Chicago aldermen advance new members for Northwest Side home equity board

Chicago aldermen on Monday advanced a group of appointees to a Northwest Side taxpayer-funded commission that guarantees home sale prices for members in several bungalow belt neighborhoods, a program that was created decades ago to try to stem white flight.

Some aldermen questioned the policies of the Northwest Home Equity Assurance Program, which has collected more than $10 million in small property tax payments from all homeowners within its boundaries since the late 1980s, but has handed out just a few payments in that time to residents whose houses didn’t sell for a set minimum price.

“People pay into this program via their tax bill, and it has $9.5 million, $10 million sitting in an account,” said Northwest Side Ald. Gilbert Villegas, 36th, who has for years criticized the agency for not doing more with its reserves. “And it has staff. And what we need to do is to make sure it’s actually working for the people.”

VIllegas said the Northwest Home Equity Assurance Program is doing a much better job than it was a few years ago, and voted in favor of the appointment of two new members and reappointment of two others to its board in Monday’s Finance Committee meeting.

But he also called for hearings on how the agency is run, and for officials to look at ways to possibly distribute the taxpayer money it has been building up for years in the form of home equity loans to members.

And Ald. Chris Taliaferro, 29th, said appointments to the board should be made only after residents and the local aldermen whose wards include the home equity district are notified about vacancies.

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Created via referendum in 1988 in a controversial bid to stabilize the housing market in a big swath of the Northwest Side, the home equity program covers about 48,000 homes in parts of the Jefferson Park, Old Irving Park, Dunning, Montclare, Galewood, Portage Park, Belmont Central, Belmont Heights and Belmont Cragin neighborhoods. Two similar programs were started around the same time on the Southwest Side.

The idea was that members who joined and got a property appraisal and then lived in the homes for five years or longer could be assured they would at least get the appraised value of their houses when they sold them because the program would cut checks for shortfalls. African American city officials tried to stop the creation of the districts, saying they were an attempt to prevent integration in Chicago’s predominantly white outer edges.

Then-Northwest Side Ald. William J.P. Banks ushered an ordinance creating them through the City Council in 1988, but then-Mayor Eugene Sawyer vetoed it.

Illinois House Speaker Michael Madigan then helped get the programs approved in the legislature, bypassing City Hall. Richard M. Daley was elected mayor in 1989, and he supported the creation of the Southwest Side and Northwest Side home equity districts after voters in those neighborhoods overwhelmingly had backed them in ballot referendums.

In the decades since, the Northwest Side home equity fund has continued to collect money via the additional tax levied on all homeowners in the boundaries. The program’s reserves now total $9.57 million in two accounts, according to agency records.

Initially, the program levied $1 million per year. But as reserves rose, commissioners cut it to $125,000 annually. Most homeowners now pay between $1.50 and $3 a year.

The full City Council will consider the appointments Wednesday.

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