She pointed a finger to the government-sanctioned “redlining,” – the denial of home loans in minority areas – “because they were deemed a financial risk.” This practice, she said, “thwarted generations of Black people from obtaining housing wealth that their white fellow citizens had achieved.”

While the federal government-sanctioned housing bias began in the 1940s, Pappas said the study shows that the lingering effects continue today. As proof, her study shows how 400,000 Blacks over the past 40 years have left Chicago, or a reduction of about 34 percent.

The study was conducted as Pappas’ office began investigating the scavenger sale that was designed to “put distressed tax-delinquent properties back to productive use.”

Her study points out how North Lawndale’s population has declined from 124,937 people in 1960 to 34,794 in 2020 and its housing stock fell from more than 30,000 units in 1960 to about 15,000 today. According to the study, nearly one out of every five properties in the community is “chronically distressed.”

The study states that 72 percent of the scavenger sale properties are mostly in Black wards and the suburbs. Most of the remaining tax sales are in Latino or areas where Black and Latino residents are the majority.

There were 19,788 scavenger properties in predominantly Black city wards and suburbs. Those properties make up roughly 72 percent of all scavenger properties.

There were 2,319 scavenger properties in predominantly Latino areas. That’s roughly 8 percent of all scavenger properties.

The study shows how properties that were redlined in 1940 are 2.75 times more likely to be distressed today than non-redlined properties. Properties that were graded best in 1940 are 60 times less likely to be distressed today than all other Home Owners’ Loan Corporation (HOLC) graded properties.

Painting a dismal picture of past discrimination, the study stated, “It has been a painful, continual decline for North Lawndale since 1940, when HOLC first warned banks and others about sending money there because the area was dominated by working-class Jews and faced the likelihood of “Negro encroachment.”

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