Initiatives For State Action on
Affordable Housing in 2011

Under Illinois law, when ownership of a rental property changes, any new owner becomes responsible for the tenants' security deposit – except when that new owner is the bank after foreclosure. However, after a foreclosure it is nearly impossible for many tenants to collect their deposit from a former landlord because he or she is long gone. As a result, tenants at foreclosure are losing their deposits.

HB 1574 eliminates the exception in the Security Deposit Return Act for lien holders and puts banks in the position of any other landlord by making them responsible for security deposits.

HB 1574 passed both houses and awaits the Governor’s signature.

1. Authorize local governments to enact vacant property ordinances and hold lenders -- like banks and trustees of mortgage-backed securities -- responsible for maintaining and securing such properties. Vacant and abandoned properties depress home values, weaken the tax base, breed crime, and drive up government costs as municipalities bear the burden of securing and maintaining them. If all parties with a legal interest in a property were required to care for the properties, everyone -- neighbors, municipalities and lenders -- would be better off.
2. Collect a $500 fee from the proceeds of foreclosure sales, to be used to pay for programs to help homeowners at risk of foreclosure. As the number of DuPage foreclosures continues to grow, homeowners suffer and the courts are overburdened. Foreclosure prevention activities, including housing counseling and court-based mediation, can assist homeowners, preserve neighborhoods, and make more efficient use of precious court resources.
3. Strengthen "fast track" foreclosure legislation for abandoned properties. This legislation would clear up standards that would permit "fast track" foreclosures and speed up the turnaround for abandoned properties, benefiting communities and lenders.

HB 1109 and HB 1810 did not pass.

Restore funding for the state Homeless Prevention Program. This program prevents households experiencing a temporary financial crisis from becoming homeless by providing emergency rent, utility or mortgage assistance.

As the budget currently stands, funding for Emergency and Transitional Housing will be cut by 52% to $4.4 million and Homeless Prevention will be cut 38% to $1.5 million.

Before adjourning the Senate, President Cullerton said the budget passed was “incomplete,” and the Senate may be called back into session prior to the October veto session.

As portions of the $130 million committed for affordable housing development in the state capital budget become available, we will advocate that as much funding as possible is used to create units for extremely low-income households, including people who have experienced homelessness and people with disabilities.

The Capital Budget may be addressed during a special session prior to the October veto session.